The Elephant in the Room: Five Tips for Working with Unrealistic Sellers

That headline from the RISMEDIA Weekly Business Builder online recently caught my attention since we all have had our trials with that kind of Seller! Here are the first two Tips from the article:

There’s nothing more frustrating as an agent than putting a lot of time, research and effort into a listing, only to have the seller insist on overpricing the home.

Before you can get a seller to agree to a realistic selling price, you have to understand why they insist on overpricing their home in the first place. Try to see this process of selling their home, their largest financial asset, as they do. To do this, you need to establish trust and confidence, set good boundaries, understand their fears, and show them the reality of the market. Here are five tips to help you handle the “elephant in the room” and work through these tricky situations.

1. Understand where they’re coming from
Selling a house is easy. Selling a home is hard. Homes are where memories are made, where families grew up, and where emotional, difficult, irreplaceably precious things happen. Sellers who overprice their homes are usually including the emotional value of the property to the appraised, physical value. When you understand this, you can begin to separate the emotional value from the physical value and help your clients do the same.

Begin by asking them what they think their home is worth before you share your valuation of it. Don’t react to their response, but do ask them how they arrived at this price. Did they get an appraisal? From whom? Can they show you the appraisal in writing? Be curious, not defensive, about their process. The more you understand how they arrived at this value, the easier it will be to counter their findings. It’s always better to ask them to explain their process than to counter it with reasons why it’s not realistic or appropriate. Asking the right questions will help them come to this realization faster.

Once they’ve shared their price, they’ll want to know what you think the house is worth. This is the time to show them your process — when they’re asking for your numbers.” Gary Wise of Goodlife Realty in Austin Texas gave the advice, “Never tell a seller ‘this is what your home is worth.’  Instead, say something like ‘The Market is willing to accept $280,000 for your home given all of this data.’” You can then supply your clients with your customized CMA report that shows how you’ve factored the value of their home. The key is to show the seller that you have all the data and not just an internet guess at what their home is worth.

2. Have the difficult financial conversation
Sellers are often ashamed or embarrassed to admit they need the money from a higher-priced valuation sale. It’s easier, in their minds, to ask for $10,000 more from the sale of the house than to raise that some other way. Maybe they lost an income, got laid off or are having financial difficulties they simply don’t want to share with you. Maybe they owe more on the home than it’s worth. This “elephant in the room,” is what is keeping you from convincing them to lower their price. They believe they need a certain amount to make it worth their while to sell their most feasible chance at financial rescue.

Have they recently sold or traded cars or other big-ticket items, claiming they’re downsizing? Do they talk about getting a condo or a “smaller home” after selling this one? If so, finances, not reality, may be the issue here. If they are experiencing financial difficulties, address the problem head on. Say, “You know, some of my clients set a high price on their homes, hoping to pay off other bills. It’s a great strategy when the housing market is different. However, it can backfire and leave the house unsold, maybe even ending up in foreclosure. I don’t know what your financial situation is, but I see this often, so I need to ask you so we can strategize.”

Wow, what a couple of great strategies to keep in mind! Next week, we’ll cover the RISMEDIA article’s last three tips for dealing with those unreasonable Sellers.

David M. Hassler

VP, Professional Development