How to avoid that 'awkward' price reduction conversation 

With the latest housing market data indicating that a fall revival is growing less likely, many agents are navigating difficult conversations with sellers about listing prices.

While home prices have remained high across the U.S., about 1 in 5 homes had their list price slashed in September, according to Realtor.com data. But there are ways for agents to prepare clients for this possibility without it coming as a shock.

"Setting expectations and being very clear are crucial components, especially if you're trying to build a referral-based business," said Realty of America Founding Partner Mauricio Perez-Vazquez during a September panel at NAHREP at AVANCE Global. As Perez-Vazquez and his fellow panelists explained, outlining pricing strategies early and clearly goes a long way in building trust and managing client expectations.

Having the tough conversation: Some sellers have "unrealistic" notions about their home's worth, noted Sully Cadengo, a broker with Coldwell Banker Realty. If they want to price high, it may be necessary for them to step into the shoes of a prospective buyer and consider whether they'd be willing to pay that price.

"When you're selling, all you think is, 'How can I net the most money?' But you're not really putting yourself on the other side of the table," agreed Thalina Garcia, an agent with Nan and Company Properties.

Set the stage up front: In a slow market, it can help to introduce the idea of a price reduction before it becomes necessary. Marco Sanchez, founder of The Sanchez Team with Realty of America, said his team embraces an automatic price reduction strategy.

"If it doesn't sell in 10 days, we'll come down $10,000. Doesn't sell in 30 days, we'll come down another $10,000," Sanchez explained. "And then you don't have to have that awkward conversation with the client."

For sellers, it's "always a lot easier to agree to any kind of a money loss or price reduction" before they're feeling frustrated, Perez-Vazquez echoed. "Having those difficult conversations up front is going to save you a lot of heartache. And you're showing them that you're preparing — that you have a plan and that you're not just waiting."

Study your market: Making data-driven recommendations based on how many homes are listed in your market and how long it's taking them to sell also helps build client trust. "Know your city," Cadengo urged. "Like in any sales position, you need to know your product."

Understanding local market conditions "helps a lot in setting expectations," Garcia agreed. With the market increasingly tilting in buyers' favor, considering their perspective can be valuable in mapping out a strategy, she added.

Don't overpromise: Underdelivering can kill a deal, warned Garcia, and that kind of mistake can have lasting repercussions for an agent building a referral-based business.

"Taking a listing overpriced when you don't mention to them it's overpriced — that is horrible," Garcia said. "Telling them that you can sell it faster than what you know the market is selling for is horrible too."