“When should we lower or reduce the price of our listed home?”
This is a very common question especially in saturated markets or buying markets and because the market fluctuates and ebbs and flows, it can be a tricky situation to decide when to lower and reduce the price and wind to stand firm. There is a strategy to a price reduction and while not every home needs it, there are some strategies and pass homeowners can take if the home is just not getting the traffic they want.
Every seller expects to sell their home quickly and while as a real estate broker it is my job to determine the best market price for the home, it is ultimately the seller’s decision at what price to list the property. Sellers can be stubborn, even if they don’t need the highest profit they’re asking for. However, many sellers need a certain bottom line and that may or may not be the price at which the home sells. Nearly 13% of homeowners reduce the price of their home at least once and it’s important to know that the longer a house is on the market, the lower the odds of selling for list price. This is just the reality so this is why it is crucial to price it correctly from the beginning.
Homeowners/sellers who accept an offer within the first week of listing have a 57% chance of selling for list price, obviously so. During week two, that number drops to 50% and in consecutive weeks drops to 39, 32, and so on. Of course, this is national data so it really makes a difference on the micro-neighborhoods and communities of particular areas. For instance, for Mesa, the median list price is $339,945 as of the publishing of this post. The median days on the market is about 40 but the list price to sale price is only at about 98%, this means that 98% of properties sold at or above list price, which is a great statistic for our area right now. The average sales price was $273,000 with about 1021 homes sold over the last six months.
At the end of last year, the median list price versus sold price was extremely close. There is about a 97 to 99% asking price to close price.
Related: Should you sell to a cash home buyer?
This is great news for sellers, However, one of the biggest pieces of advice I can offer is to listen to your real estate agent. We don’t just want to sell your home and give it away for any old price just to get it sold. As your real estate professional, I want to make sure you walk away with what you want and need from the house and fill confident about the sale.
I can’t tell you how many people we’ve sold immediately because the market was great only to have the homeowners think they’ve sold for two low. This is not necessarily the case. Just because the home sells right away doesn’t mean it was priced lower than market value. I do a lot of research on properties to find the right starting point for the home. What worked last month for someone else may not work this month for you. Everything changes and we gauge the market carefully to determine the right day to list the property, the right month, and the right price for what the market is currently doing.
When to reduce the price is really something you need to discuss with your real estate agent. It also depends on your motivation. If you’ve already submitted a contingent offer that’s been accepted somewhere else you have more of a motivation to sell faster than someone who can sit on the market for a little bit longer. Motivation, timing, and what you need out of the home all determine the right pricing strategy.