7 Steps to Convincing Vendors to Meet the Market

This is the 52nd edition of The CRE Agents' Weekly. We aim to deliver specific and tactical advice for commercial real estate agents, brokers and leaders who are serious about accelerating their revenue with high levels of motivation.

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7 Steps to Convincing Vendors to Meet the Market

One of the most challenging yet crucial tasks a commercial real estate agent faces is advising vendors to adjust their price expectations based on market feedback.

Vendors often have emotional and financial stakes in their properties (yes, emotions aren’t just a residential market thing!), making them resistant to lowering their asking price. However, guiding them through this process can lead to more successful outcomes for both parties.

Here are 7 steps to how to master the art of advising vendors on price adjustments during an active marketing campaign.

1. Building Trust from the Outset

The foundation of any successful advisory relationship is trust. From the very first interaction, it's essential to position yourself as a knowledgeable, transparent, and reliable advisor.

Provide vendors with a comprehensive market analysis, showcasing your expertise and understanding of current market conditions. Always be honest about potential challenges and set realistic expectations.

Establishing this trust early on makes it easier to have difficult conversations later. When vendors see you as a partner rather than just a salesperson, they are more likely to heed your advice.

2. Educating Vendors on Market Dynamics

Some vendors have limited knowledge of the intricacies of the commercial real estate market – and they almost certainly know less than you do.

Therefore, it's your role to educate them on how various factors—such as economic conditions, interest rates, and local market trends—affect property values.

Use data and case studies to illustrate these points clearly; explain how buyer behaviour shifts in response to market conditions and why pricing flexibility can be a strategic advantage.

The goal is to create an informed vendor who understands the rationale behind potential price adjustments.

3. Continuous Market Feedback

Throughout the campaign, provide vendors with regular updates and detailed feedback from potential buyers. This information is invaluable in helping them understand the market’s perception of their property's value.

Share specifics about the number of inquiries, property visits, and any offers received, including the reasons given by buyers who are hesitant or uninterested.

By presenting factual, consistent feedback, you help vendors see the gap between their expectations and the market reality.

It’s important to be patient and persistent, ensuring that vendors feel informed and involved in the process.

4. Using Comparative Market Analysis

A Comparative Market Analysis (CMA) is a powerful tool to illustrate how similar properties are performing in the market.

Use CMAs from the outset to show vendors how properties comparable to theirs are priced, the length of time they remain on the market, and their final sale prices.

Highlight any recent sales where price adjustments were made, demonstrating the positive impact on sale outcomes.

This objective comparison can be a persuasive argument for price adjustment, as it grounds your advice in tangible market evidence.

5. Framing the Conversation Positively

When the time comes to discuss a price adjustment, approach the conversation with empathy and positivity.

Acknowledge the vendor's initial price expectations and explain that market feedback indicates a different pricing strategy may be more effective.

Emphasise that adjusting the price is not about undervaluing their property but about aligning with market conditions to achieve a successful sale.

Use language that focuses on opportunity and strategy rather than loss. For example, instead of saying “We need to lower the price,” you could say, “Adjusting the price could attract more qualified buyers and expedite the sale.”

6. Presenting Multiple Scenarios

Provide vendors with multiple scenarios outlining different pricing strategies and their potential outcomes. This approach empowers them to make informed decisions and feel more in control of the process.

For instance, you might present scenarios such as maintaining the current price, making a slight adjustment, or a more significant reduction, along with the expected impacts on buyer interest and time on market.

By offering options, you show respect for their decision-making process while guiding them towards the most strategic choice.

7. Reinforcing the Benefits

Reiterate the benefits of adjusting the price based on market feedback. Highlight that a well-priced property can generate more interest, reduce time on market, and potentially lead to competitive offers, ultimately achieving the best possible outcome for the vendor.

Emphasise that the goal is to position their property competitively to attract serious buyers who recognise its value, rather than allowing it to languish on the market with diminishing interest.

To sum it up

Advising vendors to adjust their price expectations is a delicate art that requires building trust, educating, providing continuous feedback, and framing conversations positively.

By using objective data, presenting multiple scenarios, and reinforcing the benefits, you can guide vendors to make informed decisions that align with market realities.

Mastering this art not only enhances your credibility as a trust commercial real estate advisor but also leads to more successful transactions and satisfied clients.

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And finally…

Be adaptable.

Embrace change and be willing to adjust your strategies. The market is always evolving, and so should you.

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About the author

Darren Krakowiak is the Founder of?CRE Success ?and the author of?The CRE Agents’ Weekly?on LinkedIn. He works closely with commercial real estate principals to accelerate growth in their business and he has a program for commercial real estate agents who want to invest in their own success. Darren is also the host of?Commercial Real Estate Leadership .