The best time to “set-up” a price reduction is when you take the listing (you already knew that, right?).

But if for some reason you’ve taken an overpriced listing and need to get a reduction, you can use this simple process to correct the situation and save yourself months of carrying expenses.

This process is part of a face-to-face “price reduction meeting.” Top Agents use these meetings to establish trust with sellers, get price reductions with ease, and ultimately sell their listings faster.

I’ll give you the outline of how the price reduction meeting should go and the exact questions to ask your seller-clients during this important meeting…

4-Steps To A Successful Price Reduction Meeting…

Your price reduction meeting with sellers will be similar to your original listing presentation, except you now have accurate, historic information about the seller’s home.

STEP 1: Present an Updated Market Analysis

Before the price reduction meeting, you’ll need to prepare an analysis similar to your original CMA (or “Maximum Home Value Audit™”). During the meeting, compare your seller’s home with all of the other listings, pendings, and sales in the area.

Analyze other statistics such as average time on the market, price ranges, list price to sales price reduction percentage, and the percentage or number of listed homes sold during the same period as the seller’s listing. After presenting the market analysis, ask your clients 2 questions:

STEP 2: Present Your Completed List of Marketing Tasks

Go through your original marketing plan, and discuss every action you’ve taken to market their home. Explain the impact or exposure of each action on generating prospective buyers.

You can also explain the historic impact each task has had on selling other homes you’ve listed, or homes sold in the area. Your objective is to reinforce the seller’s confidence in your ability to market their home. At this point you want to ask another 2 questions:

Some sellers value open houses, others want to see more agent showings — everyone makes their own expectations, logical or not. Listen carefully here. You can adjust your marketing plan to better fit their expectations if it’s warranted. Nevertheless, the sale issue will always come back to pricing the home — the seller’s responsibility.

After the sellers finish sharing their thoughts on the marketing of their home you can move on to the feedback you’ve received…

STEP 3: Present Feedback and Areas For Improvement

Take out the comments you have from touring agents, showings, and open houses. Review the comments relating to price and showing condition of the home.

These comments are very important because they are honest, third-party opinions about their home. Sellers may get a little upset at this point, but it’s important they hear feedback that will better motivate them to sell their home. At this point, you want to ask the following question:

If some of the comments made require physical improvements to the home, you need to open that discussion and start making plans for improvements. But, don’t get the issue confused — there’s still a price issue to be discussed…

STEP 4: Ask For The Price Reduction

The first thing you want to tell sellers at this point is you’re doing everything possible to promote the home, as shown from the activity and marketing plan. Second, tell them that your efforts will be fruitless unless “we” adjust the price to get closer to buyers expectations. Then tell them the following:

IMPORTANT TIP: Notice I used a percentage, not a dollar figure? Percentages are more relevant and better received when making price adjustments. Clients will probably want to know how much that means in dollars, and you should tell them, but present it first as a percentage.

Then ask the following question:

At this point, they’ll either say “OK”, or they’ll have common objections. Remember, objections are just unanswered questions revisited. Handle each objection keeping in mind that seller’s have many emotional attachments to their homes, which can compromise their rationality.

And one final thing…don’t forget to complete and sign the agreements for the price adjustment AHEAD OF TIME. Keep the “price” field empty, but complete the rest of the agreement. You’d be surprised how many agents forget at the end of this long (but now much easier!) process.

[Ed note:  If you'd like proven answers to price-reduction objections, learn more about our new program Superstar Closing Secrets™ by clicking here...]

One of the biggest mistakes new or struggling agents make is they spend too much time pursuing low quality leads. They believe that working with any prospect is better than no prospect at all.

Problem is, unqualified prospects rarely turn into income-producing clients. Nothing is more frustrating than investing large amounts of time, money, and energy with buyers who ultimately flake-out on you, get cold feet or end up working with another agent.

The secret to maximizing your income per hour practicing real estate is to “qualify” each buyer lead that comes across your desk before spending your valuable time with them. And the ONE item you want to qualify is…

Their True Motivation to Buy

How do you understand buyer motivation? By simply asking the right questions, then close your mouth and listen carefully.

