The Price Reduction Conversation Starts at the Listing Appointment

Have you ever taken a listing you knew was overpriced from day one? Most of us have. We take it hoping the market will prove the seller right, or at least that the seller will come around on their own.

Mike Pillow from our team asked that question when he led one of our recent weekly training sessions. He covers central Ohio, from Apple Valley Lake and Knox County down into Columbus. His point was that the price conversation isn't hard because it's uncomfortable. It's hard because we wait too long to have it.

Scott, an agent from San Antonio with 52 years in the business, joined the session and added some of the best practical advice I've heard on this topic. Here's what our team took from it.

The problem is timing, not the conversation

Every week an overpriced listing sits, the seller gets more frustrated. By the time you finally recommend a reduction, it lands as bad news, or worse, as a sign you've given up.

Mike Pillow put it this way: most homes don't fail to sell because they're overpriced. They fail because the price conversation happens six weeks too late.

Set it up on day one

The fix starts at the listing appointment. Before the sign goes in the yard, tell the seller something like this: "If the market tells us we missed the mark, or our strategy isn't working, we're going to adjust quickly."

When the conversation comes later, it's not a surprise. You're not delivering bad news. You're following the plan you both agreed to at the start.

Ask questions instead of making statements

"We need to lower the price" is a statement, and statements create resistance. What the seller hears is "your house isn't worth what you thought," or "my agent has thrown in the towel."

Questions create conversations. Mike Pillow suggests starting with questions like these:

• What feedback have you noticed from the showings so far?
• What concerns have we heard from the buyers who came through?
• What have the showing numbers been telling us?
• What do you think the market is trying to tell us?

Remember that selling a home is emotional. When the seller reaches the conclusion with you, they own it.

Bring data, not opinions

Come to the conversation prepared. Recent comparable sales, the current competition, days on market, showing activity, online views, and buyer feedback. As Mike Pillow said, facts reduce emotion and data creates clarity.

He shared a listing of his own from earlier this year. Plenty of online views, a few showings, no offers. They kept thinking the next buyer would be the one. Eventually he sat down with the seller, they went through all the data together, and they adjusted the price. Interest picked up again within a short time. His takeaway was that the market had been speaking the whole time, they just weren't listening.

Take yourself out of it

Never make it personal. Don't say "I think your home is overpriced." Say "the market is giving us new information." It's not about being right or wrong. It's about responding to what's changed.

Scott's version is even better. He frames it as the opinion of "the people out there with the checkbooks." It's not your opinion against the seller's. It's what buyers are doing with their own money.

Mike Pillow used a fishing analogy I've started borrowing. If you've fished all morning without a bite, you don't spend the afternoon arguing with the fish. You change your bait or move to a different spot. If buyers aren't biting, the market is telling you to do something different.

Anchor to their motivation, not the number

Scott's biggest point was to keep the seller focused on why they're moving. Sellers get tunnel vision on the price and forget the goal.

His example: "I know you need to be in Omaha for your new job by October 15th. Homes in this neighborhood are averaging about 94 days to sell. Yours has been on the market a month with one showing. It's important that you're in Omaha by the 15th, right?" That question does more than any comp sheet.

The same principle works with buyers. Mike Pillow had a buyer recently looking at an older farmhouse in exactly the right location, close to the family farm where he works. The buyer started fixating on some repairs. Mike Pillow reminded him the house checked every box and the repairs were simple. The buyer said, "You're right. Let's write an offer."

Call the unhappy sellers more, not less

Scott said something that every agent should admit is true. We love calling the happy sellers. The ones with no showings are the ones we avoid, because we expect to get chewed out or asked for an open house every Sunday. Those are exactly the sellers who need to hear from us most.

Mike Pillow talks with his sellers at least once a week, and several times a week when a home isn't moving. His rule: if your seller is calling you to ask what we're going to do, you're already too late.

A weekly report of online activity helps a lot here. When a seller can see that 1,500 people looked at the listing in two weeks and nobody booked a showing, you can simply ask, "What is that telling you?"

Price, time, and terms

Scott shared a rule from Floyd Wickman's training years ago. A sellable listing needs two out of three: the right price, enough time, or attractive terms.

If a seller won't budge on price, terms can sometimes carry the listing. Scott's office was bringing in an attorney to teach wraparound mortgages and other forms of owner financing for exactly that reason. Creative financing can offset some overpricing, but it has real legal and lending rules attached. Bring in an attorney and don't improvise it.

Know when to walk away

Floyd Wickman also taught that no listing is better than one that won't sell. An overpriced listing costs you time and money, and you'll take the blame for the marketing, the communication, and the lack of open houses. It's never the price.

Scott turned down a listing last year when the seller wouldn't consider the range his research supported. A year and a half and three agents later, that home still hasn't sold, and the price still hasn't reached the top of Scott's original range. Meanwhile, when overpriced listings expire, the next agent usually prices them at almost exactly what the first agent recommended.

The real job

Our value isn't opening doors or putting a sign in the yard. It's helping clients make good decisions when the conversation is hard. The price reduction conversation isn't really about lowering the price. It's about helping the seller reach the goal they hired us for, which is getting the home sold.

Mike Pillow closed with a question worth asking yourself about every listing you have right now. If you knew today that your seller's price was keeping them from their goal, would you have the courage to tell them now? Or would you wait until the market forces the conversation later?

Want to hear the full conversation? Watch the full training session with Mike Pillow and Scott.

Mike Ferrante
The Mike Team at LPT Realty
www.21mike.com
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