Trying to sell your home? How can you tell when it’s really time for a price reduction? Here are 5 signals that you may need to lower the list price of your home:
1. More than one listing agent told you to list it lower. Hopefully, you interviewed more than one agent to get their marketing plans and marketing analyses before you listed your property. Their list price recommendations are just that: recommendations. As the homeowner and seller, the ultimate list price is your decision, and many a seller lists their home at a price higher than their agent recommended.
If one agent recommended that you list your home significantly lower than you did, but the consensus was closer to the list price, that’s one thing. That agent’s data could have been off, or the list price recommendation could have been more of a strategy than an opinion of value. (Some agents recommend sellers list lower than market value to generate multiple offers.)
But it’s an entirely different animal if multiple agents told you to list it at $325,000 and you put a tag of $400,000 on it. If that’s the case, and your home isn’t moving a price reduction is in order.
2. Buyers’ Brokers feedback says so. Used to be that broker’s open houses were thought of as a sales tool to expose the property to the people who matter. (Consider: over 80% of qualified homebuyers already have an agent!)
However, broker’s open houses can also provide very valuable pricing feedback. You’d better believe that if the buyers’ brokers who show up tell you or your agent that the place is overpriced, they’ll be telling their buyers that, too!
Also, your listing agent can – and should, if your home isn’t selling – contact the agents who have shown your home to their clients, but failed to make offers, to see what the buyers and their brokers thought about your home. If the price was an issue, they’ll tell you so. LISTEN.
3. Your home is not being shown at all. If you’re comfortable that your home is being marketed well, on your local multiple listing service (MLS) and other real estate sites, but no one is coming to see it – that’s a sign your home may be significantly overpriced. Remember, buyers search for homes online primarily by minimum bedrooms, minimum bathrooms and maximum price.
4. Your home has been on the market way longer than average. Your agent has access to a number insiders call: DOM – the average number of Days On the Market for homes like yours, in your neighborhood, before they go into contract. If your local DOM for a home like yours is 30 days, and your home has been on the market 60 days, with no bites – it’s time to slash the list price, maybe significantly.
5. You’ve received multiple offers – all lowballs. Have you received more than one offer for your home, but the prices offered were way below your list price? If so, that’s a telltale sign that you need to lower your price. Buyers are finding your home to be compelling, but the market just won’t bear the price you’re asking.
This is actually one of the best signs you can get: it means that if you do drop the price, your chances of selling are very high. If all your lowball offers came in at around the same price point, the market is telling you that’s probably the right price for your home, although you can maybe create a bidding war and get a little bit more, if you’ve had multiple buyers make offers in the same price range.
Still hesitant to slash your home’s price?
Some sellers think a price cut is the worst thing that could ever happen in the course of selling their home, because it feels like they are losing money. In fact, the dollars cut were never real in the first place. And here’s a reality check: a price cut can actually be the best thing that could happen, because it can attract new buyers’ attention to your home, and get your home sold!