Here are 7 “motivation-detective” questions you can use to screen buyer leads (some of them will work for sellers too). They can be used as a “phone script”, in person or even by email…

1. Why Are You Thinking of Buying?

Determine their legitimate reasons for buying: Move-up, empty nester, retiring, first time home buyer, investment, relocation, job change, lost job, etc. It also gives you an early indication if they’ll be a good client or a “time-waster.”

Also look for the “common connection” with the caller (kids go to same school, go to same civic organization or church). When you find something in common, or discover specific needs, communicate how you share the same interest, or have a specialty in what they need.

Your goal with this question is to begin building a relationship. While they’re talking about their life situation, identify a bridge to your unique services…how you can help them with their problems. As the conversation progresses, you can use this information to convert them to an appointment, that is, if you conclude the lead is a motivated buyer.

2. What Type of Property Are You Looking For?

This question identifies multiple things at once that you may not realize at first glance. If you ask this question and the response is that the potential buyer is looking to invest in a foreclosure…

• You can identify in your mind where you might look for foreclosures in your market area and how long it might take…
• You can identify how you might be able to help them (if your expertise is right for them)…
• And you can identify if they are realistic in their desires.

For instance, an unrealistic buyer may want to buy a foreclosure that needs some repair work to get a better price, but doesn’t have any extra money to do the repairs. You’re job is to identify any disconnect that could lead to you wasting your time.

You’ll end up frustrating them (and make yourself look foolish) if you show them homes that require no repair work but are out of their price range. Or, just as bad, showing them homes they can afford but that need immediate repairs (for which they don’t have money).

Don’t worry about getting every last detail of their search criteria now. You’ll get more information from them if you meet in person. Your critical objective is to see if they are motivated, realistic and a good client that provides a paycheck and not the run-around.

3. How Soon Do You Want To Be In Your New Property?

If it doesn’t come up in the discussion from the last two questions, ask this qualifying question to determine the time frame of the potential buyer.

You can also ask, “How Long Have You Been Looking?” If they’ve only been searching for a couple months and don’t have an urgent reason for moving, they’re probably not motivated enough to commit your most precious asset: your time.

If the prospect doesn’t want to move soon (generally in the next six months), you’re wasting your time meeting with them in person. You can still put them on your contact database, give them market updates, and send them your regular monthly newsletter… keeping in touch and developing a RELATIONSHIP with them until they’re ready to buy.

Wait to meet in person at a later date once their time frame is less than six months.

4. Have You Bought A Property In The Past?

You’re trying to gauge if they are familiar with the home buying process. Understanding how knowledgeable they are will allow you to better communicate your value in helping them in their search.

You may already know the answer to this question from prior discussion with the prospective buyer. This is a golden opportunity to highlight common problems and frustrations with the home buying process and to present your unique solution.

If they’ve bought a home in the past where the process seemed overwhelming and they didn’t think they got a great deal…Inform them of your buyer process that will find the perfect home for them, at the right price, and without the common hassles they’ve had in the past.

5. Have You Been Pre-Approved?

Notice this question doesn’t say, “have you met with a lender?” or “have you been pre-qualified?”

It asks about “approval.” Why? Because when your clients are pre-approved, you know 1) they’re serious about buying, 2) you know how much money they’re able to spend, and 3) they’re ready to buy NOW.

Chances are they are not approved, so you need to get them approved before moving forward. The best way to motivate buyers to go through the approval process is to say,

6. Are You Working With Another Agent?

You don’t work for free! Ask this question above early in the conversation to determine if you should even continue…

• If the person is working with another agent, you can ask them if they’ve signed an “exclusive” Buyer Broker Agreement.
• If they already signed an agreement with another agent, ask them why they’ve called you instead, and then explain that their agent would be better to answer questions.
• If they are unsatisfied with their current agent or their agreement with another agent is ending, investigate how you can help them.
• If they are NOT working with another agent, continue directly to the next question.

