Lowering the Price of your Home

We’re still in a seller’s market, but that doesn’t mean your home will sell at any price you choose. One of the mistakes many sellers make is that they overprice their home and it lingers on the market longer than expected. When that happens, buyers who may have had initial interest wait it out, knowing that the owners will eventually lower the price to stay competitive.

High demand and low supply certainly give sellers an advantage in today’s real estate market; however, buyers have become far more savvy than ever before, with access to information about any home, anywhere, any time on multiple devices.

Despite what many sellers think, a price reduction isn’t always bad news. When it happens, it reinvigorates the listing and can bring in new buyers who may have discounted the property because it was out of or at the high end of their price range.

Before lowering the price of your home, make sure that your broker or agent is effectively marketing your property. Some things to consider:

• Is your signage prominent and does it have a visible phone number and contact name?
• How many open houses have been held and what was the feedback? Is there anything that’s a quick fix that came up that you should consider?
• How many hits has the property had in MLS? Digitally, how is the property marketed? Is there a video or are the photographs best representing the property?
• Has your property been on the market for more than 60 days?
• Are you running against a clock because you need to sell?

If yes to all or several of the questions above, it may be time to consider a reduction. If you’re going that route, here’s what you need to know:

1. You only want to reduce the price of your home once, so get it right. It’s likely you have worked with a seasoned broker and priced the property appropriately; however, often sellers are attached to their property and feel the value is higher than the market will bear. If you have to do a price reduction – make sure the price is right this time. Otherwise you run the risk of having to do it again. Multiple price reductions will send a message to prospective buyers that there’s something wrong with your property.
2. If you’re not in a rush, it may be prudent to withdraw the listing and wait until a later date. MLS rules dictate when the property can be listed again after it’s removed; however, if you aren’t under any time constraints to leave, have a new home under agreement or need to move quickly for other reasons, it may be a better strategy to wait until a later date as the market may have changed. Be forewarned, though -- that this approach can have its drawbacks. You cannot sell your house if it’s not on the market. When the market is changing, it’s not always the smart decision to anticipate getting a higher sale price at a later date.
3. Research the competition. Either you or your broker can take the pulse of what other sellers are doing. How long does it take in your neighborhood before they make price adjustments? When the price is lowered, what’s the average? This information can help you make a better decision on the timing and amount of the reduction.

Two upsides to reducing your price is that a buyer jumps at it right away or, even better - price reductions have been known to start a bidding war that could potentially spike the number closer to your original ask, or if lucky, even more!

Final words? Be sure that you are comfortable with the reduction and honestly discuss with your broker before you make the move. It’s in their best interest and yours to get the deal done; but no one wants to walk away feeling bad about the sale. Effective communication will ensure that your needs are met when your property finally sells.