Many showings, no offers, is another price reduction a good strategy in this market environment?

Asked by Allison, Mon Oct 20, 2008

Hi- Our house has been on the market for about 50 days now. We've had many showings, but no offers. The house is in great condition, many updates, desirable location, competitive price. Following our realtor's advice, we have lowered the price twice since listing, once from $465K to $459K and then again to $449K. The realtor is now recommending another price reduction to $439K. Is this a sound strategy? My hunch about the market now is that people are either waiting for a home to sell, having trouble getting loans or afraid to buy....and that is why we aren't getting offers, not that the price is too high. Furthermore, in this market it seems that buyers would be able to bid low, so I am not sure how much difference this price reduction would make on our chances of getting an offer. I'm interested in hearing other perspectives on this. Thanks.

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28
Paula, Both Buyer And Seller, Plantation, FL
Sat Jan 10, 2009
We have had our house (South Florida) on the market for 14 months, listed initially at $378K, first offer (after about 4 months) was for $300K, and it was based on a contingency of the buyer selling their home first, wanting us to take it off the market and 'hold' it for them, all for a good faith check of $1K, and they also wanted that back. All in all now we've had 3 realtors, and they have all recommended price reductions to sell, but even with all of the reductions, the offers weren't even close to the list price. I personally agree with you that people just are waiting for more pricing reductions, and/or can't get a loan, and/or are losing jobs, and in our area our competition is lots of foreclosures. The banks get bailed out but are not lending and are selling what they are foreclosing on for a fraction of the debt..... we are kind of sorry that we moved now since we had no mortgage on that house until we purchased this one. We pulled ours off of the market and are probably going to try to rent. It would be cheaper to leave it vacant for like 5 years than to take the amount of loss we would take based on the low-ball offers we have gotten. Not sure where you are located, but some are doing much better than the So. Fla market, and our house is in a perfect location, move-in condition, waterfront with a dock, boat lift, fireplace, etc etc.....the only houses that have sold around the area are foreclosures at HUGE mark downs.....I am not a realtor, nor are we planning on working with any more realtors!! Paula G
1 vote
RoostWise Te…, Agent, Bedford, MA
Mon Oct 20, 2008
Hang in there...50 days is not a long time in this market. If you are motivated enough to make another price change, it could help. Price is a very big factor for buyers. A price drop will get the attention of buyers who are considering making an offer. If there are serious buyers with interest in your house already, a price drop might motivate them to take action before someone beats them to it. Buyers today are definitely looking for a 'deal' but when your house is priced within that striking distance for someone to write an offer, that offer will come. I don't know what town your home is in, but the data that your realtor can provide you with as far as 'average days on market' for homes similar to yours' might ease your worries. I know that patience is much easier to talk about, than have!
1 vote
Sarah Pomphr…, Agent, Rumson, NJ
Wed Feb 5, 2014
If you've had many showings and no interest a price reduction would be the next step in hopes of creating more buyer interest. All depends on your motivation to sell. You might also want to ask your realtor if there was any negative feedback that you may be able to address. Good Luck!
0 votes
Ron Thomas, Agent, Fresno, CA
Thu Jul 11, 2013
FIVE YEARS OLD!!!!!!!!!
Com'on man!
0 votes
amskeeter4, Home Buyer, Point Pleasant Beach, NJ
Thu Jul 11, 2013
Unfortunately, the houseing Market is NOT HOT anymore. Since the housing crash, banks, mortgage companies, builders, and people in general have bellied up. Including other countries. Look around at houses listed in your area are they listed the same? And in the past 6 months what have they sold at, if they sold? and at what price? It is time that we face the truth, the market is flooded with homes, there is no money, and there are still many forclosures going on. Banks are still holding on to properties they can not dump. So by next year 2014, your property may be worth half of what you think it is worth now 2013. If you really want to sell, lower it again this is not a time to flip. If you are lucky you will break even.
0 votes
Joan Braunsc…, , Morris County, NJ
Sat Aug 27, 2011
Since Allison posted this question 3 years ago, for her sake I truly hope her house has already sold.
0 votes
Nick & Laurie…, Agent, Lewes, DE
Sat Aug 27, 2011
Curb Appeal, Location, Condition and Price are controlling factors - houses don't sell because of condition and/or price, so if your home is in a good location, with great curb appeal and in excellent condition - the only reason you're not getting offers is because of the price - you may have started too high and now you're in a Chinese Auction - lowering the price until someone makes an offer. There is a physcological barrier at $400,000 and even at $439,000 you most likely will get offers below $400,000 - so bite the bullet and drop the price to $399,000 and hold your ground. If that doesn't work, you're still too high. Nick Carter
Web Reference:  http://www.228Nick.com
0 votes
Tom and Joan…, Agent, Boston, MA
Fri Aug 26, 2011
Allison:

