An article in today's Washington Post, "When Cutting the Price, Take a Big Bite, Not a Bunch of Nibbles," puts forth the premise that, when considering making price cuts to your listings, you consider one BIG cut as opposed to several little ones--even though you may eventually wind up at the same price.
The theory is that big cuts make far more of a splash than little ones and are more likely to catch the attention of other agents and potential buyers.
I can vouch for the truth to that. I have two higher-priced listings: the first started out at $799,000 and the second at $709,900. Both are beautiful homes that two years ago would have been snapped up at these prices. Both sets of sellers have exactly the same back-story--they built these beautiful homes with the intention of someday retiring to them. Both sets of sellers then, because of health or family reasons, opted to stay put in their primary residence. Both homes were beautifully built with no expense spared.
The $799K listing languished for months with very little showing activity. Each time I spoke with the owners, I would gently suggest that we'd get more showings if we came down in price. They wanted to wait. After all, they loved this home and thought surely someone would come along who saw the value in it and would love it as much as they did.
Finally, after several months with nary a nibble, the owners were ready to consider price change. They called me and asked what it would take to sell the house. I took a deep breath and told them: Reduce the house to $625,000! I explained to them what was selling at what price points. The sale of higher end homes had come to a virtual standstill, unless they were on Lake Blue Ridge or the Toccoa River. Their home was neither, although it does have amazing views of the lake and surrounding mountains.
After a moment of shocked silence, the owners agreed to reduce the price almost $175,000!!! Within weeks of dropping the price, we had a serious offer on the property and are scheduled to close (fingers-crossed!!) on September 5th.
The second home that I had listed at $709,900, also languished. Again, I recommended a price cut to the owners. They did agree to a $10,000 cut, but it did not have an effect on viewing activity. Because we have talked about it a lot, and they have received regular market updates, they know that they would need to come down in price dramatically to hope to sell in this market.
They are going to come into the office this week and talk about what they want to do. They are simply not ready to drop their price much more than they already have--and I can understand that. I believe they are leaning towards taking the home off the market until sales start to pick back up. In lieu of a deeply discounted price, I think that would be a very wise decision.
Bottom Line: If you hope to sell now, you must be extremely aggressive with your pricing. This market is not for the faint of heart. The alternative is waiting until the market picks up before you put your home on the market.
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