When To Reduce The Price Of Your Home For Sale
Most home sellers want to get the highest possible price for their home. However, sometimes the best possible price you can get for your home is not as high as you may have hoped. It's important to remember that any home on the market is only truly worth what buyers are willing to pay for it.
If your home sits on the market for a long time and you need to sell, you will have to reduce the price. How do you know when to drop the price of your home?
Many variables have to be considered, so the answer isn’t always obvious. However, there may be signals that you have priced your home too high. Here are 7 reasons you may need to reduce the price of your Columbus home for sale.
1. Low Activity
Not having enough interest in the home is an indicator that the price may be too high. Assuming you have properly prepared and marketed your home, you should get showing requests as soon as it is listed.
The first couple of weeks after your home is listed should be busy. Home buyers want to see homes as soon as they go on the market so that they have an opportunity to buy the home before someone else does.
If the price is too high, people may not even schedule showings to see your home. This is why it is SO important to properly price your home when it is listed. Take advantage of the momentum of being newly listed with a price slightly below market value. This will help you sell faster for more money due to the auction effect (aka endowment effect).
2. Time Is a Factor
There are many situations where you may need to sell quickly. Maybe you have already picked out a brand new home but need to sell your current home ASAP. Or, maybe you’re going through a divorce or job change.
Depending on your situation, it may save you money in the long run to reduce the price of your home and sell quickly.
If you need to sell your home fast, you may want to be aggressive in your price reductions.
3. Getting Showings, But No Offers
It is possible to have initial interest in the home, but no offers. If your home is getting attention but buyers aren’t making offers, the price may be part of the issue.
In this case, it’s important to listen to feedback from showing and look at your home and the price with a critical eye. It may be that buyers are coming to see your home, but once inside they don’t think the features or condition match the price tag. There may be something about the home or lot that isn't obvious until people physically see the property.
You will want to have a candid conversation with your real estate agent to determine if lowering the price will make the home more attractive despite whatever the possible issue is.
4. Updates Or Repairs Needed
If you have lived in your home for a long time, but you haven’t done any updates or upgrades, you may need to reduce the price accordingly.
Ideally, you listed the home with a competitive price to reflect repairs that may be needed. If you didn’t, though, you may need to reduce the price or consider making the necessary repairs or updates. It’s easy for home sellers to underestimate how much the price of their home needs to come down to offset the cost of repairs.
Buyers don’t generally respond well to dated homes or needed repairs, and they often overestimate the actual cost of remodeling or repairing a home. Most buyers want a home that is move-in ready. They struggle to see themselves living in a home that needs work, even if it's just cosmetic stuff that's easy to fix. That's why it's better to go ahead and paint the home, for instance, before you list. It's easy to do and will make the home more appealing.
5. Changing Market Conditions
Columbus real estate market conditions can vary considerably by neighborhood, price point, and season. It is possible to have priced your home fairly when it was listed, but a declining market may force you to reduce the price.
For instance, if other homes in your neighborhood sold super fast at a great price in June but you're selling in November, it's important to understand that seasonality may require you to be more aggressive in lowering your price.
This is when it’s extremely important to have an experienced real estate agent at your side. They can look at trends and help you avoid stagnating in a declining market. A listing agent who specializes in selling homes in your specific community will have the nuanced experience required to do correct comps.
6. Your Price Came From A Poor Source
If you priced your home based on a “Zestimate,” bad advice, or simply an inflated idea of your home’s value, you may have started out with a price that was too high.
The hard truth is that your home is worth what home buyers are willing to pay at the time that it is for sale. Buyers don’t care how much you paid for it. They don’t care what online estimates say the home is worth. They don’t care if you hired an agent who told you what you wanted to hear regarding the price of your home.
Home sellers who fall victim to bad pricing advice will need to quickly adjust the price to reflect the home’s realistic market value.
7. Your Home Did Not Appraise
It is possible, especially in a market with quickly rising home prices such as we experienced in 2021, to sell your home for too much money.
When a home doesn’t appraise for the sale price agreed to by the buyer and seller, there are steps to take to fight the appraisal.
If you or your agent have done everything possible to fight the low appraisal, then it may be time to consider reducing the price of the home or other methods of dealing with low appraisals.
When The Price Is Right!
A common misconception is that you should price your home higher to leave room for negotiation. The truth is, this could not be more wrong. Often buyers simply won’t even look at homes that are priced too high. In fact, it’s sometimes better to price a home a little lower to encourage a bidding war.
It’s important to price your home correctly when you list it. Pricing your home right the first time will save you both time and money. Homes that are priced too high will take longer to sell, and buyers wonder what’s wrong with homes that have been on the market for a long time. Then, the lowball offers start to come in.
If you need to learn more about correctly pricing your home, call Columbus Ohio real estate expert Rita Boswell at 614-830-9767 today.
Start With An Accurate Home Valuation
If you're thinking about selling your home soon, get an accurate home valuation estimate to determine a realistic price range for your home. An accurate home valuation requires an expert to physically see your home and discuss it with you. But, you can start the process online with a quick estimate.