Real Estate Blog

When To Reduce The List Price Of Your House?


System - Thursday, June 4, 2015

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Is your home not selling?  Have you been on the market a few months and either not getting showings or not getting offers? Maybe it is time to consider reducing the list price of your house. Here are some things to think about. 

Many homeowners put their home on the market in the Spring, anticipating a move in the Summer and being settled into their new home for the Fall school year.  But sometimes things don't work out that smoothly and your home does not sell quickly. Is it time to reduce your price or consider another "correction"?  Let's take a closer look.  

When to reduce the list price of your home

Have you had at least 10 showings with no offers?  10 showing in a hot market can happen in 2 days and in a slow market can take 3 months.  Don't worry about the time frame.  If 10 different parties have physically walked through your home and taken their valuable time, you need to pay attention to what is and what is not being said.  

Let's break it down - That means that at least 10 parties know about your home, like what they see from an exterior drive by or from the internet photos, take valuable time out of their day to physically walk through your home but something stops them from making an offer.  It is as if they pick the product off of the shelf but put it back.  They do not take it to the cash register and you need to find out why. Very rarely do customers tell you why they don't buy a product so you have to do some "connecting of the dots" yourself.

Is your house too expensive compared to similar ones in the neighborhood?

It may be too much money compared to similar homes. Let's face it, there may be other homes that meet their needs that are a better value. I know you love your home and think it is "the best house in the neighborhood" (we hear that a lot) but if there are comparable homes, i.e., it is a 3 bedroom, 2.5 bath town home that is 5 years old, you have to be priced competitively and realistically.  

>> See What Is My Home Worth?

>> See Is Your Home For Sale And Not Selling? Time To Rent It Out!

What condition is your home in?

Your home may need sprucing up or updating.  Sometimes homes just look tired and need a facelift.  Buyers today want turnkey homes and, yes, I know that buyers can repaint and replace carpet but, frankly, they don't want to and they don't have to.  Buyers today are not handy, don't want to fix anything, and don't have the cash after closing to do repairs.  Buyers want the homes to be turn key and all updates to be built into the price so they can finance it.

So, is it mandatory to spruce up your home?  No, but your price needs to reflect that you are passing this expense, risk and hassle on to the buyer.  Be realistic in your pricing to reflect the condition of the home.

>> See Help Sell Your Home With Staging: Interview With Home Stager Joy Waida

Location, location, location

It may be the location, the neighborhood, the neighbors, the view or something beyond your control.   Either way, you may have to reduce your price to take into account a less then desirable neighborhood, messy neighbors, a dysfunctional homeowner's association, new roads or construction cutting through the community, or the like.

These circumstances do affect a buyer's desire to buy your home and your pricing needs to reflect it. Remember, these buyers do have other options and you need your listing price to be competitive. 

Be Realistic With the List Price of Your House!

Am I saying to "give your home away"?  Absolutely not.  We believe in marketing your home to its maximum, syndicating it to a variety of websites, taking excellent photos, making your home accessible, staging it and being as aggressive as possible in pricing and negotiations. However, we do need to be somewhat realistic and if  you have had at least 10 showings, the market is "speaking" to you. 

"But no one has said that my home is overpriced?"  I know.  Buyers won't say this.  They will just say, "No. That home just does not work for me.  I think I can do better."  And they will keep looking for a home that connects with them on a more emotional level.  And, if inventory is high and there are comparable homes, buyers will compare your home to others and keep looking until they find the home that feels right.

>> See How To Prepare To Sell Your Baltimore Home: 10 Point Planning Checklist

Look at your home through the eyes of a home buyer

In some ways, sellers are at a disadvantage because they don't really know their competition. Yes, sellers see similar homes online but they do not often go on a tour as if they were a buyer and look at 5 similarly priced homes in one day so that they can comparison shop.  

In the absence of actually seeing the competition, a seller should definitively listen to his or her real estate agent and take her pricing advice.

>> See Not Sure Who To Trust In The Real Estate Business?

Pick the right listing pricing strategy

I know that pricing is confusing, especially if the recent comparable homes support your pricing.  But make sure you are looking at recent pendings, not actives.  And you have to look within a tight time frame and a tight geographic area.  Sales from 6 months ago are already too old in our fast moving market.  

We look back 30 days and, if we can't find enough numbers, we go back another 30 days until we have enough information to provide sound pricing advice.  Pricing is not an exact science, it does have some trial and error, but we have been pricing homes for over 20 years. We keep our finger on the pulse of the market, share lots of information among our team and are not afraid to give our opinions and tell you what we think you have to hear, not necessarily what you want to hear.

>> See How To Price Your Baltimore Area Home? 3 Strategies

So if your home is not selling, give us a call. Let's see what the problem is and strategize some different solutions for you so that you can move on to the next chapter of your life.


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