This past week my team and I discussed what to do with listings that just will not sell. There are a number of reasons why listings struggle to sell including price, condition, location, and current buyer needs and wants. We focused our time together talking about a nine step guide to reaching resolution with these types of listings and our clients. This guide is not exhaustive and I encourage your feedback and critique. If you have a listing that is “stale” and not selling, you may want to consider the following process.
Step 1: Have a heart to heart with yourself, and ask yourself if you are willing to lose this listing, work harder than ever before, improve your communication, and truly connect with your client? Are you willing to do what it takes to bring about resolution, whether that means a sale or a canceled listing?
Step 2: Perform market research on your local area. Discover as much as you can about the regional and local market trends. Look specifically at the price range of your listing and analyze the average days on market, list price to sale price ratio, standard seller concessions, average sale price, inventory levels, and the number of homes sold per month on average. Become an expert by knowing everything about this price range and the market. Talk to other brokers that have successful sold comparable listings and talk to appraisers about values. Learn what it is taking to get homes sold.
Step 3: Perform a property analysis. After you have a grasp of the general market in your listing’s price range narrow your focus to your actual listing. Look at your current price compared to other homes on the market and assess your listings overall condition inside and out. Does it have amenities that are better, worse, or comparable to other homes that have sold and that are appealing to buyers? How does your home’s neighborhood stack up? You may want to consider paying for an appraisal to be done to help you determine what the home would sell for at this point in time. This appraisal could be very helpful later.
Step 4: Develop a short term strategy that takes into account all of your research on the competition and the overall market. If you are going to adjust price, what level will you recommend and for how long? Does the interior and exterior condition of the home need to be addressed? Review all of your marketing efforts to make sure they align with your strategy. Be willing to try new approaches that you’ve not done in the past.
Step 5: Review your client goals and remind yourself of their motivation for selling. In this market, sellers are typically price driven, relocating, or moving to remove a financial burden. Others may be moving just because the opportunity to move up in this market is so fantastic. No matter the reason, make sure that your strategy is in line with your client’s goals. If it is not, you may need to change your strategy and its end goal.
Step 6: Practice your presentation in front of a peer or your manager. Ask them to throw you objections and challenge your strategy. This will be good practice for when you sit down with your client. Identify the points in your presentation where you are certain to cause the client stress resulting in pushback. Make adjustments as needed so that you truly believe in your strategy and can confidently articulate it to your seller.
Step 7: Present your strategy to your clients. Be very clear and concise with your information. Do not overpromise results or response from buyers. Focus on what you can control. Review your market trends and feedback that you received from peers regarding price, condition, and the homes overall ability to sell. Tie your strategy back to their main motivation and need. Say, “if we implement this approach to selling your home, I believe we will be able to help you achieve your goal of _____.” Answer their questions with candidness. If they want an answer you can’t give them, then let them know you cannot and why. Review your timeline and benchmarks for where you hope your strategy will take you in the next 30, 60, or 90 days.
Step 8: Implement your strategy. Your sellers will be holding you accountable to what you presented to them and you owe it to them to keep them informed of the progress. Keep your sellers up to date on deadlines approaching for an “if-then” decision. For example, “if we reduce the price and we have no showings for two weeks, then we agreed our strategy would be to reduce the price again”. Follow your strategy and adjust only as needed.
Step 9: Live with results of your strategy even if this means that you lose the listing. Our goal should always be to help the client achieve the highest price possible in the shortest amount of time. However, there are some listings that just will not sell and a tough decision must be made by the parties involved. At the end of the day your seller will most likely be faced with a decision to cancel the listing and re-list with another brokerage firm, rent the home, stay in the home and cancel the listing, go through a short sale or foreclosure, or continue to reduce the price until it sells. My personal opinion is that you cannot hold at a price and just wait for a buyer to show up and pay your listed price. In a depreciating market too many sellers will be proactive and reduce their price until it sells thus creating comparable sales that you, and an appraiser, will be forced to deal with even if you do receive an offer at your hold firm price.
Again, this list is not the end all list but I think it does layout a strategy for getting resolution on your listing that is struggle to sell. You’ll notice that I focused on the word resolution instead of promising you that this guide will lead to a sale. When we over promise and under deliver it ruins our reputation and erodes the trust our clients have in us.
Question: What are you doing with your listings that just will not sell?
Make it a great day!