When you aren’t getting many showings or offers on your house, your first inclination to move the needle might be to lower the price. It’s a classic move that could get you the results you want, but it’s not always the best course of action.
When you reduce your listing price, you’re not just missing out on potential profit. Dropping the price sends several messages to potential buyers and their agents. Some may think you’re desperate to sell, which could result in lowball offers. Or, it could indicate that your home simply isn’t desirable, which might deter buyers altogether.
It’s important to remember that even in a hot seller’s market, not all properties will sell quickly. If yours doesn’t seem to be getting much attention, there are a few questions you should ask yourself before you consider lowering your asking price:
1. Is It the Right Time of Year for Home Sales?
Real estate markets are largely seasonal, with more buying and selling activity happening during certain times of the year. For the most part, home sales tend to spike in the spring and summer months and are largely dormant during the winter. However, this trend will vary depending on where you live.
Talk to your real estate agent to see if the time of year has anything to do with the lack of interest in your home. It might be better to wait a few more months when the market picks up instead of dropping your price.
2. Has the House Been On the Market Long Enough?
While some homes may be on the market for less than a month before going under contract, that’s not always the case. Homes that are priced higher will have longer buying cycles, while those that are less expensive may sell more quickly.
Price aside, if your home hasn’t been on the market for more than a month or two, you shouldn’t be thinking about dropping your price. It can take several weeks or even months to find a buyer in most markets, so don’t get discouraged if your home doesn’t sell right away.
Talk to your real estate agent to find out the average time homes spend on the market in your area. If your home is above average, you may want to consider dropping the price if other options are undesirable.
3. Is the House Priced Too High?
When you listed your home, your real estate agent should have done a comparative market analysis (CMA) to set the listing price. The CMA looks at other homes in the area, what they’re selling for, comparable features, and other details. If your agent did not do a CMA or you’ve listed the home as a For Sale By Owner, your home may not be priced appropriately.
The CMA is an essential step in the process, so review it with your agent (or hire an agent to do a CMA if you’re selling the home yourself) to ensure your home is priced attractively. If it’s priced well over its appraised value or higher than nearby homes for sale, it might make sense to lower the price.
4. Will You Still Make a Reasonable Profit?
Selling a home isn’t cheap, especially if you still owe on it. When you set a listing price, you not only have to make enough to pay off your mortgage, but also pay the real estate agent commission fees, closing costs, and other expenses.
If you lower the price of your home, will you still make a profit on the home or will you be in the hole? In some cases, you may not be able to afford taking a lower price.
5. Am I Working with the Right Real Estate Agent?
You may like your real estate agent as a person, but are they the right agent for you?
The reality is that not all agents are equal. If they’re not treating you like a priority or proactively trying to find you a buyer, your agent could be the holdup.
If you’re not sure what they’re doing to find you a buyer, just ask them. They should be able to clue you into how they’re marketing your home, if they’ve had any inquiries from buyers, or any other signals that people are interested. You do have the option to break up with your real estate agent if they’re not serving your best interests, and sometimes it’s necessary to get your home sold.
What to Do Before You Drop Your Home Price
Depending on your answers to the above questions, you may find that dropping your home’s price isn’t the best option. If you want an optimal outcome, it pays to partner with an experienced real estate agent that can guide your decision.
Clever Partner Agents are full-service, top-rated real estate agents in their local markets that can help you make educated decisions on how to sell your home. Because of their local knowledge, they can provide you with data-driven insights on why your home might not be selling and explore your options on how to proceed.
Even if you do drop the price of your home, your Partner Agent can help you recoup some of the loss in profits. Our Partner Agents work for a flat-rate commission instead of the traditional 3%, which helps you keep more of your home sale in your pocket.
Are you ready to move your home from “Listed” to “Sold?” Reach out to Clever today for a no-obligation consultation and let us connect you with a local Partner Agent that can help you sell your home and save money in the process.