Unrealistic Seller Pricing: How to Handle it Like a Pro

As a real estate agent, you do a lot of preparation before meeting with a homeowner to discuss their listing. Researching the area and past sales, running reports, and compiling an accurate comparative market analysis (CMA) all take time and effort, but you understand that it's important to give your clients the most accurate listing price. After all this work on your part, there's nothing more frustrating than having the seller insist on overpricing the home.

Before you can convince a seller to agree to a realistic selling price, it's important to understand why they insist on overpricing their home in the first place. Remember, to your clients, the process of selling their home is a huge financial and emotional decision. Start your relationship with them by establishing trust, setting good boundaries, understanding their fears, and showing them the reality of the market. Here are four tips to help you work through tricky situations when sellers are convinced your price is too low.

1. Look at it from their point of view

Selling a house is easy. Selling a home is hard. A home is where memories are made – children take their first steps, anniversary parties are celebrated, family pets are welcomed, and irreplaceable items are kept. Sellers who overprice their homes are usually including the emotional value of the property, not remembering physical value. When you understand this, you can begin to separate the emotional ties from the physical value and help your clients do the same.

Start the conversation by asking them what they think their home is worth before you share your valuation of it. Don't react to their response, but do ask them how they arrived at this price. Be curious, not defensive, about their process. It's always better to ask them to explain their process than to counter it with reasons why it's not realistic or appropriate. Once they've shared their price, they'll want to know what you think the house is worth. This is the time to show them your process — when they're asking for your numbers. Garry Wise notes, "Never tell a seller, 'This is what your home is worth.'"  Instead, say, "The Market is willing to accept $210,000 for your home given all of this data." Share a customized CMA report that shows how you've factored the value of their home. The key is to show the seller that you have all the data, and this is how you're arriving at the suggested price.