Selling a home has to be approached with a strategy in mind. It's not easy to always have the mindset that there is a strategy involved when the process can take weeks if not months. But there is a strategy to selling a home. One of the parts of the strategy includes price reductions.
Price Reductions and The Strategy
Some sellers just want their home sold. Others hate the thought of a price reduction because of the lack of available equity in the home which means that they end up losing money on the home. Whatever you stance may be, it's important to consider how price reductions can be used as part of the strategy to help sell your home.
The important first step in the strategy is pricing a home right before it goes on the market. But sometimes, because the seller is not comfortable with starting out so low, or because the market has shifted, or some other reason, price reductions have to be used. In a situation where a home has been on the market for a period of time and received no showings, it's a sign that the market does not support the listing price and it is time to employ price reductions.
Price reductions generally are based on whatever it takes to get your home in a new price category. When an individual goes to search on a search engine such as Trulia or Zillow, the home has to be in a new category in order for it to be effective. For instance, if a home is priced at $146,000, a $5,000 price reduction would reduce the price to $139,000 and would then put it in the category of homes that people are looking at between $130,000 - $140,000.
Putting your home in a new price category via a price reduction introduces your home to a new category of buyers and effectively puts your home "back on the market". This is why price reductions can be such a useful piece of the strategy in selling your home.