I would ask the Realtor what the average time on the market is? 50 days is not a lot of time and you have been very aggressive, but of course if you listed too high that is a different story. I would go back to my CMA and look at the original recommended listing price and use that as my baseline. If the agent had recommended $425K, but you wanted to start at your number of $465K then it is not unreasonable to do another drop. Best
0 votes
Does anyone look to see when the question was posted?
Folks this is outdated.
Flag Wed Sep 4, 2013
Mikel DeFran…, Agent, Canton, MA
Wed Aug 24, 2011
A properly priced home will sell in this or any market. Paula's remarks from Florida display an unwillingness to accept the realities of her market. Yes, Florida has been hit hard, but we still have properties with fair offers within a few weeks when properly marketed.
Web Reference:  http://www.SuccessInMass.com
0 votes
Nick & Laurie…, Agent, Lewes, DE
Tue May 17, 2011
I call it "IPRSFMV" or 'Incremental Price Reduction Seeking Fair Market Value'.... a price auction, and as you lower the price incrementally over time, buyers WILL make offers. You currently have a physchological price point at $400,000, even at $449,000 you can expect offers below $400,000 - depending on your motivation to sell and buy another house at a deep discount - drop your price to $399,000, hold your ground, sell your house and become a negotiating buyer on your next home. Another risky statagey is to drop the price dramatically and hope for multiple offers that bid the price back up to Fair Market Value - I would NOT recommend this strategy in these conditions. I would not worry about your impact on the neighborhood prices since there most likely are short sales and pending foreclosures that will have greater impact on the neighborhood. And finally, make sure you are the best bargin in your area because that's what buyers want.
Nick Carter
Broker Associate since 1990
Jack Lingo Realtor
800-331-4241
Lewes, DE
Web Reference:  http://www.228Nick.com
0 votes
Steve Casey, Agent, Walpole, MA
Mon May 16, 2011
It's easy to resist price reductions with the thinking that people should make offers. However, you are drawing the wrong crowd by being overpriced. There are price points that invite whole new tiers of buyers.
0 votes
Jan Crosby, , West Roxbury, Boston, MA
Wed Dec 1, 2010
Dear Allison,
Fifty days is not very long on the market especially for a fall listing. However a strategy some brokers suggest at this time is to withdraw from the market for the holidays and start fresh in January. Is your initial price one that was recommended by your broker or did you choose it? If you choose to start high you have to bear some responsibility. You might want to get another opinion. Every situation is different. In West Roxbury 41 homes have sold between $400 and 500 in the past six months. The average asking to selling price is 97.5%. Our community is very strong because of our closeness to downtown and the neighborhood amenities. If you are fresh on the market, have a strong marketing campaign and price it correctly, you should be able to come in close to your asking price.

Jan Crosby
RE/MAX First Realty
617-699-1668
0 votes
Bette Abrams…, Agent, Coral Springs, FL
Mon Jan 12, 2009
The market always...yes, always, sets the price. If there are many showings but no offers, it's time for a price reduction. On a weekly basis, ask your Realtor for the latest closed sales and pending sales. On a pending sale, your Realtor should be able to see how soon after the last price reduction, the house went pending. There are definitely buyers out there now, but price is king!
0 votes
Phill Slocum, Agent, Oklahoma City, OK
Mon Jan 12, 2009
Hi Allison, Rather than Price Reduction which brings down the value of neighboring properties besides your own property, I am more in favor of offering something to the REALTORS who decide to show your house to their clients, such as a $1,000 to $5,000 Bonus, instead of reducing your property $16,000 to $20,000+, Think how hard the REALTORS will encourage the showing of your home, and if you have enough equity offer the buyers something such as a home warranty to cover appliances and so forth, or maybe offer to pay closing cost of the buyer. There are numerous possibilities or variations, but I think these strategies will bring a quicker sell. Use one, or a combination, or all three combined whatever makes you comfortable.
I would not lower your price more, but use enticements to show and buy your property.

Buyers are buying because of the really low interest rates right now.

Ask your REALTOR for a list of homes that have sold within the last 1 to 7 months and within 1 to 5 miles that are similar to your property.

