No seller ever wants to have to reduce the price of their home, but sometimes it might be a necessary step to sell in a reasonable amount of time. Of course, all sellers want to make the most money on the sale of their property, but they can only realistically demand an amount that’s in line with the current market.
If your home hasn’t sold yet, there may be a number of reasons why. In many cases, a price reduction might need to be considered.
Here are a few reasons why you may want to think about lowering the price of your home.
1. Showings Are Scarce
If your home isn’t attracting much attention and isn’t getting many showings booked, there may be something wrong. While it could be any number of things, one of them could be the price. If hardly anybody is visiting your home, the odds of selling are pretty slim.
The first week is when activity should be at its highest. That’s because buyers want to be able to snag a potential property before anyone else does. If your listing isn’t getting much action even during this busy time, there’s a problem. At this point, you may want to revisit your listing price to see if it’s still in line with the current market.
2. There Have Been Lots of Showings, But No Offers
You want to have an attractive listing that will draw in as many potential buyers as possible. But even if your home has had several showings booked, that doesn’t always mean that the offers will quickly follow. If you’ve had a number of showings on your home with no offer, there’s an issue.
Sure, it could be that buyers have discovered something wrong with the home or were not keen on the layout or decor. But it could also be the price that has them turned off. While your home may have been attractive enough to view it in person, the price may be a hurdle that buyers may not be willing to climb over if it’s too high. Listing agents will typically speak with buyer agents to find out what turned buyers off, and quite often it’s the price.
The last thing you want is to allow your listing to become stale. If your home has been viewed by many buyers but you haven’t gotten an offer yet, you may want to think about lowering the listing price if appropriate.
3. You Need to Sell By a Certain Date
If you’re highly motivated to sell but aren’t getting any offers as soon as you expected, reducing the price might be an option. There may be several different reasons why you have to sell quickly. Maybe you’ve had a job offer that’s relocating you to another city and you need to move right away. Or perhaps you’ve already bought another home and it closes soon. Whatever your motivation, selling your present home in a short time period may be difficult at your current listing price.
Speak with your real estate agent about the possibility of lowering the price in order to garner more attention and sell sooner rather than later. It may be worth it to reduce the price in order to keep things more streamlined and stress-free, especially if you’re on a deadline to sell.
4. Other Similar Homes Are Selling a Lot Faster
If you notice that your home has been sitting on the market for a lot longer than other similar homes in the neighborhood before selling, it could be your price that’s stalling the process. You should find out the average number of days on the market (DOM) for homes like yours in your area.
If, for instance, that number is 20 and your DOM has already hit 40, it may very well be the price that’s preventing you from selling within a shorter time frame.
5. Your Home Needs Updating and Repairs
If your home is in need of a little TLC and your price doesn’t really take into account the money needed to bring it up to par, a price reduction may be warranted. Buyers are going to account for any expenditures needed to make repairs or updates to your home and will likely factor that into their offer price. Any issues with your home will be noticed by buyers and will influence what they believe your home is actually worth.
If you’re not able to make these updates yourself, your price should be set accordingly to make up for what buyers would have to spend themselves. Maybe you initially thought that your price reflected the required updates, by perhaps not accurately enough. Don’t forget that many buyers are looking for move-in ready homes and will likely reduce their offer prices when looking at properties that require some improvements.
6. The Market Has Changed
The real estate market is always changing, and some markets move faster than others. Perhaps the price you initially listed at accurately reflected the market at that time, but maybe things have changed since then. It might be worth it to take another look at the current market and see how your home’s value has potentially changed.
If there’s been a slight decline in real estate in your area, you made need to tweak your listing price to reflect that.
The Bottom Line
The listing price is one of the most important factors in selling a home. An accurate price will help bring the most attention to a property and generate interest in it. That being said, there may be times when a change in listing price is necessary, especially if a home is not selling in a reasonable amount of time.
Consult with your real estate agent about the possibility of lowering your price. Your agent will help you decide whether or not to reduce it, and by how much in order to realize a successful real estate transaction.