7. When Can We Meet To Discuss Your Property Search?

Notice the question was not, “can we meet…?”, but “WHEN can we meet?” Why? Because the latter question leaves little room for a “no” answer.

This is the ultimate way to determine how serious the buyer is in the search, because if they don’t want to meet in person in the next week, they’re not ready to buy and will waste your time.

Here’s a tip: try to meet in your office if possible. This way you will have control and can present your services, make copies of documents, and have their full attention.

Your time is valuable. Guard it like Fort Knox. Properly qualifying buyers is one of the quickest ways to reduce the number of hours you work, get your commissions faster, and maximize your income per hour.

[Ed. note: To find out how to work with the highest-quality buyers and sellers, learn more about our new program Superstar Closing Secrets™ by clicking here...]

Don’t you wish every FSBO understood the value your services bring to the transaction?

If you’re tired of cold calling FSBO’s to “convince” them to list with you…take just 2 minutes to read how a veteran agent in Illinois gets FSBO prospects to beg her for representation…

Linda’s proven process is a winner if you take this easy strategy and use it in your practice. Here’s her idea (in her own words)…

“I have found that cold calling never works to persuade FSBO’s (or anybody else) to list with me.  Instead, I use the following 4-steps to get FSBO’s to beg me to work with them:

STEP 1:  Gather FSBO Contact Information

On Friday’s I go through our local paper and the FSBO web site and pull all the “open house” notices in the paper (with phone numbers and addresses) in the areas I’m working.

STEP 2:  Contact FSBO’s and Get Appointments

I start making calls to the FSBO’s. My conversation goes like this:

Hi, My name is Linda Fogarty and I’m a real estate broker with Coldwell Banker. I noticed you have your house on the market (NOTE: I DO NOT TELL THEM I KNOW THEY’RE HAVING AN OPEN HOUSE), and I like to stay on top of the market and was wondering if I could preview your home.

Nine times out of ten the FSBO will be more open then any other time. They are getting their home ready for an open house and are afraid no one will show up. So they usually respond by telling me they are having an open house so I can come over. Then, I respond with:

Oh, I would love to but I’m having an open house myself, could I come over AFTER my open house?

They always say, “YES”! The reason I don’t go over during their open house is because I want their undivided attention. I continue to call FSBO’s in the same general area until I have a minimum of 3 appointments.

STEP 3:  Make the First Visit and Become the “Helpful Agent”

When I arrive to their home, I start asking questions about their open house and of course my open house was always better.  I am building rapport while I’m looking through their home and noticing they don’t have any of the following home marketing tools…

• brochures
• seller’s disclosure forms
• sign-in forms

I give them a few extra copies of the forms and tools they need to have a good open house.  In essence, I become their helpful REALTOR^®.  Plus, I just happen to have a copy of one of my beautiful brochures of my listings (so they see what they’re missing out on).

STEP 4:  Follow-Up Each Week with Valuable Resources

During the next few weeks, I drop by with helpful articles that I read and thought might interest them, or I drop off forms I think they might need, or I do a market analysis for the neighborhood and go over it with them.

I have created 10 weeks of “stuff” in files that gives me another reason for going back to them again as a “helpful REALTOR^®.”  I rarely or never ask for the listing.  In most cases it comes right to me.  Why?

Because most agents I know who prospect FSBO’s give up after the 1st or 2nd try.

BIG TIP:   I stay persistent when other agents are unwilling to keep going back.  My average number of contacts with the FSBO is FIVE! I get most listings by the 5th visit, but I don’t give up even if it takes TEN visits. When they’re ready to list, I’m getting the listing.

I’ve calculated the amount of time it takes to call 100 FSBO’s to simply get one deal, and found that following up with a handful of open FSBO prospects each week is far more profitable.  I know it will be for you too.”

Thanks for sharing, Linda. I don’t think there’s any agent reading this who couldn’t immediately start using your system. Best of all, there’s almost no money needed!

