Home Selling in Wenham>Question Details

J. Nel, Home Seller in

At what point do you grop the price of a house? Days, Months?

Asked by J. Nel, Fri Feb 29, 2008

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15
If you are receiving a lot of buyers through your home but aren't receiving offers, then it is either priced too high or shows poorly. In this market, orice is the driving force. If you have receive offers, but they have been low-ball offers, then maybe you should look at the price.

It's impossible to say when you should consider reducing your price without knowing all the circumstances, but right now if you haven't received an offer in 30 days, it's time to re-evaluate your price.

I just attended meeting of aal the mortgage officers for one of the larger regional banks, and their treasurer and ecomomist was finding a home price drop of 1-2% per month, and expected it to continue through this year. What that means to you is that for every month your home sits on the market, it is worth 1-2% less. If you have a $400,000 home and it doesn't sell in 2 months, it could be worth $16,000 less. So even if you dropped the price by $10,000 you are still behind the eightball. You could be playing catch-up with the market for months.

An example of this is someone I know who was selling a condo in Naples Florida (be glad you are not trying to sell there). They placed their property on the market in 2005 at just above what others had recently sold for (at the height of the market). Other units came on priced lower, and sold. They lowered their price to that level, but now the market had dropped even more. This scenario went on for 2 years until they dropped the price fast enough to catch up with the market. The bottom line - they originally listed their condo at $280,000 when they could have sold it for $250,000. Instead they play the waiting game and ending up selling for $140,000!

This is an extreme example in a market that is much worst then we have here on the North Shore of Massachusetts (we actually have it pretty good for the most part)., but I have seen this same thing happen locally.

If you home is not selling, there is only one reason - marketing, and pricing your home correctly is an intergral part of marketing. Determining the correct price in a declining market isn't easy, though. But if your home is not getting many showings, or a lot of showings without offers, drop the price quickly if you are really serious about selling.

Good luck.

Jim
2 votes Thank Flag Link Fri Feb 29, 2008
I believe, like some of the others, that traffic is the key. As long as your listed with a real estate professional that has shown you the data in your area and you are priced in that "sweet" spot, you should be receiving offers. Current market conditions have buyers being very particular with how a home looks. With an unbiased eye, take a look around your home to see how a stranger would view it during a showing--what looks good? what looks bad? - what projects, if any, were unfinished? If you do not want to "stage" your home yourself, price it accordingly. Also, be sure that your home is priced appropriately. Study the data, are you higher than the competition? Lower?
Showings with offers are the key!
1 vote Thank Flag Link Fri Feb 29, 2008
Everyone is waiting for the new inventory...the first two weeks you'll get the most activity, unless it falls during a holiday. After the first 30 days, if you haven't gotten an offer or have had some serious interest and good activity, you should consider a price reduction.
0 votes Thank Flag Link Wed Jun 18, 2008
It is important to understand that all of Real Estate is local, consult a Realtor who works in your area for an accurate answer. I would say in broad general terms that the number of showings will tell you if you are in the ballpark on price or not, but only a local agent could tell you what the exact number is.
0 votes Thank Flag Link Wed May 14, 2008
Hi J. Every REALTOR has thier own general guidlines. Depending on what the house was priced at to begin with, I usually use thiry days as my guideline. I have many tools that I take into consideration when making my decision. How many showings have there been? What has been the feedback? Have there been many more inquiries than requested showings? How are comparable properties doing? Every property and situation is different and every seller's motivation is different. If priced to sell, a drop should not be necessary.
0 votes Thank Flag Link Wed Mar 12, 2008
My rule of thumb is you should have an offer after 12-15 showings. If you have not achieved that in 30-45 days. I would consider dropping the price.

More importantly, what is the comparative data and the current feedback from showings telling you. Most house that are selling are selling quickly because they were priced well, while others languish on the market unsold because the listing price was too high and then sellers drop the price too slowly. In most of the Greater Boston area we are currently losing a half of a percent a month in market value. Many sellers get caught in chasing the market down.

I suggest pricing you house at the low end of fair market value or a few percent below. You need to be ahead of the slowing market, not trailing it. Many sellers are still pricing like they were 3 years ago, 5 -10 percent above fair market value. We are in a declining market and that strategy no longer works.

