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How to get vendors to set a realistic price

Written by Melissa Fagan | Aug 25, 2017 5:28:23 AM

(This article is a 4.5-minute read)

THREE THINGS YOU’LL GET FROM THIS ARTICLE

1. Four tips for approaching sellers

2. Links to some great tools to help build trust

3. Advice on how to educate sellers

 

 

Every vendor wants the best possible price for their property. And every agent wants to help them achieve that price. But no one wants to hear the words “passed in”. As an agent, you have to get  vendors to set a realistic price for a property upfront for a successful vendor/agent relationship.

 

If you set the price too low at the outset, you risk the vendor going to someone else. If you set the price too high—or if you allow the vendor to overestimate their property’s value—you risk ending up with a dissatisfied vendor.

 

So what should an agent do? How do you attract a vendor’s business, and keep them satisfied?

 

Here are some helpful tips:

 

Understand the emotions they are going through

Emotions can easily get in the way when it comes to selling a home. Emotional attachment to a place, or expensive renovations, may lead a vendor to overestimate their property’s value. So exercising empathy is important.

 

Yes, it is a big decision. A potentially life changing one. Acknowledging this from the outset, then arming the vendor with clear facts and figures they need to help make their decision, will go a long way to towards building trust.

 

Create content that will get vendors to set a realistic price

According the Real Estate Institute of Queensland (REIQ), the typical home ownership cycle is five to seven years. Sharing meaningful content on your website is a way of building relationships in your local community, and could help vendors to set realistic expectations even before they know they want to sell.

 

If they like your content, they are more likely to like you, trust your valuations and listen to your advice. Helpful content isn’t just about you. It addresses the reasons why people may want to sell. Used in combination with a smart content marketing strategy, you can start to build that trust with sellers before they even know they’re going to market.

 

Show them the research, don’t just tell them

Vendors need to know what the market is doing so that they understand why their ideal price may or may not be achievable. The Comparative Market Analysis (CMA) from RP Data Professional is a great place to start.

 

The data shows the vendor where the market is, and whether prices for similar properties have gone up or down their area. A savvy vendor will know to ask for these, but even if they don’t, providing the information can help to gain that all-important trust.

 

Alternatively, show them a written statement that shows how you arrived at an appropriate price, or suggest they inspect current open homes in their area.

 

Manage their expectations

Ultimately the market decides what a property is worth. But every buyer is different, which means setting prices is far from an exact science. For that reason, agent Diane Sims, formerly of RE/MAX Colonial Annerley, says it’s important to manage the vendor’s expectations accordingly.

 

Diane says, “You can’t know you can’t always know what someone might be willing to pay. Maybe there’s a certain reason they want to own that house—they’ve got a mother who lives in the street perhaps. For all those reasons, they will pay more.”

 

In most cases Diane encourages clients to advertise on the basis of offers over a certain amount, so the market can decide.