I would also visit Frontdoor.com, on the sellers tab, look to selling tools, print out the open house check list, and do as much of it as you can to help sell your home. Also look to Features and Experts for the following articles: Designed to Sell: Room by Room, 10 Ways to Increase the Value of Your Home, Selling DOs and DON'Ts.

De-clutter and Clean, Help sell your property by advertising it yourself coupled with your REALTOR's efforts to market your property. I am sure it will be sold in no time. Make sure to discuss this with your REALTOR.

Finally, Your REALTOR is an important tool to utilize because you not only have one REALTOR working for you, but a whole network of REALTORS who go to the MLS everyday with Buyers searching for the home to make their clients happy enough to Buy.

Read Psalms 91 everyday to help you until your house is sold, and watch Joel Osteen on TV for an encouraging word.

Psalms 91

7 A thousand may fall at your side, ten thousand at your right hand, but it will not come near you

9 If you make the Most High your dwelling-- even the Lord, who is my refuge-- 10 then no harm will befall you, no disaster will come near your tent. 11 For he will command his angels concerning you to guard you in all your ways; 12 they will lift you up in their hands, so that you will not strike your foot against a stone. 13 You will tread upon the lion and the cobra; you will trample the great lion and the serpent. 14 "Because he loves me," says the Lord, "I will rescue him; I will protect him, for he acknowledges my name. 15 He will call upon me, and I will answer him; I will be with him in trouble, I will deliver him and honor him. 16 With long life will I satisfy him and show him my salvation."

Best of Success, Theresa Slocum

http://www.WestOkcRealEstate.com
Web Reference:  http://www.frontdoor.com
0 votes
Jay Hurst, Agent, Washington, DC
Sat Jan 10, 2009
I am surprised at all of these pricing answers. No showings means price. No offers means showing appeal.
Forget about loans etc, there is money for well qualified buyers.
If you are getting showings, then your pricing is within the market. They see the price and location BEFORE they see the house.
The problem is what they see inside. Having never seen the home, I can only go on what you have said, but there is something missing.
Get a qualified home stager to look at it asap.
Good luck!
Web Reference:  http://talleyhursthomes.com
0 votes
Nick & Laurie…, Agent, Lewes, DE
Fri Jan 9, 2009
I believe in incremental price reductions/adjustiments to attract buyers and buyer's agents, this shows motivation on your part and keeps your listing active on the Realtor's hot sheet which most Realtors check daily. It is a version of the 'Chinese Auction' - that is if you lower the price enough, the buyer's will come to you. Another strategy is to drop drastically to attrach multiple buyers who they bid against one another and drive the price back up about the list price. Another stategy would be to take the house off the market for about 2 weeks, the buyer's who looked and liked the house will ask 'what happened' and then when you put it back on again, you will get additional activity. Also, when you have a showing, try to schedule more that one at the same time to get 1 or 2 prospects in the house at the same time. Open houses should be for short periods of time and advertised to neighbors. If you're buying a new house, you can use the same tactics to purchase and make up any reduction on the sale of your home.
Web Reference:  http://www.228Nick.com
0 votes
Phil, , Guilford, CT
Thu Jan 8, 2009
Have your Realtor re-run the recent comp. Sales and show you the active properties in your area. If your not priced right and the 'next best thing', its likely they'll just buy the other house. If your getting the showings and no offers, it could be that a better deal popped up for sale or that the visitors are turned off by something about the home ..
0 votes
Betty Stroll, Agent, Greenwich, CT
Thu Jan 8, 2009
I would ask your Realtor to have some fellow realtors do a price opinion on the property. These realtors should come from HER/HIS office. Then discuss market time, conditions in your town, and the percentages of what is selling. Lately, we have been seeing deals going in our towns. There are buyers out there, if the house is price right, it should sell..Good Luck with your home.
0 votes
Natalie, , Vail, CO
Thu Jan 8, 2009
You can probably get an offer within a week or two if you drop the price significantly $50-$100K below the last comparable sales. If you are not motivated to sell, I suggest waiting as the market shall improve by the summer. Most buyers are afraid to buy now thinking that the prices can go down more. This is their mistake as they could offer a lower price now and get a good deal together with the lower interest rate. I just purchased a house for myself and got 4.875%. It's weird when people are buying when the prices are going up and doing nothing when it's a perfect time to buy like now.
0 votes
Bill Eckler, Agent, Venice, FL
Thu Jan 8, 2009
Allison,
Even though you have not had this property on the market for a long period it is important to hear th message that is being sent.

