In a regressive housing market like the one we are experiencing today, sellers can find themselves chasing the market in reverse. What I mean is, they keep lowering the price of their home and still no one buys. They just can’t catch the market.
Let me illustrate with a REAL LIFE example.
Seller originally lists 9/13/2006 for $310,000.
30 days later lowers to $299,900 (10/13/2006)
55 days later lowers to $290,000 (12/7/2006)
Keeps this price until 2/12/2007)
Relists home at $294,900 (2/13/2007)
10 days later lowers to $289,900 and offers incentives.
80 day later listing expires.
Relists home at $279,900 (4/27/2007)
45 days later listing expires (6/12/2007)
Relists home at $269,900 (6/15/2007)
46 days later lowers to $259,900 (8/1/2007)
Total market time (so far) is 338 days.
The asking price has fallen $50,100. This is a 16% price reduction. Add selling costs of around 5% and this seller is facing 20%+ on downside.
Today, this home is still for sale. The local housing market is worse then it was on 9/13/2006 when this home first listed. Will the seller sell? Give me your thoughts.
History is always much clearer once it’s past. However, if you’re selling in a down market and truly intend to sell, you better run to the front of the selling line with the best price possible. This way you can be more sure that you’ll attract the next ready, willing and able buyer for what you’re selling.
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