How to Talk to Your Sellers About Price Reductions

Does your seller have an over-inflated opinion of their home's value? Many do. While you can head off the problem of bloated listing price early on with a detailed CMA and firm advice, eventually every agent will find themselves in the position of having to initiate a tough conversation with their clients--that of reducing the listing price.

It's not an easy topic to broach. Sellers have an emotional investment in their home that doesn't always allow them to look at pricing in a rational way. Luckily, there are ways you can approach the reduction discussion that appeals to both their feeling and thinking sides. Here are a few suggestions:

Use different terminology: Call it a "price adjustment" rather than a "price reduction." By using a different term, you frame your objective in a new way and change your seller's focus. The word "reduction" brings to mind the idea of loss (of money, in this case). "Adjustment," on the other hand, suggests that you are using your expertise to fine-tune the price so the listing doesn't languish on the market.

Remind them of their holding costs: The faster you are able to sell their home, the more your clients save on expenses like mortgage payments, insurance, utilities, taxes, and more. Crunch some numbers--a quicker sale at a lower price may actually end up saving your clients money.

Present numbers: No showings in 10 days? No offers in the last month? Let your seller know that statistics like these are an indicator that the asking price is too high. Also, make them aware of the realities of the local market by showing them the prices that comparable properties have recently sold for. If your seller's price diverges too far, let them know they'll have a hard time competing.