When discussing price reductions with sellers, you should refer to them as “price adjustments.” This language is a psychological factor that takes the negative connotation surrounding “reduction” and turns it into a simple change by using “adjustment.”
The best time to handle a price adjustment conversation is during the listing appointment, which is long before the change is actually necessary. During the appointment, you should set the expectation that a price adjustment could happen based on the current market.
Most sellers will be okay with the adjustment as long as you have market feedback showing that it is necessary and you have placed it within the range of possibility before it happens. Setting this expectation that an adjustment could happen will ensure that the seller is never surprised with it.
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The 3P's Script for Setting Expectations for HOW You Will Sell Their Home
There is a 1-2 Combo for handling price adjustments–one script and one tool.
Our 3 Ps script will set you apart from other real estate professionals based on what you are going to do, how you are going to do it, and what you are going to accomplish.
Check out the script below:
“There's the old way of selling real estate, and there's the new way of selling real estate. In the old way of selling real estate, we used the old three Ps. You might be familiar with them, or maybe this is something that you suspect many real estate professionals used to do.
The old 3 Ps are: Put a sign in the yard, Put the listing in the MLS, and Pray that it sells. Unfortunately, there's a lot of folks who still use those old 3 Ps. In fact, in recent market conditions people could get away with it, but that's not how we do things at our firm.
You see, at our firm, we use the new 3 Ps of selling real estate, which are: Preparation of the home and getting it in the right condition, Pricing strategy for the home based on the home's condition, and Promotion of the home to increase the demand and attract buyers.
Again, a lot of people are still doing business and selling real estate the old way, but this is how we do things.”
Use a Property Marketing Plan to Show EXACTLY How You Promote Their Listings
The promotion of the home introduces the segue into the second part of this 1-2 combo, which is the tool: a property marketing plan.
A property marketing plan is simply a marketing plan to sell a home. It is the “laundry list” of everything that you are going to do to generate interest and ultimately market, list, and sell the property. It is essential to have and is a great way to communicate your value and position you differently from other agents.
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In addition to helping with the price adjustment conversation, the property marketing plan also helps with any negotiation of your fees through educating the seller on everything that we're going to do to serve them and get them the results that they want.
If you use the 3 Ps and carefully implement your property marketing plan to generate demand, market feedback will indicate whether you've chosen the right pricing strategy or not. This feedback could show up as very little interest in the home, no showings, or no offers.
You can explain to the seller that if the market gives us this feedback, we might have to consider making a pricing adjustment to attract more people. Utilization of the property marketing plan helps rationalize the change in price.
If you do not address the possibility of a pricing adjustment during the listing appointment, you can still use the property marketing plan to justify the need for a change in price. Show the seller that you have fulfilled your marketing plan, but are still getting feedback suggesting that the marketing isn’t willing to bear the current price, indicating the need for a price adjustment.
Educating the seller through the 3Ps script and property marketing plan will help them understand the right choice to get the result they want.
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