Home Selling in 20121>Question Details

M. Lyons, Both Buyer and Seller in 20121

When should I lower my list price?

Asked by M. Lyons, 20121 Thu Oct 28, 2010

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If your home is not selling then typically it is a function of list price. Price cures all ills. IF you are confident in the marketing your realtor has done on your behalf and feel that you have had adequate exposure and you do not have an offer in hand then typically moving to the nexy pricing point is a way to get more showings. At this time of year pricing is typically lower as those more motivated sellers drop their pricing to enhance their chances of selling before the holidays. If you do not absolutely have to sell and can wait until spring then you may see pricing bump up a little bit as sellers tend to be more optimistic with the spring market in front of them. In Centreville we are seeing inventory inventory increase and the number of contracts drop off. I think this is purely consumer confidence and that can change quickly. More than likely this will not happen until after the elcetions and the holidays. Lastly, your realtor should be giving you feedback on the showings that you have. If you do not have showings then price is the issue except in the higher end of the market. If you have showings then you should have feedback and if the problem is not something you can change then price is the solution.
Web Reference: http://www.seln4u.com
1 vote Thank Flag Link Thu Oct 28, 2010
Dear M. Lyons:

Most realtors in Brooklyn NY recommend to their clients to implement a price improvement (reduction) every 30-45 days. This is true if there have been no offers and indications of interest is light.

A homeowner should ensure that his/her realtor is utilizing an effective marketing plan with adequate Internet advetising, print ads, open houses, postcards etc.before lowering the price.

Best regards,

Bonnie Chernin and Dave Rogoff
Fillmore Real Estate Br#19
2926 Avenue J
Brooklyn, NY 11210
917-593-4068 (David Mobile)
646-318-5031 (Bonnie Mobile)
davidrogoff@fillmore.com
0 votes Thank Flag Link Wed Nov 17, 2010
MLyons

Almost everyone that buy a property utilizes the services of a licensed appraiser to get an opinion of market value. However on the flip side almost nost hire an appraiser to get an opinion of value when selling. Typically because the price. Subsequently the Listing Agent will do a CMA (Cross Market Analysis) which is not typicaly an unbiased opinion of value. Why can I say that? Because I am a Licensed Appraiser and a Realtor.

Talk you your realtor and maybe get an appraisal before adjsuting sales prices.

William Hernandez
Realtor/Licensed Appraiser
HRESInc@hotmail.com
703 608-5239
0 votes Thank Flag Link Wed Nov 17, 2010
Hi M. Lyons,

