When To Consider Reducing Your Asking Price

High demand and low supply have made it a seller’s market pretty much all over the country, and especially for lower-priced homes. That does not mean every house will sell or sell quickly. Price is still important, especially as some markets begin to overheat.

The low number of listings has made the market more competitive, pushing prices higher at a fast clip. Nationally, prices are up about 7 percent from a year ago, and in the hottest markets they are up double digits. Still, a house can be overpriced, and today’s savvy house hunters can smell an overpriced house a mile away.

If a listing is overpriced and sits on the market for too long, it gets stale. Potential buyers will see the time on market and click past your listing, often without even looking at it. That is why it is best to lower your asking price before your listing hits the stale stage.

There is, though, a change in the air as home prices have hit a tipping point in affordability. There is only so much buyers can handle after a multiyear run-up in prices. Of course, every market is different, and some markets may have overheated, while others are still competitive.

The average time on the market for all homes nationally was 34 days in September, according to the National Association of Realtors. That is down from 39 days in September 2016 but markets like Seattle and Denver are still seeing homes sell in just a few weeks.

It would be easy to say that all you need to do is price your house correctly and competitively in the first place, and then you won’t have any problems, but there are several schools of thought on when to be competitive and when to test the market.

If the home doesn’t sell in two weeks, then a price cut should be considered.

It can also be beneficial to reach out to people who may have toured the home first and let them know that there may be a price cut coming. The buyer may make an offer that is slightly above your intended cut.

Once a price is reduced, all listing websites will be able to see that, and some will send an alert to buyers. Real estate agents will also market a price reduction, both on the front-yard sign and the online listing.

While a price drop can bring in more buyers, it can also turn off some buyers who might have been on the fence, fearing that the home is not as desirable as they thought.

Source:  CNBC