- Hey everybody, welcome to the Tom Ferry Show.
On the road, in a car, wanna get right to it.
(slow heavy bass rock music)
There's no doubt, as I've been talkin'
about and you've been feeling it,
there are changes happening in the market.
Now I don't mean the world is falling
apart under any circumstances.
What is happening, though, and you see it in your town,
the areas that used to be selling (finger snap)
in two seconds by just putting in the MLS
are now sitting on the market,
those properties, a little bit longer.
Which tells me that you and I,
we need to get ahead of the curve
on our pricing strategy and we gotta get
comfortable asking for price reductions.
I wanna reiterate, as I've said a few times,
certainly on Facebook Live and Instagram Live,
that the vast majority of real estate professionals,
maybe you watching this, call it four, five, 600,000 people,
have never been in a market like we're going into.
So skills matter, my friends.
Let me just remind you first and foremost,
today when it comes to pricing, obviously,
you have to figure out is this a
speculative seller or is this a real seller.
I think that the marketplace we're going into,
unless the property is so exceptional,
so unbelievable, so unique, so rare,
taking that speculative listing, that seller that,
if they could get their price they would move,
is just gonna be a bad idea.
Bad for you, bad for your timing, bad for your business.
So, we wanna move away from the speculative
sellers and we wanna focus on the ones
that (finger snap) absolutely have to sell their home.
Not the ones that feel like, oh my god,
I gotta give it away, but they have true motivation to move.
Moving up, moving down, moving out, you know the drill.
The first thing I would say to you is go back
to early Tom Ferry shows where we talked about agents,
for the most part, when you're competing, you can say this.
There's so many great lines, I wanna give you some lines.
You're walkin' in the door.
You're goin' into your listing presentation.
You're starting your pitch, and you get to price,
and you say, Mr. and Mrs. Seller, let's be clear.
I could line up a thousand agents out your
door and because we're all looking at the
same data inside the MLS and others,
because we're all looking at the same stats,
we're all gonna give you a price within a range
of one or 2% because we're all looking at the same comps.
So you're not hiring me just about price,
you're hiring me to market and expose your home
to the highest number of qualified buyers and
the agents that represent them on the vast
majority of platforms, digital, social,
and everything so we find that buyer for you.
So let's talk about marketing.
That, my friends, is an important line that
you may wanna start incorporating.
Again, I can line up a thousand agents out the door.
We're all lookin' at the same stats.
We all see the same comps.
We're all gonna give you between one and 2%, right?
So it's not about an agent that gives
you the highest or the lowest price,
it's really about who's gonna market
your home the most successfully.
And then you go into your marketing,
and you get the yes on the marketing,
then you come back to price.
Now, again, I've done a lot of work on the
Tom Ferry Show on this specific subject,
so you can go through and watch this in-depth
where I did one entire show on it,
but I wanna remind you high level.
In a competitive situation, which we're in,
they're gonna be talking to other agents,
and we know that the vast majority
of agents aren't paying attention.
They're gonna overprice it.
They're gonna undercut their commissions.
They're gonna do whatever it takes to win.
We need to counter that.
And counter the discounters,
so let's get into both of those.
The first counter is to say to the clients, sellers,
you can meet with 10 agents and I can tell you
right now that 10 out of 10 minus myself,
they're gonna walk in and they're gonna say,
here's your price, right?
Or worse, they're gonna ask you,
what do you guys wanna sell your home for?
And I'm not saying that that's not an appropriate question,
Mr. and Mrs. Seller, Mr. Seller, but here's the reality.
An agent that only has a one price pricing strategy
is not the agent that gets the highest possible
net proceeds for their clients in this environment.
I, on the other hand, have a three pricing strategy
empowering you to decide what is the right
strategy for you guys in your circumstance.
Let me explain.
The three pricing strategies, number one is,
we go for the highest possible price.
We wanna break all records,
and I actually will say to clients,
what we're saying is, needle in the haystack.
You're saying, Tom, I'm gonna hire you for your
marketing to find me the needle in the haystack.
And look, it happens every now and then,
but the vast majority of those homes in this market,
they sit on the market 'cause
they're simply pricing it too high.
But I acknowledge that that is a strategy.
The second strategy, the most likely strategy,
is we look at the comps together,
we look at the information together,
and we say, let's price it basically what
we would call fair market value.
Fair market value is what the buyers are gonna see.
It's what the lenders are gonna lend to.
It is the norm in the market, regardless of, you know,
the things that we love about your home,
which we all love about your home,
people are still gonna say, well, the data tells us
this and that's what we're gonna write towards.
That's the second pricing strategy.
My savviest of clients, my savviest of sellers,
will say to me, Tom, we don't wanna give it away.
We wanna get the highest possible price.
Let's do somethin' different.
And that's where I say,
let's price it below fair market value.
Let me explain before you get shocked.
We're gonna price it below fair
market value because what do we know?
When you have a nice home like yours,
in a great neighborhood like this,
and you price it below fair market value,
suddenly you have what's called that auction experience.
That bidding war opportunity where we do all the
marketing that I agreed to a minute ago,
all the things we're gonna do to bring in the buyers,
to bring in the agents.
The world's gonna know your home is for sale.
We're gonna unveil this thing beautifully.
And when people see it just below fair market value,
it becomes a frenzy.
And Mr. and Mrs. Seller,
I'm gonna advise you that creating that frenzy,
creating that frenzy means bidding wars,
and when bidding wars happen, prices actually,
in many cases, go above that second pricing strategy,
above fair market value, and could even lead towards
maybe the needle in the haystack.
So I'm asking you, with knowing what you know now,
seeing the comps and we're in this presentation,
you're in the moment, seeing what you see now,
which of the three pricing strategies do you feel
will get you the highest possible net proceeds?