As you can see, you have as many opinions as folks that have answered. It is a tough question, and I am not sure there really is a right or wrong answer, at least until the home has sold. Price competitively, make sure the home is in the best shape possible, both cosmetically and structurally, and hope for the best.
I hope your home sells fast and the closing goes smoothly.
Jim Ryan, Home Savings of America, 703 591 5626 ext 419.
0 votes Thank Flag Link Fri Oct 29, 2010
M Lyons: If you wait too long and then you agent puts in the discription, "Price Reduced", it will appear you are really desperate. Sellers who price their homes way above 'Markey Value", are in for a bumpy ride. If you do reduce it do it with quiet style and NO MAJOR HEADLINES. Good Luck!

~~~~~
Web Reference: http://www.soreal.biz
0 votes Thank Flag Link Thu Oct 28, 2010
Depends--how long have you been on the market, how many showings and what kind of feedback have you received, etc., --if you have been listed on market for awhile, your marketing is maximizing your exposure, received no offers, etc., a price adjustment may be in order.
0 votes Thank Flag Link Thu Oct 28, 2010
M,

My suggestion to you is that BEFORE you lower the price do make sure that you have done all the cosmetic improvements - which often can be done inexpensively.

A coat of fresh paint - in colors agreeable to most of the buyers - sparkling windows and baths, pleasing window treatments, decluttering and opening up the space, a new carpet if necessary, polishing the floors, improving the curb appeal can do wonders for any home.

To sell in this market - any market - your home must win the beauty contest and the price war.
If a home cannot win the beauty contest, it needs to be priced accordingly.

Perhaps your home is ready for the royal visit and the most discerning buyer. Perhaps your home has the wow factor.

When should you lower the price?
When you have buyers previewing your home, but NO offers coming - buyers are sending a message that 1) home is overpriced, not enough value for the $$$, 2) home did not meet their criteria.

Your agent is the best person to advice you - communicate with your agent.
0 votes Thank Flag Link Thu Oct 28, 2010
I agree in part with my colleagues below. The real answer is not simply in "comps" that are sold...it is also in comparable offerings and pricing against them. Unfortunately for many..they simply do their comps from their desk. This is good in part...but not viewing the offerings is a huge mistake. I like to do what I call high low and parallell...meaning I will view similar offerings that may meet my "desk top" price..then go 5% or so around that number and location and view those offerings. This will give me my "field price". Important as well is absorption rate..which many agents either do not calculate or don't know how to calculate. This statistic will tell you how long it would take to "absorb" the existing inventory.

This combination in conjunction with an objective seller is key in pricing. As for "feedback" from other agents it can be good but not always reliable. Some agents use "broker's open's" as well. This can also be effective but many times it is simply a crutch to help deal with a seller when your pricing was off to begin with.

Pricing up front is most important and is time consuming. Most properties if accurately priced initially should require no reductions. This can of course be difficult with unique offerings.

Lauren is absolutely correct in that you cannot price too low. The market will push the value up and sometimes over value. One expansion on that thought though is timing is everything. You don't want to employ this aggressive strategy on holiday weekends etc. when a great segment of the buyer pool could be on travel.

Best of luck to you and I hope you find the info. helpful.

Kind Regards,

Erik J. Weisskopf, ABR,CDPE,CRS,GRI
(C) 703.216.1222
Erik@AskMeAboutHomes.com
0 votes Thank Flag Link Thu Oct 28, 2010
There is no general answer to this question. Here are some ideas for use as guides to decision making.

First, have your agent do a CMA every two weeks that shows, in detail, with lots of pictures, what's happening in your area, including withdrawals and expired listings. Pay attention to the lot and its pluses and minuses here. Second, go to open houses in your area to see what others have done to their homes. Third, consider hiring a staging consultant ( ask your agent about this ). Fourth, be aware that this is a buyer's market and buyers want either updates and either neutral or ( in some markets ) trendy colors, or a big reduction in price.

Finally, please be aware that, in real estate as in the rest of life, timing is everything. We are entering the time of year when the number of buyers diminishes, and those remaining are serious bargain hunters. Consider a listing withdrawal for a while with a view to, maybe, doing some inexpensive staging and putting your home back on the market on Presidents Day.
0 votes Thank Flag Link Thu Oct 28, 2010
If you are not getting any or enough showings, or buyers are choosing other homes over yours, then the market is saying you should lower the price. Your agent should be able to help you interpret what the market is saying about your home, go over feedback from showings, and guide you as to when to lower the price and by how much. Don't be afraid to lower the price as many sellers seem to be. Good luck with your home sale.
0 votes Thank Flag Link Thu Oct 28, 2010
M.,

The comps are a great start as Scott suggested...However, if you have been on the market for longer than 3 weeks there are a few scenarios...
1. You are getting lots of traffic through the house - BUT no offers
2. You are getting no traffic = no offers
3. You have gotten traffic and offers.

Since you are inquiring about lowering your asking price you must be in one of the top 2! Here's the deal: if you are having traffic but no offers or NO traffic then there is something with your house that is not matching up to the buyers expectations for your price range. Whether it is lot, location, condition and/or upgrades that the average buyer in your price range/market would expect to see when viewing your home. If your agent is using a feedback system then you should know why the buyers are not considering your home and what you could do to make them want your home.

There are buyers out there! And they are writing offers on homes. I usually tell my sellers that if we have not received an offer within the first 3 weeks on the market then it is time to discuss price. After 4 weeks on the market buyers see the listing as "stale" and will either figure there is something wrong because no one else has liked it, you were unwilling to negotiate with offers you received...or they will write low offers thinking you are desperate.

The best way to combat that train of thought is to bite the bullet and make the price more attractive to draw buyers back in and potentially create competition again for your home. Usually the best place to be is 5% below market...You will actually draw more competition and get the best offer.

Something to think about, YOU CAN NEVER BE PRICED TO LOW! I have seen homes sell for 50-100K more than the asking price because there was so much competition. NOW THIS IS NOT EVERDAY OCCURANCE but often homes that are priced low get more offers and that can give you as the seller the opportunity to pick the offer that is right for you!

Lauryn Eadie
703-898-4771
lauryn@LNF.com
0 votes Thank Flag Link Thu Oct 28, 2010
The answer is, that depends. Yes, not exactly a cut and dry answer, but true. How quickly do you want to sell the home? If you want to sell quickly you should re-examine your list price more frequently. If the property hasn't sold in 60-90 in the area then you know the property is probably priced too high for the market.

A good way to know if your property is priced too high and you should lower the list price is see if you get interest from people but no offers. That means people are interested in the home but either the price or condition(and in reality a combination of the two) is what is turning them away. It's also known as "No mans land". If its been on the market for a while and you aren't getting offers, I certainly recommend lowering the list price.

The best thing to do is get with your agent and use his/her expertise in determining what the property should be priced at.
0 votes Thank Flag Link Thu Oct 28, 2010
You should first have your listing agent complete a breker price opinion, use the most similar solds in the last 3 months and the most similar homes currently listed. They should then adjust for size, condition and any amenties you have or dont have that the comps do or dont have. this will show you what the market value for your home is. your price should be at or just below market value.

Please see my blog with advice on tips when it is time to lower the price of your home
0 votes Thank Flag Link Thu Oct 28, 2010
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