Success depends on having an open conversation about expectations
- Some sellers have a firm price they want to achieve, even if it means their home stays listed for six months or longer.
- When sellers are not motivated to sell quickly, consider altering your listing agreement to mitigate your risk and expense.
- Have an honest conversation with sellers about what happens when “sellers fatigue” sets in and they doubt your ability to sell at the price they’ve set.
Sometimes you’ll encounter sellers who are in no hurry to sell. They have a price in mind that they want to achieve if they’re going to sell. You, as a real estate professional, have to decide if you want to sign up for such a situation.
This happens most often with very high-end homes. The owners have put a lot into the house, and they want to get that money out, but the market may not be there. If it’s a unique house, there’s a shot in the dark that it could sell, but the evidence says the chances are extremely low.
Agents are often thrilled to have such a listing in their portfolio, but they often underestimate the challenge they’re walking into.
In these types of situations, it’s best to take those listings on a case-by-case basis and always have the following talk with the client:
How much you’re spending up front – On every listing, you’re making an investment of time and money in hopes that you will not only get reimbursed but that those efforts will be rewarded with a commission. When you have sellers who have little motivation to sell their home, you might be spending a lot of time and money up front on something that’s going to be unrealistic for your marketplace.
As an alternative to turning down the listing, you can protect yourself by altering your listing agreement. Start this conversation with your client by saying, “I’m taking on a lot of risk and expense, and these types of listings can take a very long time to sell.” You might have the seller pay for some of the marketing up front. If it’s a big house, maybe there’s room to cut off some of the commission in exchange for the seller paying costs up front.
The seller will begin to doubt you after six months – You want to talk to the client about what’s going to happen long term. Tell the seller, “I’ll take this listing, but here’s what’s going to happen. After six months or maybe a year, you’re going to get pretty sick of having your house on the market because I’ll call to schedule a showing at what seems like always the worst time. You’re going to have to clean the house; occasionally the buyer isn’t going to show; it’s going to be a big, continual frustration so long as the house is listed for sale.”
It’s going to get annoying, and at some point the seller is going to think: I wish this thing would sell already. Why can’t my agent sell this? It’s the agent’s fault. I maybe need to find a new one. I guarantee they will start to feel that way if the home remains on the market for a year or more.
So I have this conversation with them before I take the listing: “Here’s what happens in these situations. The seller starts to get frustrated and begins to doubt their agent’s abilities. Then they get a new agent.
The new agent comes along and says, ‘The problem is you’re overpriced.’ By this time, the seller is so discouraged that they’re then open to a lower price. So the new agent lists the home at a lower price, and then it sells and he looks like the hero and gets all the credit — and the commission. Meanwhile, the agent who listed it the whole first year is left with nothing.”