As a home seller, you want to net the highest possible price for your property. However, as the real estate market is constantly fluctuating, it may mean that the ideal listing price changes. Occasionally, by reducing the listing price, sellers can ensure that their property is comparably priced against similar homes to be in front of the largest pool of poten-tial buyers. This helps ensure consistent showings and can encourage multiple offers to bring a higher sale price than would be otherwise gained without a price reduction.
So, how do home sellers know when it is time to consider reducing the price? First, consider the number of showings and offers you have re-ceived. As a general rule, if your property has been on the market for 30 to 40 days with no showings or offers, you are either in a market with a small buyer pool (such as for rural properties in the $1,000,000 or higher range) or you may be priced higher than comparable properties. One way to determine the latter is by reviewing your weekly UMP (Updated Market Position report) and determining how your property compares to similar listings.
While not all the listings in an UMP will be perfect comparisons, the price of these properties and the number of comparable active listings will give you an idea what properties are in competition with your listing for the potential buyer pool. Those properties on your UMP that recently went pending or sold are the homes that won a potential buyer over your property. That may be due to any number of factors, from location to floor plan and lighting, though price is often the major deciding factor.
Additionally, some properties may require major repairs that detracts potential buyers from pursing the property further. However, investing in a major repair may not be the best option for every home seller. These sellers should consider adjusting the listing price in lieu of a costly repair to regain a larger pool of potential buyers.
When the market slows, such as during the winter months or during a market slump, there are simply less buyers looking for a new home, meaning that the sell period for any property on the market during this time will be longer. Depending on a seller’s circumstances, reducing the price at this time can help a home sell faster as long as it is competitively priced against similar properties that are active on the market.
For sellers that aren’t able to be as flexible in their home’s sale price, staying at the same price may mean less showings. However, with pa-tience regarding a slower showing season, by remaining active on the market these properties can still net a serious buyer when there is less competition amongst active listings. If possible, we recommend sellers in this last category to make at least a minor price reduction after 60 or 90 days on the market to keep the listing actively in front of potential buy-ers and to show that you are reasonable and committed to selling your property.
Please do not hesitate to contact us today if you have any questions on your listing price or how to interpret your weekly UMP report. Addition-ally, we are also working on preparing updated current market analysis (CMA) reports for all our active properties to reassess listing price in the current market. We would be happy to discuss the details of your new CMA, whether repairs are recommended or if a price reduction would be in your best interest. Please feel free to call us today at 503-538-4531 for more information!