Do price breaks work I was asked by my client today as we discussed this action on his multi-million dollar property? Preparing for the meeting took time. I needed to research all the listings in this area of similar type and style. My property is an upgraded older home. It is not a gut rehab and it is not new construction. Appraisors use 17 methods to determine price, most agents hit the CMA button. Pricing is both a science and an art. The science part is looking at sold properties within a third of a mile sold within the last 3 months that are no more than 10% different in a variety of characteristics. Size, lot size, age of the house, bedrooms, bathrooms, garage spaces, construction and architectural style and more are considered. Finding something that is a perfect match is not easy with these stringent guidelines.
So what happens is that we look at other properties and give plus and minus amounts for the differences. We are sneaking into the art side of pricing, but not really there yet. The art side is when your client asks you after looking at all the data and seeing that the break you are suggesting will really only drop your price below just one of the competitors. They will ask why have a break at all if you don't go much lower.
The very difficult reality to explain to a nuts and bolts client is that sometimes the nuts and bolts don't matter at all. We are shaping the story of the house inside the market to let the market know you are paying attention and wanting to shout that you are still ready for the Buyer. This is the Art part, it isn't about the actual amount, it is about the appearance of how these changes affect the Buyers. A price change says, come see us. A price change says we want to sell. A price change says here is the deal for you. Price changes are always triggered when a property is getting a lot of activity and no offers. It is time for a price change, Do Price Breaks work?