Friday, September 6, 2024 / by Teresa Pileggi
Price Reduction Strategy: When Is the Best Time to Cut Listing Price?
Price Reduction Strategy: When Is the Best Time to Cut Listing Price?
It is frustrating to list your home and watch it stay on the market without attracting offers. Even after including all the desirable features, checking all the selling points, and analyzing the market, your listing can take longer on the market, forcing you to review it. According to most real estate professionals, price is the first thing most buyers look at before checking their priority box. Thus, if your listing has stalled, you may need to lower the price, sometimes below the market price, to attract buyers.
How low can you cut the price, and when is the right time to review it? Reducing the price may be the last thing in mind when eyeing a high return on property, but it is worth it if you want to sell faster and move on. However, before making the tough decision, here are a few things to know about price reduction.
Signs It Is Time to Cut Listing Price
Reducing the listing price is a difficult decision that you must make to please prospective buyers and remain competitive in the market. You can usually cut the price when the house takes too long to receive offers. However, checking other indicators is vital as they let you know if your house will sell after a price adjustment. Here are signs that the price needs adjustment.
1. Nearby comparable homes are selling faster
Everyone wants to make a profit, regardless of their reasons to sell a home. That is why you can list a home at your preferred price while remaining competitive. However, if you see nearby similar homes selling faster while you are not getting any offers, it is a sign that you have overpriced your listing and have to cut it. The best way to adjust your price is to review other listings with features similar to your
home and cut your price to be within the local market price range.
2. Your home is getting fewer or no showings
If no one is booking an appointment to see your home or you are receiving fewer appointments, it is an indicator that your price is not appealing to potential buyers. Most buyers will book appointments to tour homes if they are satisfied with the price or believe they have room for negotiation. Therefore, setting your asking price too high can send away buyers even before they visit the house.
3. Consistent price reduction feedback from buyers and real estate agents.
You can also reduce the price after listening to buyers' and real estate agents' feedback. In most cases, potential buyers will complain about the asking price not matching the house's market value.
Alternatively, your real estate agent can advise you to reevaluate the property and set a new asking price or undertake minor renovations and home staging practices to match the listing price. In all cases, it is vital to pay close attention to significant concerns that can push away potential buyers and reduce the price.
4. Your home has a low appraisal
It is wise to have a detailed home appraisal to determine your home's price range. However, you can set your asking price above the appraised value to make a profit. While this trick can work in a competitive seller's market with higher demand, it may not work in a buyer's market with more homes for sale than buyers. Therefore, if you have set a higher asking price than the home's appraised value, it is time to reduce the price and see if it starts getting offers.
Best Price Reduction Strategies
With all the signs above, the next question to ask is, how do you reduce the listing price?
Most home listing experts recommend researching the market to determine whether and by how much to reduce the price. But if you are determined to make a quick sale, consider the following price reduction strategies.
1. Check all comparable sales data
Before lowering the price, check housing market reports and review all homes sold in your market for the past six months. Reviewing these data lets you know the properties, sizes, conditions, and prices at their time of sale and how they compare to your home. It also allows you to understand what buyers want and how much they are comfortable to pay for similar homes.
2. Work with market trends
A housing market experiences unpredictable shifts, and you should learn to adapt to changes. The time you decide to sell your home determines if you will set a higher or lower asking price. Understanding if you are selling in a seller's or buyer's market will also determine if you need to lower the price or wait for the market to bounce back.
3. Consult your real estate agent
Your real estate agent can advise you if it is right to cut the price or check other factors influencing the sale. Review the listing with your agent, checking all the factors that can make your home receive fewer or no offers. From there, you can lower the price to meet the market conditions or withdraw your listing and wait for a favorable time to sell.
4. Try the psychological price adjustment hack
Selling a home is sometimes a game of mind, different from what the market says. That means you can play with the buyer's mind a bit to see if you will receive offers on your listing. For instance, to make your listing unique, you can adjust the price below a rounded number, such as $799,000 instead of $800,000. The trick can attract more potential buyers, who will see it as a better deal.
5. Reduce the price only once
It is tempting to make multiple minor adjustments to the price to avoid going into huge losses. Unfortunately, buyers may not notice such minor changes or assume you will lower the price further. To make an impactful adjustment, cut the price only once and decisively after assessing the market. For a better deal, you can reduce the price by 5% of the current listing price to make it more noticeable.
The Bottom Line: When Is the Right Time to Reduce the Price?
The exact time to reduce the price depends on the comparable sales, market conditions, and feedback from buyers and real estate agents. However, according to most experts; recommendations, the best time to lower the price is within two weeks of the initial listing. That is because your house will receive more activities in the first 21 days after listing, and waiting for this period to elapse will make your home less attractive to buyers. Ensure you talk to your real estate agent, check recent sales, and understand the market trends before cutting the price.
