| Click on our Advertisement |
|
|
Homes that start off priced right for the market usually sell relatively quickly. The market, however, is continuously changing. So, a list price that might have resulted in the sale of your home several months ago might not result in a sale today.
If your home isn't selling, how long should you wait to reduce your list price? You should strongly consider a price reduction as soon as you get feedback that your home is priced too high for the market, even if your home has only been listed for short time.
A listing is usually actively shown when it's new on the market. But the showing activity can wane after a week or two. If your home received a flurry of showings and no one came forth with an offer, ask your agent to call the buyer's agents to find out why their buyers didn't make offers. If the response is that the price is too high, consider making an adjustment.
Sellers are often reluctant to change the list price soon after the property is offered for sale. But if the price is dropped quickly, this may generate an offer from one of the buyers who initially rejected your home because it was priced too high.
In a transitional market, such as we are experiencing today, selecting the right list price can be tricky. Buyers tend to be tentative about their home buying decisions. In this situation, a price reduction can spur a buyer to action.
Recently, sellers in the Oakland Hills listed their home for sale for $525,000. This price was based on recent comparable sales in the neighborhood. The real estate agents from the listing agent's office felt that the home was well priced. After a month of aggressive marketing, and good showing activity, the sellers received an offer for $475,000-significantly below what they were willing to accept. The sellers decided to lower the list price to $499,000. This created a sense of urgency for the buyer who had made the offer. She promptly increased her offer to $495,000, which the seller accepted.
FIRST-TIME TIP:
Before you lower your list price, ask your agent to provide you with information about recent listing and sales activity of homes similar to yours in your neighborhood. Is your asking price higher than the price of the comparable homes that recently sold? Are there new listings on the market that are competition for your home? How are these properties priced relative to your home? Also investigate the overall market conditions. Have interest rates or consumer confidence changed?
An effective pricing strategy is to undercut your competition. So if your neighbor is asking $539,000 for a similar home, you might consider asking $525,000. Since buyers who look at one home are likely to look at both, your home will look good in comparison.
Also consider psychological price barriers when you're considering a price reduction. Buyers will often tell their agents that they will look at homes up to a certain price and no higher. A price reduction to $399,000 or $395,000 will be more effective than a reduction to $405,000 because you'll open your home up to buyers who will only look at homes that are listed for $400,000, or less.
THE CLOSING:
A price reduction sometimes stimulates multiple offers. The seller of a Piedmont home asked $539,000 for her home-a price that was higher than her agent recommended. When the home didn't sell, the agent suggested that the price be lowered to $499,000. This attracted three offers and the home ironically ended up selling for $539,000.
|