A lot of showings with no offers generally means a price adjustment may be necessary. By dropping the price you send the message to buyers that you want the property sold. It will also provide you with an excellent reason to be in touch with all of those individuals that have seen it previously........to make them aware of the price reduction.

If the interest is there, keep the ball rolling and get it sold.

Good luck
The Eckler team
0 votes
Elain Szu, Home Buyer, 94123
Thu Jan 8, 2009
Hi Allison, any updates on your situation? Did you go with a price reduction and were you able to sell?
0 votes
Yannis Tsits…, , 01742
Fri Nov 7, 2008
Hi Allison:
first things first, what is the average time frame in your area that properties sell ?
If it is 30 days then 50 days are a lot (what am trying to say is compare equally) in my area here is about 140-150 days the average but around 30-60 if they are priced well. Your Realtor should be able to do an analysis for you and differentiate.
2.What is the feedback from all the showings so far?
3.How competitive your property is with the other offered properties in your area?
4.Have you visited in OH the other properties that you competing with?
(you should be in the top, best deal, in order to be competitive)
Everything else that you mentioned, and all my fellow RE are also very correct, which means that the actual buyer pool is very limited or they are looking for bargains. I hope that it is helpful to you.
0 votes
Deborah Del…, Agent, Centerville, MA
Wed Oct 22, 2008
Hi Allison,

I understand your fustration and I feel for you. When I read your dilemma, my first thought was "whats going on inside your home?" You see, if you are getting (many) calls/showings, that means that your asking price is not preventing folks from asking to see it. Something is stopping their interest once they get inside. Now I know you said the home and location are great but remember, it's hard for you to be completely objective.
With such a huge inventory of homes currently on the market, buyers can afford to be very picky. Perhaps you should have another couple of realtors within the same company or professional stager come in and give you a fresh perspective. While you home may be in great shape, it could be not enough light, too many collectables, small rooms, poor flow....etc.
I don't always think dropping price is the answer as condition and marketability count tremendously too.

Good luck Allyison..
0 votes
Keith Sorem, Agent, Glendale, CA
Mon Oct 20, 2008
Allison
I would ask your REaltor to meet with you and to bring the following data:

Since your home hit the market, how many homes:
- came on to the market
- lowered their price
- went into escrow
- sold
-expired.

The truth is that homes are selling (see link). Homes that sell in the first 30 days sell closest to asking price, so you need to get your home sold. The longer it sits on the market the less it will be worth.

The rule of thumb is 10-12 showings or one offer in two weeks or adjust the price.
No showings - lower the price
Few showings - lower the price
No offers - lower the price
Low Offiers - lower the price

With the markets the way they are unless you are prepared to stay for a couple of year I'd sell now. You will probably need to re-launch the listing (new photos, staging, etc.)
0 votes
Scott Godzyk, Agent, Manchester, NH
Mon Oct 20, 2008
Good Afternoon Allison,

50 days is not alot of time, so no time to pannic yet. yoru main concern would be to get a new brokers price oppinion which will show you what similar homes have sold for recently in your area and what wimilar homes are listed for. you should use this information to better guage if you are priced correctly. good luck with your sale.
Web Reference:  http://www.ScottSellsNH.com
0 votes
Territory.c…, Agent, MA,
Mon Oct 20, 2008
This is impossible to answer without either knowing the house or the town ... Could you tell us either or both? i might be able to answer it similar to how i answered this question: http://www.trulia.com/voices/Home_Selling/I_need_help_House_…

"My hunch about the market now is that people are either waiting for a home to sell, having trouble getting loans or afraid to buy..." This is a very fair assessment of the situation. All of those issues are playing a part in the soft market. That said there are many creative ways to sell a home in a tough market, and one does have to do with a pricing strategy. Has your agent offered any other advice other than price drops? Seems a little odd that the only suggested strategy is to continually lower the price in 5-10K increments.
0 votes
Lawrence&She…, Agent, Plainview, NY
Mon Oct 20, 2008
Taking small reductions like you are taking does not make a statement and may go un-noticed. With that being said, 50 days is not a long time to be on the market so be patient. It's not what you are listing your house for, but what a buyer will be willing to pay in your area. So check the comps again and make sure you're at a competitive price for your area!
0 votes
Fred Glick, Agent, Mountain View, CA
Mon Oct 20, 2008
Pretend you are a buyer of a house like yours. Search the net, find open houses, etc and see what similar properties are asking. Also, ask you agent for a list of comp sales for the last 2 months.

Also, have the house appraised, home inspected, staged and energy audited.

Make your home the best value for the dollar and it should sell!
0 votes
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