How quickly do you reduce the price AGAIN?

Asked by Elizabeth, Temple, TX Tue Jul 8, 2008

So, we reduced the price by 5K yesterday. I know I need to be patient, but my husband just recieved a transfer date of September 15th. Not to mention our child who needs to get enrolled for the school year that starts August 9th. STRESSED TO THE MAX HERE!!!! How soon do you reduce the price again. I know that it is a buyers market, but I dont want to leave this house with out a penny of equity to call our own! Any advice on how to go about this would be GREATLY appreciated!! Also, would it be a bad idea to leave the house vacant and move on to another property? THANKS~

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Nikki Dyba, Agent, Jacksonville, NC
Tue Jul 8, 2008
In this market, continually lowering your price is hurting your pocket and of course sending out signals of desperation. Of course the number 1 priority is pricing your home correctly with your comparables in the neighborhood. One tool I have used and has worked very well for my sellers is instead of lowering the price $5000, how about offering a $5000 allowance to the buyer as a "do as you wish" amount. Can be used for closing costs, or for vendors such as Home Depot, Lowes ect. As long as it is on the HUD statement. This is a great incentive for buyers who need assistance with costs, or even appliances. Give it a go, I am sure it will stir up some interested parties for you. Best of luck.
Nikki Dyba , ABR , Jacksonville NC
Web Reference:  http://www.nikkidyba.com
1 vote
Don Tepper, Agent, Burke, VA
Tue Jul 8, 2008
Good advice below regarding pricing it correctly, staging it, and Diane's suggestions regarding creative marketing.

Two comments about pricing: Buyers look in price ranges or "bands." Depending on the initial price of your home, prices of competing homes, and a number of other factors, a price drop of $5,000 might or might not matter. For example, in some areas of Northern Virginia, people look in $50,000 price bands: $450,000-$500,000, $500,000-$550,000, and so on. Dropping from $550,000 to $505,000 (a $45,000 drop) might not capture as many new potential buyers as a drop from $505,000 to $500,000 (only a $5,000 drop).

Even if homes are much less expensive where you are, there are still probably "bands": $100,000-$110,000, $110,000-$120,000...that sort of thing. Break through to the next level.

Second, a bit of blunt talk here: Your wish that "I dont want to leave this house with out a penny of equity to call our own!" is understandable...and totally, completely irrelevant. Buyers will pay what they feel the house is worth. What you want won't sell your house. What the buyers want will sell your house.

So: Price it right: At the low end of the comps. Stage it. Explore creative marketing ideas. Then make sure your agent markets it as vigorously as possible.

Good luck.
0 votes
Tori Lawson,…, , Fayetteville, GA
Tue Jul 8, 2008
Hi Elizabeth,
Do you have your home listed with a REALTOR or are you doing this as a FSBO (for sale by owner)?
Web Reference:  http://www.torilawson.com
0 votes
Don Debaer &…, , Memphis, TN
Tue Jul 8, 2008
Elizabeth,
I agree with Bob. An offer of a higher commission to agents will not work in this market. No agent in their right mind will try to convince a buyer to purchase your home, so they can get a higher commission. Buyers are much more savvy today and I take my buyers to what THEY want to see, not what I think I want to sell to them. Of course, I have always done it that way....I guess some agents don't do it that way.
Anyway, Buyers today are looking for the best home at the lowest price. You should concentrate on price. If you are lucky enough to walk away with any equity at all, then you did very good. Many homes today are priced for less than the seller paid for the home when they purchased. It is sad to say, but I have listed four homes in just the last 8 weeks, and 3 are priced this way. In this market it is the only way to get SOLD. Another agent did point out though, that you will be on the buying end in another city, and should be able to purchase well below market values in order to make back your equity over the next few years as the market stabilizes.
good luck
Don
0 votes
Bob Engert, , Kennesaw, GA
Tue Jul 8, 2008
Elizabeth,

If you need to drop your price in $10,000 increments, it tells me your agent probably didn't price it right in the first place. I agree with one of the posters that every 2 weeks is about right, but I would only walk it down $5,000 at a time, unless you honestly feel you were very overpriced to begin with. As for moving out before it is sold...try not to! When I'm working the buying side as a Buyer's Agent, I can tell you that buyers instantly recognize leverage when they walk into a vacant property. Their internal "Buyer's Calculator" is automatically set to calculate the value of a vacant home, and the resulting figure is unlikely to make you very happy. In the long run, you'll be much better off if you can realistically determine your home's current market value, then price it slightly lower. A higher commission may help bring more attention to your home, but it's doubtful any agent will push their buyer too hard to make your sale, and risk losing them as a client because they feel pressured.

I wish you the best of luck with your move. May it come soon!
Web Reference:  http://www.BobEngert.com
0 votes
James Dudley, Agent, Suwanee, GA
Tue Jul 8, 2008
Elizabeth,

You have some great answers to work with. One thing that was not mentioned is that 5K reductions don't help you much.

A 10K Reduction puts your home on the "hot sheets" . that agents look at to see homes that are being priced to move! In addition you could advertise a higher selling agent commission instead of another price reduction. 4% will have buyers agents showing your home to earn some extra cash. If the buyer wants to low ball the offer you can always reduce the commission back to 3% to give the buyer a better deal.
0 votes
Jim Wilson, , Annapolis, MD
Tue Jul 8, 2008
This is a tough question. The time to move is now but the current selling market demands lowering your asking price. That is painful!! I recommend you think about BOTH the sale and next purchase together. You loose dollars selling that you surely will gain back when you buy!! In the long run your equity gain is very handsome indeed. A bridge loan fot your family may be useful too.
0 votes
Rachel Leber, Agent, Chapel Hill, NC
Tue Jul 8, 2008
Elizabeth, Looks like you've received some good advice below. The other consideration (without having seen the house and knowing the market prices in your area) may be to have the home professionally staged. The cost of home staging is often significantly less than a price reduction and compliments the effect of reducing the price. You'll get better photos, which should result in more showings and the house will show better as the buyers tour. Staged homes typically sell for more money and/or in less time. Staging would also be very important if you move out - a vacant house looks so cold and it can be difficult for buyers to picture how the furniture would layout in the rooms. Ask your REALTOR for a referral to a professional home stager. You can also visit http://www.stagedhomes.com to learn more about staging and find an Accredited Staging Professional in your area. Best of luck!
Web Reference:  http://www.stagedhomes.com
0 votes
Keith Sorem, Agent, Glendale, CA
Tue Jul 8, 2008
Elizabeth
Going back to my response to your first post, does your Realtor know your need?
If this move is due to RELOCATION for employment, perhaps your husband should discuss your situation with his employer. Most employers have relocation policies with include helping their employees move. It seems hard to believe that a caring employer would knowingly put your fmaily through this stress.

Talk with them ASAP.
0 votes
Diane Menard, Agent, Marietta, GA
Tue Jul 8, 2008
Elizabeth,

Instead of lowering your price, have your agent get in touch with their lender and do some creative marketing for you. Depending on the price point, offer no mortgage payments for three months to entice the buyers (The amount you can offer will depend on the list price) . This kind of marketing is going to look much better to a buyer than just lowering the price.

On average I try to get price reductions every two weeks until it is sold but this also depends on your bottom line and again how long you have to sit and wait for your house to sell.

Leaving your house vacant is not the worst thing in the world, but are you going to be close by where you can check on it or is your agent willing to check on it for you to make sure noone has broken in. There are a ton of vacant homes right now.

Good Luck With the Move!
0 votes
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