You know how this goes to start. Sellers are often unrealistic about the price of their home. And we get it. They want to make money, not lose it. But markets change. They fluctuate. Homes depreciate from what they once cost or what someone first paid.

I already prepared you during Part I to arrive at an initial listing price. Now we need to discuss the continued price drops you may have to face with your client throughout the selling process. Remember, a price drop doesn’t have to be a downer. It could be the strategic momentum needed to close – a positive rather than a negative move.

Sellers, as we know, often insist on overpricing. They want a larger return and they usually have deep attachments to a house. So we developed a “script” you can use to navigate the price-lowering negotiations with sellers during the work phase. Letting go of a fantasy price is tough, but the looming threat of double mortgages can make a client jump off the roof. Seriously.

Part of your job is to be reality checker who reminds sellers that the house will sell when it is priced right for the market. Again, Redfin says houses in the United States are for sale an average of 70 days, and realtor.com put the number at 65. In some of my territory, if a house gets listed at all it’s considered a loser. You’re always on the shot clock. You have to move fast. You have to sell. You have to close. Or the property dies and rots on the battlefield.

Not only does your client and the house need to be in line with the market but also, if you overprice you’ll knock out potential buyers who won’t even take a look. You’ll have to go hunting for them hard when the listing price is lowered. All of that adds time to your days on market. This gives the vibe that something is wrong with the house.

On the flipside, if you price too low you’ll be flooded with offers, and then you’ll do a lot of sifting and analysis. Even worse, you might not get the best price for your client. The goal is to set the price correctly with (and for) your client from the door. But again, that’s easier said than done considering emotional and financial demands. Any number of things can keep a house from moving as planned. If you can’t identify them, you’re only choice is to drop the price.

Matt and I aren’t working pocket-listing Hollywood legend compounds every day. Our bread and butter houses, owned by the clients who keep our business thriving, are in the $2 to $4 million range. Their homes account for a large part of their personal wealth. We begin setting sellers up for the “price drop convo” as soon as we begin work. It’s part of the strategy and should be mentioned during every telecom, report, and meeting, along with news about the pricing of comps.

Your market might allow you many more weeks on sale before you feel you need to renew strategy. In ours, we have to turn on a dime. So, we make sure to document every interaction with a potential buyer or another agent and we bring this seller the news. We let the market speak for itself through these interactions. You are a reporter here, not a critic.

Then, you need to take control. You need to be aggressive. In this case, you need to find a middle ground with your client, the one you’ve been seeding. You need to drop to the right price that will get this house sold before it freezes altogether.

Price reduction is so much easier if you’ve been communicating with your client and have established the “team” mentality. Don’t call for the first time in weeks and hit them with a price drop. They’ll feel blindsided and screwed over. It’ll piss them off and maybe get you fired. Keep them involved and they’ll see that a price drop is just part of the game. They won’t be able to ignore it. They’ll argue at first, but the facts are the facts.

Next, since you’re a “Hollywood” agent you’ve been keeping records of every agent and potential buyer you’ve talked to. You know who liked the house, but not the price. You know the buyers you can go to, now that you’ve dropped to a certain number. Whenever you reduce, have this list ready. Pick from the top, and give someone an exclusive. They have to see it now or no chance.

If that doesn’t work, go back to the list and go wide. Call all agents and let them know you’re dropping the price. Use the drop as your fast break to move ahead, get more showings, and get offers. Post new visuals and redo the listing language. Attract a new wave of interest. Reduction is a trigger for action – a moment in the process for you to move the work phase forward. Refresh the presentation. Build the buzz. Play up the urgency. Let them know they must see the house now because it will not be around much longer at this new price.

We try and make whoever we call feel like we singled out them (and only them). So we say, “You’ve got to see this NOW. I can’t hold it at this price. Get back here! I need to know if you’re going to do this!” Price reduction is another use-it-or-lose-it moment. It’s a reality for every real estate agent who has ever lived, so use it to your advantage.

Negotiating with the client is a huge part of this job, so here’s a schedule for the price-drop conversations we all “love” so much:

1. Execute listing agreement
   1. Strategize and execute marketing plan
   2. Schedule and execute open house and brokers’ caravan
   3. Document, organize, and strategize feedback
   4. Set up communication system with client

End of Week I

2. Client reporting
   1. Discuss potential buyers’ feedback on house and price
   2. Update and manage expectations
   3. Discuss essential updates to the house based on open house feedback
   4. Tell the client about upcoming showings
   5. Schedule an update
   6. Refine list of potential buyers based on feedback

End of Week II

1. Document and report potential buyers’ feedback
2. Tell the client about upcoming showings
3. Schedule an update
4. Refine list of potential buyers based on feedback

End of Week III

1. Document and report potential buyers’ feedback
2. Begin price drop discussion based on market (potential buyers’) feedback
3. Suggest new price (let them get used to the number)
4. Schedule an update
5. Refine list of potential buyers based on feedback
6. Prep new marketing materials for MLS and adverts

End of Week IV

1. Document and report potential buyers’ feedback
2. Negotiate price drop
3. Present new marketing plan
4. Use feedback to recreate listing language and select new images
5. Communicate drop to interested buyers
6. Release new marketing materials to MLS and adverts
7. Return to Week I, repeat

Discuss any negative comments with the seller, especially recurring ones. Negative buyer feedback, motivation, and schedule are your golden hammers when negotiating price drops with your client. The date your seller wants to move out is a hammer. The fact they grow weary of the process of selling a property is a hammer. So is the “why.” Information is always useful; never stop listening even when you don’t like what you hear.

Use the comments of others to help shape your client’s point of view. Reinforce the need for the right price to accomplish what the client wants of you: to sell the house. Price drops are a part of that. Help your seller make connections between the price and the negative comments; move them from System 1 to System 2 thinking, if you can. Show them the comps again and discuss the market. People aren’t always rational when it’s their home. Real estate agents are the reality check.

Repeat the price reduction schedule until you sell the house or the listing expires. Go in with a new plan—add an agent from another company with the right reach or create a more aggressive or completely different marketing campaign—and remind your client that when the price meets the market, it will sell and someone will love their house because there’s a house for everybody, even my insane friend Rich.

I was selling a glass-walled house in the Hills built on a wide ledge of earth hanging off a hill. It had a perfectly configured infinity pool, outdoor seating, firepit, outdoor kitchen, and small perfectly square patch of grass. The place was sick, but funky. Every person I walked through liked it but wouldn’t make an offer because of its pointed entryway. It did hit a sour note, design-wise, especially among the neighboring houses. I had to have the price-drop convo a few times on this one.

After the third price drop I was taking a hard-partying client higher up the hill to see another listing, and as I passed I said, “Look there, Rich. That’s my listing, too. You sure could find that one coming home wasted.” He laughed, said he wanted to see it real quick on the way to our other showing, and I walked him through. He made an offer that day and I double-ended it. As it turns out, there’s even a perfect house for crazy Rich, but he would have never offered at the original price. No one would have. Again, it’s all part of the game.