One final thought: even if the FSBO sells on their own, you can add them as a contact to your database for regular monthly contact.  And then you open yourself up to getting a flow of referrals. Remember, it’s all about building market share. And market share comes from building and nurturing your House List!  Learn more about maximizing your referrals here.

Now that the new year is upon us, I’m getting calls and emails from agents who want a better, easier way to grow their businesses.

Below, in no particular order, are FIVE strategies and in-the-trenches “marketing wisdom” that will help you generate more clients, and build a long-term viable business. Many of these suggestions are further detailed in the 3-Steps Marketing System.

1. Prioritize Your Marketing Time, Money and Effort According To the QUALITY Of The Prospect/Market

“Quality” is defined as how well the prospect already knows you and is most predisposed to use you over any other agent. Remember:  never chase cold prospects at the expense of higher potential prospects. Here’s how I believe you should prioritize your marketing:

• Build a “house list” and market to them on a monthly basis (this is your “market share”, where 70% or more of your business should come from – more on this later).
• Market off “Transactional Leads” (from your listings for buyers) and other listings (once you have them).
• Work hot leads – follow-up is essential. At the very least, you know they’re in the market to buy/sell, and most agents hopelessly ignore follow-up.
• Do your research homework to select market niches that have the most promise, and work them (i.e. fish in a stocked pond) – this includes geographic markets (farms), specialty markets (resort, golf, vacation, etc.).
• Work FSBOs and Expireds – but notice the low quality of this group. We both know the reason. Here’s a revealing fact: The National Association of REALTORS^® produces an annual research report called Profile of Buyers and Sellers. It’s filled with lots of facts and figures, but the most startling fact they’ve discovered is that approximately 74% of all real estate transactions occur because the client either 1) knew the agent already, or 2) was referred to the agent from a trusted source.This means that 3/4 of all transactions happen because of a relationship –  yet only 4% of all agents have any “systems” to harvest deep relationships and build market share. So about 4% get the lion’s share of business and 96% wrestle each other over the scraps. THIS fact alone is why I told you (above) to create a “house list” of friends, family, past clients, acquaintances, etc., and market to them first and foremost. It’s also why I created Service For Life!^® at www.ServiceForLife.com as a ready-to-use tool to capture that business. I’ll cover this in more detail later.

2. When Starting Out, Spend 80% of Your Time Prospecting

Whether it’s cold prospecting or establishing marketing systems, focus your resources on getting business. Don’t allow distractions (self imposed or otherwise) to interfere with this task. At the same time, don’t neglect establishing other marketing systems so you can quickly stop manual prospecting.

3. Get a Hotline and Use it

Your hotline will become the foundation of your marketing systems, and will become the “mechanism” that generates leads and clients automatically from ALL your other marketing, so you can do your job: working clients, closing deals and cashing commission checks. You’ll use it for classifieds, display ads, sign tags, info tube flyers, listing presentations, and lots more. Go to www.SixFigureHotlines.com and subscribe to the free course there and examine Proquest’s hotline service – it’s first-rate and they give you extra marketing tools to use in your practice.

4. Product-Ize Your Real Estate Services

This industry is a mass-commodity of agents all screaming the same thing to prospects. You need to be seen as different. So create unique products out of your services.

• For example: “Your Maximum Value Home Marketing Plan,” or “Preferred Buyer Program”.
• Another example: Rather than give CMAs, agents will offer a “Maximum Home Value Audit” to examine and determine ways to maximize the value of a home and sell in least time.

The secret is to weave the greatest benefit for the client into the name. Then, make a simple list of everything you do for the client as part of your program – even if other agents do it, it’s likely they don’t promote it, so you have the advantage.

5. Make Yourself A Self-Proclaimed “Specialist” in Your Market

Farming a resort area? Make yourself a “resort property specialist” and title your product specifically to it: “Ventana Canyon Golf Property Specialist” and “Ventana Canyon Maximum Value Golf Property Program.” Use your creativity and match your services specifically to the market.

Your success in 2010 and beyond require intense focus on your highest priority activities. This list will get you started down the right path of where to make changes to grow your real estate practice this year, and for the future.