When is the best time for a reduction in the price of a house?
When putting your home up for sale, it’s important to set the right asking price up front. But sometimes, even if you think the list price is appropriate for your market, your home may not sell. This is when you will probably need to make a promotion to attract a buyer.
Why is my house not selling?
You have hired a qualified real estate agent who has performed a thorough comparative market analysis (CMA) to determine the value of your home. You’ve listed your home at what you both believe is an exact price and have had a lot of showings, but so far no one has made an offer.
So why hasn’t your house been sold?
“Price is usually the reason,” says Gordy Marks, management broker at RE / MAX Northwest in Kirkland, Washington. “Most of the other issues can be overlooked if your price is right.”
These other issues can include the condition of your home – whether it is in need of updating or repairing or if it is unattractive, buyers may decline to make an offer or downplay their offer – or the wrong marketing strategy. .
“If a home doesn’t have the right photos or the right marketing or isn’t positioned properly in its local market, it might not sell,” says Maria Quattrone, RE / MAX real estate agent in Philadelphia.
The local absorption rate – the rate at which available homes are sold over a period of time – can also affect your ability to sell quickly and at the best price. As a general rule, the more homes there are on the market, the faster your home will sell.
“If your home competes with more than four months of inventory, the sale may take longer,” says Dustin Fox, real estate agent at Pearson Smith Realty in Ashburn, Virginia.
Signs that your asking price is too high
If your home receives little or no traffic and no offers, it’s a red flag that it’s probably overpriced.
On the other hand, “if you get good display traffic, but all the deals are cheap, it is a sign that you are very close to market value and a smaller price adjustment may be needed”, Fox said.
Another indication that a price drop is warranted is a negative reaction from buyers.
“If buyers who come to view your home are commenting on the price, you know you’ve probably priced too high,” says Ruth Shin, Founder and CEO of PropertyNest, adding that “an easy way to tell if your the price is far from being by doing a new search for comparable homes in the same area and finding out if your price is higher, roughly equal or lower than those comparable properties. “
When to reduce the price of a house
If you do decide to lower the price of your home, experts agree that you should do so relatively quickly, ideally within two weeks of when it first goes on sale.
“You’re almost always going to get the most activity on any property in the first 21 days on the market, so you don’t want to miss that window,” according to Quattrone.
The exact time period you should wait also depends on your local housing market indicators, including the average number of days on the market for homes listed in your area. For reference, in August, existing home listings nationwide stayed on the market for an average of 22 days, according to The data of the National Association of Real Estate Agents. Your real estate agent can help you determine the best timing for your market.
For example, “we recommend a price adjustment after 10 days on the market,” says Fox. “It gives you time for two open houses on consecutive weekends. You don’t want to lower the price too late, as buyers then see your days in the market as an opportunity to save money and reduce their bids. “
Also consider persistent concerns about the coronavirus and social distancing rules could be preventing certain buyers from viewing your home or making offers. For these and other reasons, you may want to postpone the timing of your price reduction a bit.
“Do a rigorous price reassessment with your broker no later than 30 days,” Shin recommends. “You can delay a price change, but you don’t want to wait too long or your ad will become much less appealing to buyers.”
How often and by how much do I have to reduce the list price?
Some real estate agents suggest adjusting your asking price as many times as necessary to sell your home, but at strategic intervals.
“No one likes to do price cuts, but you might need to do more than one,” Quattrone warns. “As the number of days on the market increases, so does the need to adjust prices. If you don’t see any broadcasts within a week, you may need to change the price. “
Shin advises not to make more than three price cuts.
“More than three will make buyers think something is wrong with the property,” Shin says.
The amount you need to reduce from your asking price should be carefully considered. If your home was originally priced high, it might not be unreasonable to reduce it by 4-7%, Shin says.
“You probably want to cut more than 3%, minimum,” Marks acknowledges, “but I’d be careful what it takes to get the next lower price.”
Suppose your original list price was $ 423,000. If you reduced that amount by 3%, you would bring the price down to $ 410,310. However, dropping the price to just under $ 400,000 – say $ 399,950, for example – could gain more attention from home buyers, as your home will now appear in online searches for the properties listed below. of $ 400,000.
Keep in mind that if your original price was close to market value, a more gradual decline might do the trick – between 0.5% and 3%.
Overall, it’s best to determine the absolute lowest price you are willing to accept ahead of time so that you can make price adjustments if needed within that range.
At the end of the line
Pricing your home is essential. This is why you should consider working closely with a real estate agent when it comes to pricing, listing, and marketing your home. If it’s time to adjust the asking price, do so carefully and pay attention to feedback from your agent and potential buyers who visit your home to make sure you’re getting the best price.