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Ever heard the saying “It’s not what you say, but how you say it”?
In today’s changing real estate market, that phrase rings true more than ever.
According to the National Association of REALTORS®, existing home sales sagged for the sixth straight month in July, and all four major U.S. regions recorded month-over-month and year-over-year sales declines.
What does all of this mean for sellers? A stiff reality check. In other words, it’s time to have “that” conversation. The one that many agents dread about realistic pricing. But, it doesn’t have to be a difficult one.
Long-time agent and coach Aaron Novello of The Novello Group in Fort Lauderdale, FL says it’s all about altering your approach and fine-tuning your skill sets as an agent. He points out that what’s key is having a strong knowledge of current market conditions and an understanding with your sellers that as their agent, you are here to help them avoid making a poor decision. But the ultimate decision in pricing their home is up to them. Being able to communicate these things successfully is a skill, Novello says.
“So if we’re honest with ourselves, really honest, over the last two years, how skilled have you had to be as a real estate agent? Did you have to be skilled at pre-qualifying? No. Anybody could be unreasonable, not only be motivated by price, and the marketplace would still reward them. How skilled did you have to be on pricing property? Not at all,” says Novello.
This week on The Walkthrough™, Novello shares six essential phrases that will help you succeed in that potentially uncomfortable conversation with your sellers.
Phrase #1: “Fair market value”
This is your way of asking the seller to imagine if the tables were turned, and they were the buyer. You want to encourage them to be fair in their pricing, despite what happened over the past two-plus years.
“So, when I say to you, ‘Where do you think you would feel comfortable making an offer that you believe would be reflective of fair market value?’ I’m triggering in your brain, ‘Oh, I gotta be fair here.’ You’re either gonna say something reasonable, unreasonable, or you’re going to hem and haw. It’s one of the three.”
Phrase #2: “The marketplace is showing us”
Now that you’ve shared data with the seller, it’s your job to remind them that they can’t dismiss what the market is showing. A reasonable seller will process that information and decide on a fair market value sales price given the data you’ve shared, and you will agree with them. But, again, it’s the seller who has made the final decision on the price. Novello says your response should be something like this:
“’I’m in agreement with you that the marketplace is showing us somewhere around $550,000 seems to be reasonable.’ Look how different that is than the way most people do that. Most people are like, ‘I believe, I think. I think we could get this.’”
Phrase #3: “Through no fault of your own or mine”
Sellers tend to blame the agent when the home doesn’t sell, so this phrase helps remove yourself from the equation. Novello says that using this phrase will relieve the sellers from any blame, as well, by using a script similar to the following:
“Through no fault of your own or mine, market dynamics have begun to shift and change. So what I’d like to do is to go over some of those changes with you in hopes that doing so can help you to get the clearest picture as to where we [are].”
Phrase #4: “Price is a snapshot in time”
This phrase tells a seller that whatever their neighbors got for their house a few months ago is no longer relevant to today’s prices.
Helping your clients understand how market conditions are ever-changing will eliminate some of the unreal expectations they may have when pricing their home. Reviewing recent market data with them will help paint a clearer picture and make comprehending those recommendations easier.
Phrase #5: “My job is to help you, it’s never to talk you into doing anything”
The internet has changed the way sellers view real estate. With so much information at their fingertips, they come to the table with their own views on pricing their home and don’t have to rely so heavily on your advice as their real estate agent.
But, Novello says, it’s still your job to advise and guide them to make a sound decision by presenting them with options based on your professional experience.
“Because ultimately, that is what’s really true, is that it is your decision to make, and I’m honoring the fact that it is your decision. Unlike most agents, what they’re trying to do is they think it’s their decision. It’s not. And then it becomes a battle between the two of you. No, no, no. What this should be is consultative, instead of me sitting across the table from you wagging my finger.”
Phrase #6: “Whatever you decide to do, I’ll support you 100%”
After you’ve given them all the facts and presented them with options, as long as you’re in agreement, let them know that you support their decision. Novello says that’s really what they’re after and suggests communicating it this way:
“Hey, here’s the information. Here are the options that you have at your disposal. If you want my opinion, I will share it with you in terms of which option would serve you best based on my professional experience. Ultimately, it’s your decision. And whatever you decide, I’ll support you 100%.”
The market continues to change, and in order to remain successful as a real estate agent, the price conversation must change, too. It’s not just our clients who may need a reality check. As agents, we need to adjust our communication style to reflect these changes in the marketplace. Working on our own skill sets may be a necessary part of our development as we navigate this ever-changing real estate climate.
This episode of The Walkthrough™ includes a bonus segment. Don’t miss our separate article about the price reduction conversation.
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