Your home has been listed for sale for a few weeks. Now, your real estate agent is suggesting you lower the listing price, but you aren’t convinced you should. You don’t want to lower it willy-nilly, because you want to net the most money for your sale that you can. So what are the determining factors that show now is the time to commit to a price reduction?
First and foremost, you need to take into consideration the local housing market and the activity it’s been producing in your home’s price range. Recent sold data from the Multiple Listing Service (MLS) will be able to show you if homes are selling and how quickly they are leaving the market. Depending on the services the local Realtor Association subscribes to, you may even be able to see showing statistics, as well. This will allow you to adjust your expectations accordingly. For example, luxury homes will not get as many showings, nor as often, as those in the $150,000-$250,000 range. There just aren’t as many buyers. So, if you aren’t getting showings, it doesn’t necessarily mean the home is priced too high.
Second, take into account your listing’s activity since the day it was first listed. Did it get a good number of showings initially? Did buyers and agents show an interest? How many online views did it receive? If activity has been low since the beginning, it could be for a few reasons: 1) It wasn’t listed at fair market value from the beginning, 2) the presentation of the listing is poor (did you get professional photos taken?), 3) the listing’s exposure is low (has it been advertised on the big online portals like Realtor.com?), or 4) the home is in a slow price range, which you would know from the MLS data. The last issue, you can’t help too much. The first three you can fix.
If comparable homes – those with a similar location, list of features, and condition – are selling at a steady pace, but your showings have dropped off, you should consider dropping the price, because either buyers have decided the home isn’t priced according to the condition and location or a lower priced home has come on the market since you listed. If a buyer sees they can get the same thing at a lower price, they won’t bother viewing the overpriced property, but a price reduction would make the listing more competitive.
Also, if your home was getting a good number of showings at the beginning, your Realtor should have been following up the buyer agents showing your home. Consider the feedback that was received. Was there an issue consistently pointed out by buyers? This can give you a good idea if the lack of offers and showings is due to price or something else that could be fixed to net more money.
So, back to the big question…When should you lower the price of your home? When buyers show they no longer have an interest.
The longer you wait to lower the price, the longer the home will sit on the market, and the more buyers and agents will wonder if there’s something wrong with the property. It’s best to move quickly before the listing grows stale. Luckily, technology has made it easier to collect the data you need to determine the best time for a price reduction. While the decision is entirely up to you, your Realtor should be experienced enough to determine when it’s the right time to commit to a price reduction and advise you on the appropriate dollar amount to shave off. With the right strategy, you shouldn’t have to take a big hit.
