All sellers want top dollar for their home. But unfortunately, sometimes the price you want is not always the price you get. If the home is listed for an extended period of time, chances are you're asking yourself, when should I reduce the price and by how much?
There's not always a cut and dry answer for this is it depends on the market, the neighborhood, the price you started at, and the projected market value. Your real estate agent should have given you a good idea as to what price the home should start at. If you chose to listen to your real estate agent and the home still hasn't sold, it may be time to go back to the drawing board. If you've chosen to not listen to your agent and overprice the home, it might be time to swallow your pride and listen to what they have to say. Many sellers will make the mistake of hiring a real estate agent based on the price they can sell the home for, rather than the experience that the agent has.
There are several things you can do before reducing the price.
- Have you staged the home?
- Have you cleaned the home?
- Have you promoted great photos of the property?
- Is the property posted on prominent websites?
- Does a home have a video tour?
- Is the home listed on the MLS?
- Are you flexible with showings?
- Is the home highly visible?
If the answers to all of these questions are yes, then it might be time to reduce the price.
You have to determine how motivated you are to sell. Check out your bottom line. This is how much you need to sell your home for. Do you have a mortgage or second mortgage to pay off? Will this cover commission? Will you be underwater? Can you even sell the home for a higher price than what you owe on it? Your real estate agent should be able to help you with all of these answers. There should be a bottom line number, which is your lowest possible price you could go. How close to get to that price will be determined on the market value and comparable properties.
Are there similar homes in the area that have sold for less or more? Really do your research about why they may have sold or not sold and their price compared your own home. Typically, if you price the home lower than your closest competition, your home is the one to sell.
How many times should you reduce the price?
A lot of homeowners think that they can price their home high and if it doesn't sell they will simply reduce the price. The problem with this is that the longer the home sits on the market, the more skittish buyers become of the property. The property takes on a stigma that there something wrong with it even though it was just overpriced to begin with. Pricing it correctly from the beginning is the best way to get the home sold quickly. But, what if you have to reduce the price? Reducing the price is a delicate matter and it should only be done once. So, you and your real estate agent need to determine what that price will be. You have to think through all scenarios; will somebody offer if I have reduced the price? Do I have more wiggle room to go lower if I get an offer that is lower than the asking price?
Why would I lower the price of the home?
There are several reasons, one of which is it's just not selling. But there may be other reasons such as you are running out of time and you are motivated to get the home sold quickly so that you can either move on with the next phase of your life or save money. The home may also need extra repairs or improvements. This means you just can't sell it for the same price as a home but doesn't need as many repairs.
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Or, the market may be changing.
The market can really determine whether or not a home sells for top dollar as well. If things are changing in your micro market, it's important to pay close attention to these changes so that you can adjust or price accordingly from the beginning.
There are reasons to reduce your price but it must be done methodically and with a lot of research. Your real estate agent should be able to answer these questions and help to provide the right details for you to make an informed decision.
Ready to list your home? Give us a call today so that we can help you make the right decision.