Hey guys, price drops have hit an 18-month high. Here are three stats you need to know:

1. In May, 6.4% of home sellers dropped their home prices. In the last week of May, home prices actually came down by $3,000.
2. This is the first time home prices have declined in the last six months.
3. Homes are also staying on the market longer, now averaging 46 days. We are seeing more stagnation with listings.

When analyzing the market, we consider supply versus demand. We still have very low supply, but demand is decreasing due to high interest rates and record-high home prices. This combination makes affordability tough for many home buyers.

When discussing this with sellers, it's important to explain that a market can have pricing power or pricing pressure. For years, sellers had pricing power due to low supply and high demand. Now, with demand dropping, pricing pressure is entering the market.

The best time for a price adjustment might be surprising—it's at the listing appointment. At...

Last month, 32% of all transactions closed involved a cash buyer. If you stack up a cash buyer against a finance buyer, as a seller, which one would you prefer? Probably a cash buyer.

Financing has hurdles: the buyer has to qualify, the home has to qualify, there's appraisal and underwriting approval. So, if I had the choice, I would probably want to take a cash buyer.

But how do we incentivize this?

Most agents aren't having this conversation with sellers. Would you like to incentivize cash buyers to make offers on your house? Why? Because with a cash buyer, you're not dealing with qualification issues, low appraisals, or underwriting roadblocks. We can remove contingencies faster with a cash offer, which means we can speed up closing generally faster than with a finance buyer.

To incentivize those offers, you might consider giving a cash discount. What would you give? Maybe a 1% or 2% discount off the price. Let's be honest, with a financed offer, the buyer often asks for closing...

I have a great idea for my fellow real estate agents out there.

It's called the Buyer's Eyes Strategy. Here's how it works:

When I have a client selling their house, I treat them as if they are a buyer in the market for a home in their price range. I put them in the MLS as if they are a real buyer, and they start receiving emails with new listings, price changes, and updates on pending or sold houses. This helps them stay informed, in real time, without having to wait for me to tell them what's going on.

I also get CC'd on the same emails, so I'm seeing what they're seeing. This allows us to have a productive conversation and make any necessary adjustments or changes to their selling strategy.

They start receiving these emails right away, and they'll get updates every day or every couple of days. This way, they become really familiar with the market and can make informed decisions about their own...

Use this script to have the "Red Flags" conversation with sellers before you list their house, so they value you as an agent (and don't shift the blame onto you):

"As your real estate agent, I want to discuss a crucial conversation with you, Mr. and Mrs. Seller. When we list your house, one of two things can happen. Either A) we have showings, which means the market is accepting our price. People are viewing the property, and this indicates they believe the price is fair.

Or B) we have very few or no showings, it could be an indication that the price is too high. If that's the case, I'll come to you immediately, and we'll have to make a quick adjustment. We don't want to be one of those listings that sit on the market without any action.

But there's also something else that can happen, a second red flag, other than price: We can have a lot of showings, but no one pulls the trigger and makes an...

What is an anchor point? And how can it benefit you when you're talking to sellers about getting their prices down?

Well, an anchor point is a way that we can help sellers recognize where they're at relative to the competition of the market. And what's gonna happen to them if they don't take action.

So let me give you an example:

If you have a seller in a neighborhood and you call them and you say:

"Hey, Mr. And Mrs. Johnson, I was hoping I'd have a conversation with you because I did a little research in the neighborhood, and I know we haven't had the activity that I've been hoping for. And so I'm concerned about getting the house sold. So I did some research. I know, you know, the property over on fourth street. It's been sitting in the market for a hundred days. I know you'd drive by it every day.

"And I did a little research on that one. It looks like they started at $600k and now they're down to $550k,...

How do you normalize a price reduction?

People don't wanna feel like they're the only ones reducing their price. And some sellers may not be in tune with the market like we are. They may be assuming that the market's like it was six months ago. And they're the only person that's not selling right now.

Of course, we know that's not true. We know the market's changing. We know there's more inventory hitting the market than we've seen in a long time. We know interest rates are impacting the marketplace.

So how do we normalize a price reduction?

The way you do it is to show others in your market that are also reducing their price at the same time. So here's how you do it.

When you're talking to a seller, you can say:

"Hey, Mr. And Mrs. Seller, you know, we haven't had a lot of showings and that's probably directly to related to our price. We're seeing more competition. Interest rates are definitely...

Hey guys, now that the market's becoming more competitive, one idea to help your sellers be more competitive is to use the "Buyer Eye Strategy."

What's the "Buyer Eye Strategy?"

When you're sitting with the seller and you've just listed to the property, you might say something like this:

"Hey, Mr. And Mrs. Seller, now that we got the property listed, here's what I'm gonna do when I get back to my office. I'm going to treat you guys as if you were a buyer for a property that's very similar to yours. So here's why I'm doing that:

"I'm gonna set you up an MLS on a search pattern that's gonna include your house, but also any other houses that are listed that are similar. This way, you're gonna see everything in real time, every single listing that's happening. Every price reduction, every pending, every closing that's occurring in your price category. And this will really tune you into the market.

"And if you decide, Hey, look at this as a new...

One thing we should all be aware of right now is that a lot of home sellers are reevaluating their price.

And one thing you should be monitoring in your own market area is the number of price adjustments that are occurring every 24 hours. Maybe on your hot sheet, your MLS data sheet, it's gonna show that number. Keep it a close eye on that, and then think about it with your own sellers.

Here's something that's interesting:

In the last few weeks we've seen 3.5% of all the sellers in America reduced their price.

Now that doesn't sound like a lot. But remember, we're coming off one of the hottest real estate streaks we've ever seen in our market.

But the market's starting to cool when it comes to pricing and people are starting to adjust to get ahead of the market. Typically we don't see price adjustments begin to happen at this level until July or August.

So why are sellers starting to adjust prices much, much earlier than ever before?...

Are you doing a weekly call to all your sellers? If you haven't started doing this, this is something you need to be doing. And as you take new listings, you need to just create this expectation that you're going to call them every week.

My preference is on Monday. I want to get the week started off right. And having my Monday morning power hour, where I call sellers, is super important in my business plan.

So why do we make calls to our sellers every Monday?

Because we need to earn the right to be able to ask for price adjustments, condition improvements, or incentives if they're needed in order to get the property sold.

The market's changing and not every single listing you bring to the market is going to sell instantaneously anymore. Often we're going to have to make some adjustments in the condition, price, or incentives we're offering.

Here's how you handle that conversation with the seller:

I'm going to start by saying, "Hey,...

As we begin to price property, it's important to understand the difference between comp-based pricing and competitive-based pricing.

Comp-based pricing is what REALTORS typically do when they do a CMA, they do a comp based pricing analysis. What they do is they look at properties that have sold three to six months ago, very similar to what an appraiser does. And normally in a typical market, that's very effective. But we're not in a typical market.

When you're doing that today, you could have an inherent flaw in your data. And here's what it is:

Back in April and May, all indications point to the fact that we probably hit our apex point of the market. Meaning that home sales were indicating at 23-26% appreciation rate compared to the year before. So that was the peak acceleration of our markets.

Since then, we've been moderating. And what that means is that people aren't getting 23-26% compared to a year ago. Now it's down to about...