I use only the recent stats; what has sold, what has come on the market, what has had a price reduction ?  How many showings have there been and have there been any offers as yet?

I try to remember that this is not my home and not my decision.  I share with my Seller that the market is not supporting the price and we can't continue to chase it but instead, we need to get ahead of it!   Good luck with this David Landau 

It depends on their particular situation and motivation. It's easier to convince if they are anxious to buy a new place and must sell first or if they have a vacant rental property losing money each day it remains vacant holding out for their price.

I manage their expectations. I tell them their home is a commodity. Neither their agent or they can determine the sale price the market ultimately determines price. "The market has spoken since we've had little activity and no offers." While empathetic I tell them what they paid or how much they owe and how much they need unfortunately is irrelevant. All that matters is what today's buyer is willing to pay.

I tell them that every property goes into play and will sell at the right price. An "overpriced" listing is a frozen asset.

I tell a story about an overpriced listing with no activity until seller finally lowered price and then it received multiple bids and ended up selling for more than the original "overpriced" price. Go figure? But true.

I tell them they do not have to accept any offers but lets see the activity at new price. They are usually happy when they finally get an offer or offers.

I guide the seller to make that call on their own by providing them facts and letting them come to the solution

I always tell them that three things sell a house, price, condition and location. Since they can't change the locations there are only two things they can change.

The facts..nothing but the facts! Comparable sales and how the current pending sales are moving..have to be able to read the market and share the data!

I show the sellers the comps, review the recent market activity and comments from showings, discuss the outlook and then encourage a price improvement.

1. Are you getting traffic on the property?

2. Have they upgraded the property?

3. What are the homes in the area selling for?

4. What feedback are you getting from showing agents?

Get all that information and share it with the seller and also put toghether a list of current expenses per month.  

I set the ground work from the beginning - if we don't have showings or interest in the first 2-3 weeks, we drop the price and continue to do so untl we hit the "sweet spot" of the market.

This also help with sellers with unreasobable expectations of their asking price.

I keep in touch on a weekly basis with our Sellers, and they know the comments and results from Open Houses, how many times their house was shown, and if there were any Offers.  When it's been a matter of weeks, or a month, whatever was previously decided on has passed, with no Offers, and/or no or minimal showings, we discuss reducing the price.  The initial discussion takes place when we are signing the paperwork, at a Listing Presentation, or shortly thereafter, if they were interviewing agents.  This is critical when the Seller wants a higher price (for the reasons you mentioned or others), and they are shown the comparables which at that time, they are not willing to accept.  It's a matter of 'knowing they want or need to move on - either for another job, for health reasons, need to down or up size, etc. - and us working with them as a team and reminding them of their original plan, and helping them to achieve their goal, hence lowering the Asking Price.  Might be by $5K or $10, depending on what is 'not happening' with their house.  We as LA in those cases, have to have A Plan!  Now if they are able and motivated to (but just wanted to 'wait and see' what happened!), now they may decide to either do work at their house - or - lower the price.  In our niche, it's older folks, so it's lowering the price, because everything is original, and where does one start . . . 

Conrad Allen is totally right. I have some of those dreamers and I stick with them but one of these days I am going to weed out people who won't listen to reason,

IF you took it on the high side to start with...good luck with that .  IF the market changed...or said "no" the price that's another issue. Some people write it in the listing contract that there will be periodic...ie every 30 days....the pricing will be reviewed...logic doesn't usually prevail. The longer the property is at the price the market has rejected, the lower it will be when it does sell.

It all comes down to the cold hard facts...numbers don't lie on what the comparable sales have closed for.

Market stats and feedback from people who've seen the house.  Those tend to be the best tools.

"If you were a qualified buyer . . . what would YOU be willing to pay for your house?"

Some can not be convinced.

Then his script is better than yours as my coach told me one time!  You can show him the comps and ask him which one he would buy and then see where he would put his into the mix

I too like what Susan Emo said.

A lot of comps.

And often an expired listing.

I beg.  If that doesn't work, I give them a comps update.

For some sellers, this will never work, no matter how persuasive or logical you are. We live in a nation where everyone over fifty-five is dreaming about a return to the "good old days", whatever that means. Living in the past is a poor recipe for accepting the present.