And bam.
Now obviously, you've already walked them through the comps.
You've already showed them the needle in the
haystack prices that are now expiring,
that are now, have been sitting on the market
for six months, eight months, nine months, a year,
dependent upon your price point,
especially in the high end, and you know what?
The savviest of sellers are, if they're the nonspeculative,
I'll only sell if I get a crazy price seller,
the normal sellers, guess what?
They're gonna go here or there,
and when that happens (finger snap), you win.
So that's the first thing.
And if not that presentation,
those two little scripts I just gave you,
if not those, what are you gonna do?
What are ya gonna do in a changing
market to be ahead of the curve,
to service your client at the highest level,
and make sure they're not sitting on the market
for three months, five months, six months?
We want to avoid that trap.
So that's one consideration I want you to think about.
The other one is price reductions.
If half the real estate agents in North America
have not been in a marketplace like this,
it's pretty safe to say they haven't set up that
communication strategy, that tactic of communication,
with their sellers on a weekly basis, on a monthly basis,
where you're educating and informing
them about the things that we need to do,
what's happening in the market,
the number of showings, et cetera.
So the first thing I would ask you is,
do you have that in place?
Do you already say in all of your listing appointments,
we're gonna talk every Monday at 5 o'clock,
or every Monday between four and six,
and I'm gonna update you on what's happened in the
last week so you are empowered, Mr. and Mrs. Seller,
to make the right decision and you're informed
about what's happening in the market.
So we say, here's the number of new listings.
Here's the number of pendings.
Here's the number of price amendments.
Here's the number of cancellations, expireds.
You're informing them on what's going on,
and then feeding them the data around the showings,
and the feedback of your showings.
If that isn't in place,
if you're not informing them of the data,
of the number of showings, of the feedback,
and what's happening in the market, specifically,
properties like theirs and around move up and above them,
if you're not doin' that, in my opinion,
you haven't earned the right to ask for a price reduction.
You haven't earned the credibility,
the swag with them, to ask for a price reduction.
So, you do all that, and then what do you do?
You're 30 days in and you say,
45 days in, you pick the time.
Mr. and Mrs. Seller, we're on the phone,
I take you through all the numbers and then the
script that I love that we developed many years ago
in the old market that perhaps we're coming back to,
went something like this.
So, I wanna give you an update on the market.
Here's what's happening, here's what's goin' on,
here's the data, here's the showings, they're falling off,
here's the feedback, here's what's happening,
closings, yada yada, expired, sold, nine yards.
You're informed.
And then I'm gonna say to them,
so here's what we have to decide.
Right now, right now the agents in the marketplace,
the overall market, and most importantly,
the buyers, have rejected our price.
The agents, the market, and most importantly,
the buyers, have rejected our, not your price, our price.
They've rejected our price.
What would you like to do?
And you just shut up.
What would you like to do?
And they, uh, uh, uh, well, could you market it more?
Could you do another open house?
Like, you know, are you doing enough?
Like, you know, what about that
one person that just came through?
Let 'em go through all of that.
What would you like to do?
And, you know, many of them,
because you've earned the trust,
'cause you've been educating 'em,
you've been informing 'em what's goin' on,
they're gonna say to you, what do you recommend?
And you're gonna say, look,
I'm gonna strongly recommend we amend the price.
Amend the price.
Now I know price reduction is what I lead with.
I think amend is just a softer word, right?
Maybe it doesn't feel as harsh for people,
like reduce the price, though it's okay if you say that.
I recommend we amend the price to be in alignment with
what the buyers are willing to pay in this marketplace.
And then you make the recommendation of the price.
At the same, the same time, if there's something about
the house that is throwing the buyers off,
that agents are giving you feedback on,
it's also okay to say, you know, at this point,
I'm gonna recommend we repackage,
reposition, and amend the price.
We repackage and reposition the home,
and we amend the price.
I know I'm giving you lots of scripts here.
You're probably gonna wanna watch this three or four times.
I'm gonna recommend we repackage and reposition and
ultimately amend the price on your property to get it sold.
What do you mean?
Well, as I mentioned to you, we probably needed to stage it.
We probably need to redo the back yard.
The lawn and the landscaping up front isn't great.
The door of the building isn't ideal.
The things that we can adjust that would just be in
alignment for what buyers' expectations are today.
I wanted to share all this with you.
What I really, really, really wanna stress
is number one, I'm not being negative about the market.
I'm just paying attention to it.
The world goes in cycles.
Everyone is talking about it.
Some agents are really feeling it.
Other agents don't feel it at all.
That was the same thing in 2005.
It was the same thing I heard
for parts of the country in 2006.
And by seven, eight, nine, and we're not expecting
that level of craziness, that level of devastation,
but we are expecting that adjustment.
I just want you to be ahead of the curve.
Skills matter.
What you say matters.
Knowing how to package yourself and position
yourself and the dialogue required to really
properly inform and empower and educate a customer,
to make the right choice,
not just listen to the highest possible price,
move on, hope and pray to the real estate gods.
So, that's the message I wanted to share with you.
Excuse maybe the little bouncy, bouncy.
We're in a car, Tristan's behind the camera,
can't wait to introduce you to him.
We've got three videographers now inside the office,
I'm super fired up.
Expect lots of cool stuff comin'.
So, gimme some comments, what do you like about it,
what are you nervous about, what's goin' on, how can I help?
Facebook, Tom Ferry, YouTube, I'll respond to all of it.
All right, take care guys.
Remember always your strategy matters.
And now more than ever,
your passion and your pricing absolutely rules.
Hey, it's coach Tom Ferry.
Have you been considering hiring a coach?
If so, click the link below and check out what we do.
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