by Neil Jenman
Reading Time: Apx 2 mins
The easiest way to sell any property is to drop its price.
The first thing most agents do when a property has been on the market for as little as a couple of weeks is to suggest the owners drop the price.
In most cases, however, the owners would be better off dropping their agents.
Most agents are lazy and greedy. Why work hard to find a buyer for your home at a high price when, with one or two phone calls and some high pressure, they can persuade you, the owners, to drop your price?
Here is what you must understand when selling your home: Whether you sell for a high price or a low price, the agent still gets a high commission.
Now, granted, price is important when selling a home.
And yes, all sellers (except you and me) always want too much for our homes – or, indeed, anything we sell. Try and remember the last time you sold a car for as much as you hoped to get.
It rarely happens that sellers get the price they expect to get for their homes.
But the reason most sellers don’t get the price they expect is not the reason most agents tell you. It’s not that your price is too high.
No, it’s because the agents’ efforts are too low.
As a seller, you must give the agent a big incentive to get a big price for your home. And no, that incentive is not the commission because, as you have seen, agents get a big commission regardless of whether you get a high price or a low price.
The best incentive to give an agent to get you the highest price is, wait for it: NOTHING.
Here’s how it works:
Just as agents know that they get a big commission no matter what price your home sells for, they also know they get nothing if they don’t sell your home.
The worst thing that can happen to an agent, the one thing they fear most is seeing another agent sell your home.
In real estate, there are no second prizes to the agent who comes second.
If your agent thinks you are going to fire them and go to one of their competitors, they’ll work harder than they have ever worked for you. As the poet Kahlil Gibran wrote, “Love knows not its own depth until the hour of separation.” So true.
But what happens if you have signed up with an agent for three or four months and you are locked in, and the agent keeps hassling you to drop your price?
Well, first, unless you know and trust the agent (like they are married into your family), you should never sign-up for more than two months. Agents do their hardest work in the last month of a listing agreement so the sooner that last month comes, the harder the agent will work – and the more chance you have of getting the price you want.
But, even if you have been tricked into signing up for many months, you can still resist having your price dropped by telling the agent that, if they can’t get your price, you’ll drop them.
Please understand: Sometimes you must drop your price. But only as a last resort, not the first.
Most agents make dropping the price (your price) the first (and only) solution to the problem of a home not selling. Dropping the price should be the last thing you consider.
And think about this: How many agents, when asking you to drop your price, offer to drop their commission? None. Easy to give your money away, not so easy to follow their own advice.
In business, dropping the price of anything is always the weak way. It’s what the worst salespeople always do, those salespeople who don’t have the skill or the energy to get you a high price yet, amazingly, they still have the gall to expect you to pay them their full commission.
So, what should agents do before they ask you to drop your price?
Well, first, they should check the details of all the buyers who have contacted them in the past three months. They should ask themselves: “How many of our prospective buyers are looking for a home similar to your home?”
They should ignore the price you want and focus only upon who might want your home.
Instead of saying to prospective buyers, “We have a home you might like but it’s a bit overpriced, they should say – in an enthusiastic and excited manner: “We have a lovely home that we think could be perfect for you.”
Buyers buy with the heart and sellers sell with the wallet. If buyers fall in love with a home, it’s amazing how often pay the full price of the home or find the extra money they need.
Most agents get at least a hundred prospective buyer enquiries per month. Many get several hundred, some get a thousand or more.
The buyer for your home is certainly known to the agent now. Only trouble is that most agents are too lazy to sift through lists of buyers. It’s easier to ask sellers to drop their price.
So, if your agent is asking you to drop the price, you need to ask the agent: “How many prospective buyers have you personally contacted and talked about our home?”
And don’t fall for the line: “We email our new listings to our data base every week.” Sending bulk emails to a data base without making follow up calls is just plain lazy. Why should you drop your price for a lazy agent?
Oh, and when agents tell you they have called their last three months of buyers and haven’t found a suitable buyer, ask them to give you the lists of those prospects (after obtaining permission, of course) and tell the agent: “Let me call them and see how I go.”
You know what’s happening now, don’t you? Instead of pressure on you to drop the price, the pressure is on the agent to do the work.
No work means no job. It means you’ll drop the agent and find one prepared to do the work. It means the agent will get nothing instead of the several thousand dollars the agent is expecting.
Agents need to be made to work for their commission. For too long too many agents have had it too good. Many of the modern agents who think they are so good are not good at all, they have just ridden the wave of the near-twenty-five-year real estate boom. They have made their money without much effort. They have become lazy. Well now, with the pressure in the market, a lot of agents don’t know what to do other than tell sellers to drop their prices.
But unless the agent can prove to you that they have done the hard work required to find a buyer for your home, don’t drop your price.
Drop your agent.