When Should You Lower Your Listing Price?
When is the time to lower your listing price? Nobody wants to hear about lowering prices except a buyer. In a buyer’s market or a slow period, it’s not unusual for sellers to point fingers at agents, or for agents to point fingers at sellers’ unrealistic expectations for a price. Still, there are some times when lowering your asking price is the right move.
When Should You Lower Your Listing Price?
Market Demand
Demand falls when the market is slow, and inventory is high. If that’s the case, and you don’t absolutely have to sell right now, then it may be wise to take your home off the market until things improve. You might be better off renting your house or staying put until the market rebounds if you’re not highly motivated to sell.
If you initially price your home too high, you’ll have to continually reduce the price until you hit that “magic” number. This kind of move is referred to as “chasing the market down,” and it’s not a good thing. Buyers will begin to wonder whether something is wrong with your house. They’ll also wonder how much lower will you might be willing to go, and decide to play a waiting game. This is why working with an experienced agent is so important.
Marketing Efforts
Leave your prospective buyers to look around in peace, and don’t turn down showings simply because you don’t want to get out of the house. The bottom line: Make sure you’re not unwittingly sabotaging your—and your agent’s—efforts before you take the scissors to your listing price.
If you feel that the market is right for your asking price, and you’re not doing anything to get in the way, you might want to look at your marketing efforts. Before you lower your listing price, consider whether you and your agent are making every effort to sell your home for what you think it’s worth.
Price Reduction
If you do decide to reduce your price, it’s important to be strategic about it. Pull up pending sales, and find some that had price reductions. How many days were they on the market before the price was reduced? How much of a price reduction was made? You won’t know the sold price, but you can determine average price-reduction percentages. Run side-by-side comparisons with active listings near the price point you’re considering.
You might want to take your home off the market and put it back as a new listing at a different price so that your reduction isn’t readily evident to any agents who look at your listing. An entirely new listing looks fresh and exciting to a buyer, and new buyers come into the market all the time. Not every agent studies the history of a listing, so this strategy can help you avoid the stigma of a price reduction. Work with your trusted agent, it is their job to provide you with the best service they possibly while selling your home.
For more information on pricing your home in this real estate market, contact our office.
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