You’ve listed your house for sale and it’s been on the market for more than 30 days without an offer. when you drop your price, your house is "old news." You will never be able to recapture that flurry of initial activity you would have had with a realistic price. Your house could take longer to sell.
Once your home has fallen out of escrow or sits on the market awhile, it is harder to get a good offer. Potential buyers will think you might be getting desperate, so they will make lower offers. By overpricing your home in the beginning, you could actually end up settling for a lower price than you would have normally received.
Now is the time to analyze why, and to decide if the problem is with the pricing. Forget what you need to net out of the sale and, instead, concentrate on what the market dictates. Recent sales are your best indicator of what your house should sell for, given that the properties are similar. Also, look around the house and determine if its physical condition warrants your price and consider offering incentives, in addition to a reduction in price.
Initial Price
Was your initial asking price too high or outside reasonable expectations? Did you set the price depending on your needs and not the market? How long has your house been for sale? The longer it sits, the more devalued in the eyes of buyers it becomes. These questions must be answered before considering a knowledgeable reduction after a month, or less, of no activity. Depending on your listing price range, a reduction schedule is in order.
Understand the Market
Shift your thinking from that of a seller to a buyer’s mindset. In a market that has more homes for sale than buyers, buyers set the pricing pace. If you are serious about selling and are not just testing the waters or on an ego trip, adjust your price to suit your market.
Understand Buyers
Buyers are savvy. They use the Internet to shop for and compare prices of homes. A house that is overpriced and outside their means won’t get their attention. A house that is priced just above a round figure, $204,999 for instance, won’t make the search results when buyers look for houses priced up to $200,000. A house that isn't reduced after sitting on the market at a high price is a turn-off for buyers.
Evaluate Your House
Square footage is the main determinant of price, followed by the number of bathrooms. Analyze what you can’t change, add what you’ve put into the house to upgrade it, and compare it with others on the market. Do not overestimate the value of your expensive koi pond, or custom made draperies. They may not be of value to a buyer. Get down to basics when considering a reduction in price.
Wiggle Room
Most homes are priced to give room for negotiation, perhaps upwards of 15 percent. A house that is market-priced gets more action than one that sits on its wiggle room. Reduce the price to reflect market value, but not in small increments as this indicates you’re fishing. Give a hefty price reduction and buyers will notice.
You have a deadline
you've got to sell soon because of a job transfer or you've already purchased another home, it may be necessary to generate buyer interest by dropping your price so your home is a little lower priced than comparable homes in your area. Remember: It's not how much money you need that determines the sale price of your home, it's how much money a buyer is willing to spend.
You can't make upgrades
Maybe you're plum out of cash and don't have the funds to put fresh paint on the walls, clean the carpets, and add curb appeal. But the feedback your agent is reporting from buyers is that your home isn't as well-appointed as similarly priced homes. When your home has been on the market longer than comparable homes in better condition, it's time to accept that buyers expect to pay less for a home that doesn't show as well as others.
The competition has changed
If weeks go by with no offers, continue to check out the competition. What have comparable homes sold for and what's still on the market? What new listings have been added since you listed your home for sale? If comparable home sales or new listings show your price is too steep, consider a price reduction.
Attract Multiple Offers
Be bold in a buyers’ market and attract buyers with a price that is lower than market value. The house will be seen and multiple offers may come in because it's priced so reasonably. You may even get your original price because of a bidding war. Strategy is the key to pricing in a buyers’ market.
References
