When deciding if it is time reduce your home sales price, many factors will have to be evaluated. The current state of the local market is one. Another is the feedback that has been received from recent showings, as well as how many days the home has been listed on the market. Also, has the home had any offers that were turned down?
When homes are listed on the market, a good real estate agent will keep track of the feedback received after each showing, and use that to make recommendations to the sellers. If a lot of the feedback you are receiving from showings indicates that the price is too high, this is something that should be taken seriously. Furthermore, if the days on market for the home listing is becoming longer than the average days on market for each sold home in the area, that is another indicator that the price needs to be reduced.
It is also important to consider if the local market is currently slowing down and more inventory is accumulating. If so, it could be turning from a sellers market into a buyers market. When deciding to reduce the price in this scenario, you will want to get ahead of the curve so that your home sells before the market goes down. Therefore, it is important to reduce the price by the proper amount.
If the decision has been reached to reduce the home price, you will now have to decide how much it should be reduced by. If the home was not purposely overpriced, and was priced according to other comparable sold homes, the rule of thumb is to reduce by 5%. The 5% rule also assumes you have not had any recent offers that were turned down. If you did have recent offers, the price of the offer could be indicative of what current buyers are willing to pay for your property, and should be considered when adjusting the price. If the home was purposely priced above what the other sold homes have been selling for, then you should reduce the price to what the other homes have been selling for in your area, if not slightly under that value.
In many scenarios, reducing a price will increase the showings and competition amongst buyers to get the property. A proper price reduction should result in an offer or multiple offers for your home. If it does not, you will need to further evaluate the home for any major reasons why buyers are not interested, as well as the original pricing recommendation to look for inaccuracies.
Additionally, a price reduction does not mean that you should expect to get lower offers. Keep in mind that real estate pricing is transparent. When a buyer purchases a home, they usually work with a real estate agent who will inform them of what the true value of that home is estimated to be. As a seller adjusts their price closer to what the market will bear, the gap between what the buyer wants to pay and what the seller wants to accept will narrow, thus resulting in offers that could be at asking or close to it.
To give an example; One of our recent listings was sitting on the market without offers. It had already surpassed the average days on market that a home takes to sell in our area. A decision was made between the seller and ourselves to reduce the price. Once we reduced the price, we ended up receiving multiple offers, and the home sold at the newly reduced asking price.
Properly pricing a home is a very important aspect of the home selling process and should not be taken lightly. The wrong price will have a negative impact on your home sale, and could result in a financial loss. Therefore, it is important to hire a professional Realtor when deciding to list your home for sale. Feel free to contact us here for further questions. If you’re not at that stage yet, but are interested in an estimated value for your home, visit our instant market analysis page here: https://avallonre.com/nj-home-value/.