Blog

August 15, 2016

How to talk your vendor down on price

Our home is our castle, as the saying goes, and, while this notion is a warm one, it can at times prove problematic when it comes to establishing a realistic listing price with a vendor.

And once a price is locked in, it can be even more difficult to convince a proud homeowner to drop the price of their most prized possession.

According to Real Estate Exclusive founder Nick Khachatryan, vendors often use their emotional attachment as the foundation for valuing their property unusually high compared with the rest of the market.

“It is often so that vendors’ emotional connection with the property blinds them from seeing that their property cannot be matched to the property next door that sold [for] a  much higher amount.”

So, when it comes to having the talk about price, it’s important agents tread carefully so as not to lose the client completely. But there are some strategies to help get the ball rolling.  

Comparisons

“It’s not a matter of convincing the vendor, it’s a matter of education, and educating the vendor begins at appraisal time,” real estate agent Wendi Turner says.   

Ms Turner says it’s crucial for agents to have their listing kit ready, containing everything about the expected market value of their home.

“The agent should also have the statistics [on] how many sales there have been in the past 12 months, the average time on market and percentage growth since the property was last sold.”

Vendor Feedback

Providing vendor feedback is an effective way of bringing up the prospect of a lower sales price.

“The agent [should ensure] they give the vendor accurate, regular, timely feedback from buyers following each inspection,” Ms Turner says.

Ask potential buyers what they would pay for the property and gather enough of these expectations to form an average price point.

“This evidence of buyer feedback is a great tool to move forward with the vendor to discuss why they may need to reassess the marketing price of the property.”

Point out the problems

Discussing vendor feedback can be a great lead into pointing out some of the areas where the property may need renovation.

“Assess the relevance of the property and if it’s close to roads, shops, schools, major freeways, beautiful or obstructed views, etc,” Mr Khachatryan says.

“Be sure to point out energy efficiency elements in vendors’ homes and in comparative properties, such as solar panels, energy efficient toilets and taps, kitchen appliances, heating and cooling appliances, solar assist hot water and much more.”

Be realistic from the get-go

Sometimes, agents can be tempted to talk up the potential sale price of a property, playing on the vendor’s emotional attachment to their home to snare the listing.

Similarly, vendors often chooses their agent from a likeability factor rather than looking at the agents’ experience and evidence of the agents’ proven track record in the area.

Either way, the vendor ends up on the market with an unrealistic sales price, and the agent has the task of bringing it down again.  

Alternative sales techniques

If the vendor is dead against reducing the price, suggest an alternative method of selling, such as an auction or a “make an offer” listing, where there is no actual list price.

That way, it’s up to the buyers to lead the way.

Get offers on paper

Sometimes the prospect of an actual offer is simply too good to refuse, so always get offers on paper, no matter how far below the list price they may be.

Time

“If, despite your relentless efforts, the vendor refuses to reduce the property price to more realistic number, don’t be disheartened because the property will eventually be subjected to price correction when the property has been on the market and has not generated any interest,” Mr Khachatryan says.

“At this stage you, as an agent, should have another conversation with the vendor about a price reduction. It is likely that, by this stage, your vendor will reconsider the price.”

Source (domaingroup) http://www.domain.com.au/group/agent-news/how-to-talk-your-vendor-down-on-price/?utm_source=facebook&utm_medium=cpc&utm_content=link-newsfeed&utm_campaign=t-all-autopromo