You have a lot of really good answers here, and I am not sure I can add any ground breaking concepts but sometimes reminding them about their carrying costs per month makes it more tangable. I tell them "staying listed for 3 more months will cost you $XXXX.00.  That seems to hit home pretty good.

I tell them going in that for every ten showings we should have at least one offer or the price is too high.

Also, maybe a Broker Open would help where you could get a group of agents who tell them the price is too high?

     Either drop the price, or be very very patient and hope that inventory dries up.

The showing feedback and showing activities, as well as recent solds for similar homes would offer the best clues why the property is not selling. Then determine if the price needs adjustment. However, in the Toronto market where bidding wars are everywhere and sells within a week, there are occasionally homes that don't get offers in the first week even with an underlist price.  I saw one recently underlisted at $899k with a 1 week holdback on offer date,  didn't get offers, then raised the asking price to $1.2m, and sold for $1.125m 2 weeks after.

I would recommend getting an official appraisal and suggest you list the home at the appraised value.  You might even offer to reimburse them the cost of the appraisal at closing.  This will give them incentive to stay with you instead of listing (at a lower price) with another agent.  

Show them news paper clipping that home prices have dropped. They got to go with the market flow.  Also request an appraisal-3rd party confirmation not to support listed price,

You have to have a reasonable seller that is willing to listen to your expert advice.    When you show prices declining, or other homes going UC before theirs should show them they are overpriced.   The longer on the market, the lower price they will see.

Using Absorption Rate & DOM to say - We've given it a good try , but it now appears there's NOTHING LEFT to prove at this Price Point !"  "THe buyers have voted thru their DISINTEREST !"

Showing the facts but that doesn't always do it

Bombard them with information about what's happening in the local market.  Especially sales in the neighborhood, new listings, etc.  When they see other homes sell, but at lower prices, they will get it.

That was only an issue for me once when our market was beginning the crash. Offers were coming in seller would not accept ... I canceled the listing. 

David,

#1 I deal with it before I ever take the listing including minimum drops of $5,000 to $10,000 depending on the price of the house.

# 2 Two or three weekends, if not enough showing traffic, the price needs to drop.

# 3 Show them the houses going under contract. Are they better prepared for sale and / or better priced?

Lots of good comps with photo's and maybe take him to some of the other homes on the market.

If other homes are selling in the neighborhood I suggest that your home is helping them sell if it is listed to high.

your home is providing a great service for other homes on the market....people buy on comparison, and after they see what that dollar amount gets them at your house, the next home they see that is priced properly will be the one they buy....

We have "the discussion" in advance of signing the listing documents.  "You do realize that if there are no showings and no offers in the first two weeks - you will need to lower your price?"  If not - NEXT!

Share the facts.

Simple math works every time. If you hold out for months to possibly get more money versus getting a tiny less right now, a bird in the hand is worth more than two in the bush every time. You lose having the big $ for a chance of gaining the little $ ...???  If it costs money to get more money, its a wash!

Days on market, feed back for showings, and a new CMA.

If they can't face the facts ask "What part of NO don't you understand?"!

Show them the comps, and DOM statistics

By monitoring the comps, and keeping them informed on what's going under contract with similar properties to theirs.

It's a combination of facts and asking questions -- it will depend on the seller, the property and the agent.   Motivation matters.  

You can't make them lower a price obviously. All you can do is present facts as to why they should do so.

I find them the house they want to buy.

Economics delivers the message.

I never, ever, ask a seller to "Lower the Price."

However, we do stick to the game plan.

I show them the comps and why. When they do not understand or want to listen, i take them to other homes to show the difference in prices and values

David Landau - well, it's all about motivation and standard scripts...

With great difficulty...  Seriously, though, there is no "magic bullet" as far as any specific phrases you can use. The method really depends on your personal style and your customer's learning style. Some people relate best to being shown a current CMA of their area, others prefer to see a market report, some need to see both. Put all the facts together then have "the talk" with them. Good luck!

If there is no activity it should be obvious. You need to ask them: Do you want to stay? Or, Do you want to go? Right now you are at a stay here price? I Also like to say we need to be here $XX to make the window for showings. $XX will make the window for our potential Buyer to see your property.

I keep the seller informed of what's going on in theri area.   Recently my seller wanted to wait for an offer then go from there!  

Show them what the market value is of their house. A house is only worth what the market stipulates. I would also show the inactivity of showing slows down after 2 weeks, then drops drastically after a month if there are no price adjustments.