When Should You Lower the Asking Price of Your Home?

By The A-Team | Oct 16, 2017 | Seller Advice

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In a buyer's market, it can be difficult to sell a home. While you can't control the market, there are a few things that you do have power over, the principal one being your asking price. It's not something many sellers would like to do, but sometimes it's the best course of action. Here are a few signs that you might consider reducing your asking price.

One of the most blatant signs that something is wrong is a high amount of interest in the home, but a low amount of offers. You might get a lot of lookers at your open houses and showings, but no offers. In that case, lowering price is likely a good idea. A recent article from Houston Neighborhoods demonstrates that a lack of offers doesn't always mean a lack of interest:

High traffic but no offers

Yes, you’re not getting any offers for your home and that’s obviously a clear sign that no one’s interested, right? Not exactly. You should definitely dig deeper when you get high traffic during open houses and private showings and you have yet to receive an offer. High traffic indicates that people find your property appealing but the asking price is simply too high.

There are also cases when there are no scheduled showings because local brokers think the property is overpriced and are not showing it to their clients. Real estate agents suggest that you should reduce the selling price if a month has passed without a scheduled showing. Via Houston-Neighborhoods.com

Overpricing is most likely why traffic isn't doing you any good. This is why it's worth reducing the price: if offers start coming in, you know you've made the right decision.

Deadlines are good reasons to lower your asking price

If you're selling your home because you've been transferred to another location by your employer, or any other time-sensitive event, it can be difficult to sell your home at the price you want in time. Lowering price will generate the interest needed to sell the home before it's too late:

You have a deadline

Home not selling? That could happen for a number of reasons you can't control, like a unique home layout or having one of the few homes in the neighbourhood without a garage.

If you’ve got to sell soon because of a job transfer or you’ve already purchased another home, it may be necessary to generate buyer interest by dropping your price so your home is a little lower priced than comparable homes in your area. Remember: It’s not how much money you need that determines the sale price of your home, it’s how much money a buyer is willing to spend. Read more at yournorthgeorgiarealtor.com

When you just need the house sold quickly, it's advisable to consider lowering price, especially if your house is more expensive than other homes in the neighbourhood. That brings us to the next point.

Before listing, it's worth checking what other, similar homes in the area are selling for, or have sold for. There's little reason for buyers to choose an expensive version of the same house, and in a buyer's market, they have the benefit of choice:

Lower Prices for Comparable Properties

No matter when you put it on the market, if there are a lot of listings of similar properties with lower prices, you should rethink your price. If you are in a rush to sell the property, lowering your price will keep you competitive. However, if you aren’t in a rush, just let the price sit where it is and let the competition sell off (although, waiting for this to happen may take many months or even years).

If the area you’re selling the home in is experiencing a lot of new home construction at lower prices, you will probably not be able to wait out the market and be forced to sell at a lower cost. For example, if a buyer is looking at a brand-new home with the same features as yours with a lower price point, why would they choose the older and more expensive version? h/t amongtech.com

If the difference in price is just too high, it's unlikely the house can sell at that price point. In that case, we recommend lowering price, or simply waiting for the market to improve (which could take a while).

Overpricing is just one reason why a house may not sell. Sometimes, with the right marketing, reducing the price may not even be necessary. If you're looking to sell your home at the price you want, contact us at the A-Team.

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