Some of my seller's are going through the same agony as you are right now. I usually ask them 3 questions when they've reached your dilemma:
1) Would they buy the house at the price we're asking?
2) Will a bank lend the money to someone buying at our ask price?
3) Will the buyers feel they got a good deal at this price?
If the answer to those questions is NO, then you need to lower the price!
Just as in the up market, as prices went up gradually, this down market has witnessed prices dropping gradually. Over the past 3 months alone, however, we have probably seen an escalating decline of 1.5% to 2% on a monthly basis in some of the areas I cover. That's 18%-24% on an annual basis, a decline that if continued will certainly get us to a bottom much quicker and make buyers and not sellers very happy. If your area is also experiencing a decline, you really cannot price your home as a home that was sold 6 or even 3 months ago. You need to get ahead of the downward price spiral and lower your price now..
I'm sure this is not what you wanted to hear, but as I tell my seller's, it is information I believe they should hear.
I wish you the best!
P.S. If you've dropped 10% and have done so in drips and drabs, you need to make a more substantial price break. I've just dropped over 15% on a home that the sellers wants to sell and probably will now as a result of the new price. You can see that house on my web site via the link below.
Factors that affect the market:
Supply: MLS, FSBO, and builder inventory. Closed sales and Pending sales
Reasonable time on the market: Different for different markets and locations within each city/county. Over 55 communitiesâ€™ verses regular residential.
Condition of Home: Curb appeal, updated or not updated, Roof life
Utility: In order for a commodity to have value it must satisfy a need or a want and in order to do that it must provide some form of utility to its owner.
Purchasing Power = Interest rates and borrower credit. It use to be one could have a very low credit score to get a loan. Not anymore, which has taken many buyers out of the market.
Demand: When it comes to real estate its location and utility are what drives the desire to own it.
Marketing: The more people who know your home is for sale the better chance it has to sell.
All these factors apply when it comes to selling real estate not just the price.
Your Realtor needs to understand these factors to keep up with the market to properly advise their seller.
Itâ€™s a tough market out there and unfortunately many sellers share your same frustration. I think Debbie provided some valuable feedback below and Iâ€™d have to agree with a lot of her advice.
Iâ€™d like to add that marketing plays just as an important role as your list price and condition of your home. Your home could be realistically priced and showing great, but if itâ€™s not well represented online (poor photos & weak description) it may not be drawing potential buyers in for showings. I tell my clients that todayâ€™s curb appeal begins with your online listing. With over 84% of buyers previewing homes online prior to viewing them in person, itâ€™s imperative to have an impactful online presence to draw buyers in!
As Tina pointed out below, itâ€™s also important to differentiate your home from the competition. A successful way of doing this is through the help of a professional home stager. The role of a stager is to assist you in ensuring your home is showing at its absolute best. Not only is this important when you have potential buyers coming through your home for showings, but it also helps create that positive first impression with your online listing.
As a seller, itâ€™s important to choose a team of experts who will help bring successful results. Do your research and ensure youâ€™re represented by a reputable realtor in the area that is knowledgeable about current market conditions, has an aggressive marketing plan, and offers value-added services. Do they have a stager that will assist you in properly preparing your home? How about a professional photographer that will work closely with the stager and realtor to capture the home in its best light? In addition, remember that as a seller youâ€™re part of that team as well. You have to be flexible and trust what your team is recommendingâ€¦.from setting a realistic market price for your home, to taking the necessary steps to prepare your home to appeal to the majority of buyers.
You have some great answers here and I would like to add that pricing a home against the list price is not where you need to be in this market. You need to be ahead of the market,. By that I mean you need to price your home at the sold price per square foot.
If the house is not showing then it is mostly price, as most people select the homes they are going to see by the price they can afford. Once in the house they will select on condition. To see how your house compares as it relates to condition. Have your agent show you the competition. Take a tour of the comps you mentioned, see where the differences are and see if you would pay for that difference as a consumer. Since you said your home is only a few years old, you also are competing with new construction. Builders are giving lots of incentives to move inventory, so you have to make your house shine above these incentives.
I hear your frustration, and I can empathize with you. Some of my sellers are going through the same agonizing process. The problem is, they don''t always listen to me!! Maybe you will!
All I can say to you, and I say to them is......the 2 most important things in selling a home today are PRICE and CONDITION........and price can trump condition.
I will assume your agent is doing his or her part in the marketing of your home - virtual tour, brochures, and lots of internet placement - a realtor's open house with LUNCH (I always feed them!!) may help get you noticed. I was taught early on that you have to sell your home to the agents first - then let their enthusiasm be carriee over to their buyers. A higher commission to the selling agent might be an incentive, too.
You say the agents compliment you - well maybe they are being polite, or maybe your home is really in tip top shape. You might , however, want to consider calling in a person who does STAGING. It's amazing the difference furniture placement or decorating details can make. It's worth a try.
The bottom line is - you can throw all the stats away in a market like the one we are experiencing. If you want to selll NOW, you have to price it below your competition - I know that concept hurts, but you need to make your home stand out from the others in condition and price. Make sure you capture the next buyer that comes along, as there are fewer of them out there today.
I know the thought of further reductions makes you say ouch, but that's what it might take.
Even though you are represented by an agent, the blog attached to the link below may be of some interest to you. While it is directed to FSBOs, there are some ideas that you possibly could implement to augment your agent's marketing plan. Please, if represented, always keep your agent abreast of anything you do on your own. BTW, yeah it seems to be all about price, but obviously the more people that know about it the better. Good luck.
The rule of thumb is, no showings....lower the price.
no offers, lower the price.
It's all about knowing your market and competition. The market you are competing with is a "new" one. One created by short sales and foreclosures. You may not need to be priced as low as they are but you need to be within striking distance.
Then I'd ask what is it that my home has or doesn't have that these do/don't? If you've got the same home then you need to ask for more specific feedback from the realtors that did show it. What was the one thread that kept coming up? That information is where you start. It could be a simple matter of just a $10 gallon of paint and boom, it's sold... or it could be decluttering,,, etc. Your home needs to have something that the other homes don't have so that the traffic is driven to YOUR home, not the others. Without knowing what your home looks like, it's hard to give any other specific advice... If you can email me the listing number, I can take a look at the home and maybe give you some more specific advice.
Tina Evans, Broker