How do I Know when to Lower My Asking Price?

Selling your home is a big decision and the process isn’t necessarily easy. You have to do much to prepare the property for sale. This includes decluttering, depersonalizing, deep cleaning, and furniture staging. In addition, you’ll have to make repairs to anything that’s broken and refresh the curb appeal.

Of course, you do all this preparatory work to get the biggest return on your investment. You want to get a solid purchase offer quickly to sell your home in a short time. While it might be unnerving, you should know there’s a lot that can make the process last longer. The home inspection could uncover one or more problems, the title search might reveal defects, or, the buyer’s financing falls through. Another common reason a home doesn’t sell is because it isn’t priced correctly.

How do I Know when to Lower My Asking Price?

The reason why setting the right asking price is so important is because it establishes the seller’s credibility. If you try the trick of pricing it just over market value, in order to have room to negotiate, your property will receive little buyer attention, simply because the price is high. In addition, homes priced above its true market value stay listed for longer periods of time. The longer it’s active on the market, the more expectation the price will drop.

Hopefully, you interviewed more than one agent to get their marketing plans and marketing analyses before you listed your property. Some agents will have different strategies for price setting. Some will base their recommendations on comps; meanwhile, some will recommend sellers list lower than market value to generate multiple offers. In the end, these recommendations are just that: recommendations. As the homeowner and seller, the ultimate list price is your decision, but make it an informed one. —San Francisco Chronicle

You should also know that homes which are on the market longer than the local average become “stale.” By sticking to a higher price, buyers’ agents will avoid these and homebuyers themselves will wonder why it’s been on the market so long. While there are factors you cannot control, such as the location, local market conditions, and your competition. However, you do have complete control over the asking price. So, you should recognize the following signs which tell you to lower your listing price:

  • Real estate pros aren’t bringing clients to your home. When a home is priced right or even just below market value, buyers’ real estate professionals will schedule tours to show the property. However, if the pros aren’t contacting you, it’s because they know the home is over-priced and probably think you won’t be open to reducing the price.
  • Comparable properties around yours are selling quickly. This should be an obvious sign, but it’s something that does get missed. Pay attention to comparable homes on the market around yours. When they sell, look at the final agreed price.
  • You home’s listing has exceeded the local days on the market. While mentioned above, this definitely bears repeating. You can easily find the local average days on the market on the internet. If your listing has exceeded it, the price could very well be the reason.
  • Every purchase offer you’ve received (many or few) are all low-ball figures. If you’ve received some purchase offers, but every one was low-ball, that’s an indication the price is too high and prospective buyers are targeting the lower end of the true market value.
  • You’re hearing positive feedback about the home’s location, size, and features, but nobody is taking action. When you hold an open house, be sure to listen to what’s being said. If you’re receiving a lot of compliments but offers aren’t following, it’s because the people who saw the home liked it, but know it’s over-priced.