So when exactly should you lower your asking price? Realtor.com asked experts for their advice.
Keep tabs on-and listen to-house hunters
Are your open houses turning into a letdown? Are buyers visiting but walking away? If 35 to 40 buyers have passed through your home and not a single person has placed an offer, it’s time to really consider a price reduction. As a seller, you should be asking buyers and their brokers for feedback after private viewings. Pay close attention and see if there are any common positives or negatives in their responses, so if a current theme is “It’s a bit expensive,” then you’ll know it’s time to start a price drop.
How long has it been?
The thing that can cost you the most money is having your home stagnate on the market. So, you shouldn’t wait for the perfect suitor to come along. Perfect is a high bar. Houses set at the right price will start getting offers within the first few weeks. Are comparable houses selling left and right, but you haven’t received an offer? If so, you may want to do more than just lower the price-you might want to delist for a short while. Once you’ve been on the market for five weeks or so, you’re chasing the market. If you haven’t seen any action in a while, it might be time to take your house off the market, do some touch-ups and relist.
It’s almost impossible to underprice a home
Here’s something you should consider when debating the great price chop : The market will probably decide it for you anyway. It’s almost impossible to underprice, because the market will bring it back up. It’s actually a better move to slightly underprice your home than it is to overprice it, because you’ll have more offers to work with-and you can work the competition into a frenzy. It’s called leveraging power – if you have a motivated buyer, they will most likely be more aggressive if you have 3 offers compared to 10.
The golden rule : Know the market
Above all else, you need to consider your market. There’s no universal timeline that will tell you when to reduce your price. Consider these three points : 1. How are comparable properties faring in the market? Are they selling quickly or lingering on the market? If they’ve closed, what was their closing price? 2. What is the average time a home stays on the market in your neighborhood? If you haven’t reached that point, don’t reduce it just yet. Likewise, if you’re well past your neighborhood’s “sell by date,” it’s time to start cutting prices and maybe even delisting your home. 3. How many homes had a price reduction in your neighborhood, and how long did it take for the price cut? Did it help them sell? Again, what was the sale price?
