With mortgage rates at higher levels these days, more sellers are being forced to reduce their home price in the current market. In any housing market, determining the appropriate home price when listing it for sale can be a daunting task. Pricing it too low and you could potentially leave significant profits on the table. Pricing it too high and you could potentially deter many buyers from even viewing your home. This can quickly result in a stale listing. Should this happen, you will want to check out our article titled How to bring a stale listing back to life. We discuss a few things to consider when thinking about employing a price reduction for your listing.
Tips for reducing your home price
Determining your initial home price when listing it for sale is a true science and should be approached as such. In fact, the first week on the market is critical for any new listing. Of course, sometimes even the most thorough and objective approach to determining your listing price can still result in no showings. Although this is not a fun subject for sellers to think about or discuss, it is not an uncommon situation to find yourself in. Here are some things to consider with your home price:
The local market
The first thing you need to do is research the local market. What are other homes in your area selling for? What is the average days on market? This will give you a good idea of what price range you should be targeting.
The condition of your home
If your home is in need of repairs or updates, you’ll need to factor that into the price. Buyers are less likely to pay top dollar for a home that needs work.
The amount of inventory
If there is a lot of inventory on the market, you may need to price your home lower to be competitive. On the other hand, if there is a shortage of homes, you may be able to get away with pricing your home somewhat higher.
Your personal circumstances
If you need to sell your home quickly, you may be more willing to lower the price. However, if you’re not in a hurry, you may be able to afford to wait for the right buyer.
When to reduce your home price
So, how long should you wait before reducing the price on your home? Most experts recommend waiting at least two weeks after listing your home before making a price reduction. This gives you enough time to get some initial feedback from buyers and see if there is any interest at your current price. If you’ve been on the market for two weeks and you’re not getting any offers, or if you’re only getting low ball offers, it may be time to consider a price reduction. Of course, consulting with your real estate agent and analyzing your local market will be critical.
How much to reduce your home price
How much you should reduce the price by depends on the local market and the condition of your home. However, a good rule of thumb is to reduce the price by 10-15%. This will give you enough of a discount to attract buyers, but it won’t be so low that you’re leaving money on the table.
Developing a home price reduction strategy is certainly not a fun topic of discussion for any home seller or listing agent. With this said, it is important to have these difficult hypothetical discussions when embarking on a marketing campaign to sell your home. Just as with developing a pricing strategy, developing a potential price reduction strategy is equally important. As always, hiring a local and knowledgeable real estate agent will be paramount to your success when navigating a home sale.
Are you thinking about selling your home in South Florida? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your smartphone or tablet!