Your home isn't selling and you don't know what to do. You got it appraised. You worked with your listing agent to study the local market and set a fair price. But it's been on the market for weeks now and still no bites.
It might be time to consider a price reduction.
Reducing the original listing price doesn't have to be a death sentence.
When to Consider a Price Reduction in Real Estate
There comes a time for each home on the market that just seems like it has been there too long. While exact moment for when this threshold is reached depends on the personal needs and timeline of the seller, usually the itch begins around the 30 days with no offers mark and becomes further exacerbated when 60 days rolls around, or in a worst-case scenario, 90 days.
If a home has been on the market this long with no bites, it is possible that slightly reducing the listing price will entice more committed buyers.
However, before you leave money on the table, there are a few things you can do.
Things to Do before Considering a Price Reduction in Real Estate
There are three things that compel someone to purchase a home: location, features, and price.
Now, you obviously can't change the location of your home. So if buyers aren't biting because it's too far away from town, near a major intersection, or a sizeable distance from the train station, there is nothing you can do; however, what you can change are the other two things, and they should be addressed in that order.
Features can be divided into two categories: Wish Features and Key Features.
Wish features are things that pop up on most homebuyers' wish list. Maybe they can't live without a wraparound porch, a third bedroom, a half bath, or an office downstairs – these are usually things that either come with the house, or they don't.
But Key Features are entirely different and their inclusion should be considered before you reduce the price of your listing. A Key Feature might be something like a newly updated kitchen. Say goodbye to the 1970's wood paneling and Formica countertops in favor of a granite backsplash and stainless steel appliances.
By investing a little bit (anywhere from $1,000 to $10,000) into your home, you might be able to save yourself from a budget-breaking $50,000 to $75,000 price drop simply because buyers will have an easier time envisioning themselves in your home.
Things should always be reevaluated at the 30, 60, and (worst case) 90-day mark after the initial listing. If there are no bites after 30 days, it might be time to update the features of your home, if there are no bites after 60 days, then it might be time to partner with your listing agent and start having a conversation about toggling with the asking price.
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Questions to Ask Your Realtor Before Reducing the Listing Price
Is your listing getting traction in the Multiple Listing Service (MLS)?
A Multiple Listing Service is a database of available listings that most Realtors will have access to. Before deciding to reduce your listing price, talk to your agent to see what kind of traction your home is getting in the system and what steps you can take to increase it.
How many open houses has your realtor held?
It might seem obvious, but a low number of open houses is often directly tied to a lower number or no offers. Talk to your agent about hosting another open house, especially after you've made any upgrades to the features of your home.
How many showings have there been?
Showings are different than open houses in that they are one-on-one appointments between interested buyers and Realtors. If there haven't been many showings, it's no wonder that your property is going stale on the market. Be sure to set up a few more before reducing your listing price.
Do the marketing comments mention the home's features (especially if they've been updated)?
Has the kitchen been recently updated? Do you have a swimming pool deep enough for a diving board? Is there an apartment above the garage? Be sure that the marketing comments attached to your home's listing really highlight its unique features and aren't just generic lines like “I'm beautiful inside!”
Are the marketing photos high quality? Do they present the home in a flattering way?
Good photos of your listing are an investment that is sure to see a good return. As many potential buyers are looking at listings online before even deciding to come and see them in person, you need to make sure that your listing photos are well done. Be sure that the photos are well-lit and high resolution.
Is the signage for the home easy to see? Does it contain relevant contact information?
If you have a for sale sign on your property, ensure that it is in a location that is easy to spot from the road and that the relevant contact information (e.g., your Realtor's email and phone number) are at the forefront. Those who are interested in contacting you about the listing should not need to hunt for this information.
What kind of feedback have you received from other agents or potential buyers?
Sometimes when a home isn't selling, you only need to turn to your community to understand why. During an open house or showing, has a potential buyer made a comment about why they were turned off? Has another Realtor mentioned something you might be doing wrong? If your house isn't selling, it's worth it to consider their advice.
If, after updating your home's features, increasing the number of showings and open houses, ensuring that the listing's marketing is appealing, and discussing all other options with your listing agent, your home still is sitting stale on the market, then it really will be time to consider a price reduction.
Need someone to walk you through the price reduction process? Work with one of our top local agents! With great reviews and a flat rate price, you'll wonder why you didn't go with Clever earlier. Call us today at 1-833-2-CLEVER or fill out our online form to get started.