When Should You Reduce Your Price?
You Have To Price It Right…or Don’t Bother
Something dawned on me late last night. I know the light usually comes on in the morning but yesterday was backwards. What dawned on me is that some sellers haven’t gotten the word that they need to lower their price. Last night at 11:30 PM I finished an 8 hour run of 3 BPOs. A BPO is a Brokers Price Opinion requested by a lender.
I noticed when going through the comparable properties that many people do not reduce their price even when their home has been on the market for a long time. One home had been on the market more than 500 days at the same price. Several had been at the same price for more than six months.
Buyers are the ultimate determiners of price. Just because an appraiser, or a Realtor, or the borough thinks it has a certain value…that is almost meaningless. It’s the buyers who call the shots.
Buyers are buying houses, every week, actually every day. They are looking at a lot of houses before they make an offer on one. When they find one they like they will make an offer. By the time a buyer is ready to commit, he knows if the house is priced right or not. Likely he won’t even bother to write an offer if the price isn’t close to where it should be.
So if you are in a hurry to sell, you should price it very competitively from the beginning. Then you should set up a schedule of price reductions if you don’t get an offer right away.
Depending on your price range, and your urgency in selling you should make your first reduction after 30 days. If you aren’t getting any showings at all your reduction should be at least 5%. If you are getting some showings but no one is talking about an offer you might try 1/2 of that or so. That still means a reduction of $7,500 for a $250,000 home.
Then you should evaluate your price every 30 days after that. If you are getting showings, you are at least close to the price. But if you aren’t getting offers, you are still too high.
Some houses are definitely priced right. Just in the past week I have dealt with two offers for more than the asking price, and one that was right on the price. These properties were priced right and they sold. One of them had 4 different buyers competing for it.
The market is active, if your house isn’t active…IT’S THE PRICE!