Personally, I would sit down with your agent and objectively review the market data. Price your house to get it sold in 30 days and review the market data and the feedback on your house weekly. Pricing your house for a moderately quick sale will ultimately net you more. Do not let your house stagnate or chase the market down.
0 votes Thank Flag Link Thu Mar 6, 2008
Each market is different. However, assuming you have a competent broker that is effectively marketing your home and that you have it priced at market value which I like to call "enticing pricing", you should sell fairly quickly. If you haven't gotten a good sense of what kind of interest you're getting within 2-3 weeks you're probably overpriced. Keep in mind that my team like many others who anwered, are located in Boston Metro where things probably move quicker on average. My team, http://www.TheBostonHomeTeam.com is currently under 30 days on market. Of course, we sell primarily in Jamaica Plain and surrounding neighborhoods.
Specifically, the satistics for Wenham for the last 6 months are (under agreement and sold):
Single Family Listings: 19
Average List Price: $655,258
Average Sale Price: $651,137
Average Market Time: 164.47
0 votes Thank Flag Link Tue Mar 4, 2008
If the home is on the market for fourteen days without much activity or an offer, then the market has rejected it. It would be ready for re-pricing. Of course, my goal would be to price the home ahead of the market, and close to where I thought it would sell. This is a very successful strategy, especially in struggling markets.
0 votes Thank Flag Link Tue Mar 4, 2008
Geez sell in 45 days? I don't know any markets around here [ New England] that have those numbers. We are averaging 180 days. I think at 6 weeks you definitely should be lowering your price.
Then you have to decide how badly you need to sell. Ideally you'd do better in a year if you can wait.
0 votes Thank Flag Link Sun Mar 2, 2008
I use the rule of thumb, for every 10 showings, I should have one potential offer. It's also imperative that you understand the current ACTIVE competition for your home in relation to price bracket and location. It's all about how quickly you'd like to sell your home. As mentioned before, a good agent will be able to prepare you a market momentum report which predicts activity as opposed to a comparative market analysis which tends to base information on past trends.
0 votes Thank Flag Link Sat Mar 1, 2008
J...I agree with Keith...it's ultimately the market that sets the price. However, a good listing agent should be able to help you detrmine a price to get interested buyers through the door immediately. Properly priced and properly marketed, your home should sell within 45 days...even in this market.
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Sat Mar 1, 2008
Cindi Hagley, Real Estate Pro in San Ramon, CA
MVP'08
Contact
J.
Thank you for your question. I wish I knew where you were living?!
I work in Southern California and consistently homes that sell in the first 30 days of market time sell for closest to asking price. At 120 days they sell for about 93.6% of asking price. That last figure is probably AFTER they have lowered the price at least once.

So the truth is that you, as the seller, do not set the price. I don't, the Realtor. The market, or the buyer, sets the selling price (and,you agree, of course!).
So the list price is a tool to attract buyers. Buyers shop in price ranges. An over-priced home in a declining or flat market (which mostt, but now all, places are) is a recipe for failure. In this market pricing slightly belwo market is probably the best way to get the highest price.

In our market if we do not see at least 10-12 showings in the first 2-3 weeks, then we will adjust the price. Due to the number of homes on the market even with all the marketing we do, after a few weeks listings get "lost in the shuffle". Your mother said "you only have one chance to make a first impression" and she was rigtht~
0 votes Thank Flag Link Fri Feb 29, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
It depends. The most important question is have you listed your property in the MLS with a qualified real estate professional? By qualified I mean a full-service real estate real estate agent that has had at least two years of full-time experience. If not, that is where you should start.
Web Reference: http://www.bowenboston.com
0 votes Thank Flag Link Fri Feb 29, 2008
It depends on how much traffic you have. If it's been 30 days, and you're getting very little traffic... it's time to start considering a drop. if it's 30 days and people are swinging through, you might want to improve the pitch or the presentation before you drop the price...
0 votes Thank Flag Link Fri Feb 29, 2008
I usually wait for the first 45 days,, if no activity what so ever. I review the comps again and see what the market is doing.. A small decrease in price will hopefully help somewhat.
0 votes Thank Flag Link Fri Feb 29, 2008
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