Listings are slim pickings in many parts of the nation. For some, an inventory shortage can quickly lead to desperation and compromised business standards.
Case in point:
A particular seller was adamant about listing her home almost $75,000 above market value. The agent, unwilling to lose the listing, did the unthinkable: he agreed.
Two months later, the home sat with only one lonely, lowball offer. The sales agent pleaded with the seller to reduce the asking price during those two months, but his request fell on deaf ears.
Can you guess what happened next?
The agent got fired by the seller.
In a predictable twist of events, the seller listed the home with another agent at the exact listing price originally recommended by the first agent.
It closed shortly thereafter, and the original agent lost his marketing dollars and his good name with the friends of this seller. He might have even lost his spirit and motivation.
This scenario is what drives some salespeople out of our industry and causes them to resent clients.
So, what could have been done differently?
Some agents might say they would have never taken the listing in the first place; others might say they would have asked for a retainer.
Do you agree?
I don’t.
Solve the issue by preventing it
The best thing to do is address this and other matters in the initial brokerage agreement.
Include stipulations that allow for automatic price reductions, eliminating selective seller memory.
Are you curious about what selective seller memory is?
Have you ever heard your seller pleasantly say, “Sure, we can reduce if we get no activity,” only to hear them deny having said it when the time comes to reduce the price?
That’s selective seller memory.
You call the shots in your business
Don’t rely on memory or verbal agreements that can end with you losing control of your business. Try adding the follow time-bound stipulations to your written agreements:
If no offers have been accepted by _______ (date), all parties agree to automatically reduce the sales price to ________ (new listing price).
Don’t stop there. Have tiered price reductions if need be:
If no offers have been accepted by _______ (date #1), all parties agree to automatically reduce the sales price to ________ (new listing price).
If no offers have been accepted by _______ (date #2), all parties agree to automatically reduce the sales price to ________ (new listing price).
And so forth.
The beauty of this method is that you’ll be making these agreements during the brokerage signing, when everyone is most agreeable and friendly.
Help keep everyone happy by explaining upfront how the entire listing process will unfold, getting it down on paper and having it signed.
Lee Davenport is a licensed real estate broker, trainer and coach. Follow her on Facebook, Instagram, YouTube and Google+, or visit her website. This post comes from her book, Profit with Your Personality.
