You have now hired a realtor and determined a price for the home. No one is listening. Why? Either your home is priced too high (read, too expensive to be comparable in value in market value) and/or you haven’t done a great job marketing it. It may be time for a home to be reduced in price if the former.
Pricing errors can cause long-lasting problems. It is less likely that a home will be offered if its initial price is too high. The home will remain on the market for as long as possible. Buyers will likely find fault with it. It would be more likely to have sold by now if it was so beautiful. It is a rule of thumb that the longer a property remains on the market, the harder it will be for the seller to offer the original asking price.
To stop your home from getting old, you may have to lower its price (read: put it on the market for several more months). While a price drop may not be the best option for every home, it might be necessary to sell.
These are 10 questions you should ask before you lower the home’s listing price. These questions and other considerations will help you decide if you want to lower your home’s price.
10 questions you should ask before you list your home
How many years have you owned your home?
Start by determining how long the house has been on the market. It will take longer for your house to be on the market, so it is more difficult to lower its price.
It might be worth considering a price reduction if your house is on the market for longer than one month without any showings or offers. It is worth considering lowering the price if you do not receive an offer within three months.
What have you done to promote your home?
Did the property get properly marketed by the sellers? Perhaps the photos on the MLS listing aren’t enough. Perhaps buyers don’t see the potential because of the clutter and excessive belongings. To make the home more attractive, the seller should clear out clutter.
To successfully market a property, open houses and showings will be key. A Realtor should make sure that the property is listed on multiple real estate websites and not just the MLS.
Have you held many open houses and/or showings, but not received any offers?
Your home is empty since the last open houses. If the house is attractive to many people, but there aren’t any offers, it may be too costly.
Although buyers may be initially attracted to your property, they will likely look elsewhere for a better deal.
Do others tell you that the price of a home is too high?
Are you getting any feedback from neighbors, friends and Realtors about the house’s value? It might be time for you to listen to all the chatter if the house is up for a while and there are no offers. If your Realtor tells you that the house is too costly, listen to them.
Are the photos being changed to better ones?
You have now listed the property and it has been on the market for several months. You may be convinced that the problem is not in the price. Take a look at the descriptions and photos of your home. Maybe it is time to make some improvements. You can make your home look better and update the description. This will make your property more attractive to potential buyers.
Do your inventories meet the requirements?
Is there a six-house sale on your street already? Are there too many houses for sale in your area? How about the whole local housing market? It is a buyer’s marketplace if there are more sellers than buyers (read supply).
Because of the low demand, home prices in buyers’ markets tend to be lower. The lack of demand means that the home prices are often lower in order to sell quickly in buyer’s market.
The house was appraised at close to its asking price?
Can a contract with a buyer be canceled because the property wasn’t properly appraised? If your listing price was lower than its appraised value, you can reduce the price.
A mortgage buyer buying a home might not be able to make up the difference between the appraised value (which is the amount a bank would lend the buyer) and the agreed price. If the appraised valuation (which is how much a bank would lend to the buyer) is lower than the agreed price, it may be impossible to sell the home.
How slow is the local housing market at the moment?
Is the housing market in your area deemed “hot”? Are buyers constantly buying real estate? Are houses selling like hot cakes? If the answer is yes to both of these questions, then it is likely that the local housing market doesn’t slow down. In this case, you might want to keep your listing price. If the market is slowing down, you might consider lowering your price.
Are similar properties in your area priced below your listing?
Have a look around the neighborhood. Is your neighbor’s “For Sale” home priced higher than yours? Are their square footage and features comparable? If your local comps are more expensive per square footage, consider lowering your home’s price. If comparable properties in your neighborhood are less expensive per square footage, you should lower the price of your house.
Your prices have been cut?
Are you certain that you have ever reduced the price of a product at least once? If the answer is yes, then you might be in serious trouble. The home’s price will fall more frequently, which means that buyers will be more inclined to believe there is something wrong.
Experts recommend that you reduce the price of a home only once. It is important that you get the first listing price. After at least one month, consider lowering the home’s price. Make sure the price drops are significant enough to attract potential buyers.
A home that is correctly priced will most likely sell. It will remain on the market for a long time if it isn’t priced correctly.