It is frustrating to list your home and watch it stay on the market without attracting offers. Even after including all the desirable features, checking all the selling points, and analyzing the market, your listing can take longer on the market, forcing you to review it. According to most real estate professionals, price is the first thing most buyers look at before checking their priority box. Thus, if your listing has stalled, you may need to lower the price, sometimes below the market price, to attract buyers.
How low can you cut the price, and when is the right time to review it? Reducing the price may be the last thing in mind when eyeing a high return on property, but it is worth it if you want to sell faster and move on. However, before making the tough decision, here are a few things to know about price reduction.
Signs It Is Time to Cut Listing Price
Reducing the listing price is a difficult decision that you must make to please prospective buyers and remain competitive in the market. You can usually cut the price when the house takes too long to receive offers. However, checking other indicators is vital as they let you know if your house will sell after a price adjustment. Here are signs that the price needs adjustment.
1. Nearby comparable homes are selling faster
Everyone wants to make a profit, regardless of their reasons to sell a home. That is why you can list a home at your preferred price while remaining competitive. However, if you see nearby similar homes selling faster while you are not getting any offers, it is a sign that you have overpriced your listing and have to cut it. The best way to adjust your price is to review other listings with features similar to your
home and cut your price to be within the local market price range.
2. Your home is getting fewer or no showings
If no one is booking an appointment to see your home or you are receiving fewer appointments, it is an indicator that your price is not appealing to potential buyers. Most buyers will book appointments to tour homes if they are satisfied with the price or believe they have room for negotiation. Therefore, setting your asking price too high can send away buyers even before they visit the house.
3. Consistent price reduction feedback from buyers and real estate agents.
You can also reduce the price after listening to buyers' and real estate agents' feedback. In most cases, potential buyers will complain about the asking price not matching the house's market value.
Alternatively, your real estate agent can advise you to reevaluate the property and set a new asking price or undertake minor renovations and home staging practices to match the listing price. In all cases, it is vital to pay close attention to significant concerns that can push away potential buyers and reduce the price.
4. Your home has a low appraisal
It is wise to have a detailed home appraisal to determine your home's price range. However, you can set your asking price above the appraised value to make a profit. While this trick can work in a competitive seller's market with higher demand, it may not work in a buyer's market with more homes for sale than buyers. Therefore, if you have set a higher asking price than the home's appraised value, it is time to reduce the price and see if it starts getting offers.
Best Price Reduction Strategies
With all the signs above, the next question to ask is, how do you reduce the listing price?
Most home listing experts recommend researching the market to determine whether and by how much to reduce the price. But if you are determined to make a quick sale, consider the following price reduction strategies.
1. Check all comparable sales data
Before lowering the price, check housing market reports and review all homes sold in your market for the past six months. Reviewing these data lets you know the properties, sizes, conditions, and prices at their time of sale and how they compare to your home. It also allows you to understand what buyers want and how much they are comfortable to pay for similar homes.
2. Work with market trends
A housing market experiences unpredictable shifts, and you should learn to adapt to changes. The time you decide to sell your home determines if you will set a higher or lower asking price. Understanding if you are selling in a seller's or buyer's market will also determine if you need to lower the price or wait for the market to bounce back.
3. Consult your real estate agent
Your real estate agent can advise you if it is right to cut the price or check other factors influencing the sale. Review the listing with your agent, checking all the factors that can make your home receive fewer or no offers. From there, you can lower the price to meet the market conditions or withdraw your listing and wait for a favorable time to sell.
4. Try the psychological price adjustment hack
Selling a home is sometimes a game of mind, different from what the market says. That means you can play with the buyer's mind a bit to see if you will receive offers on your listing. For instance, to make your listing unique, you can adjust the price below a rounded number, such as $799,000 instead of $800,000. The trick can attract more potential buyers, who will see it as a better deal.
5. Reduce the price only once
It is tempting to make multiple minor adjustments to the price to avoid going into huge losses. Unfortunately, buyers may not notice such minor changes or assume you will lower the price further. To make an impactful adjustment, cut the price only once and decisively after assessing the market. For a better deal, you can reduce the price by 5% of the current listing price to make it more noticeable.
The Bottom Line: When Is the Right Time to Reduce the Price?
The exact time to reduce the price depends on the comparable sales, market conditions, and feedback from buyers and real estate agents. However, according to most experts; recommendations, the best time to lower the price is within two weeks of the initial listing. That is because your house will receive more activities in the first 21 days after listing, and waiting for this period to elapse will make your home less attractive to buyers. Ensure you talk to your real estate agent, check recent sales, and understand the market trends before cutting the price.
