When You Should Reduce Your Home Price

Posted in General Blog | 27/11/2012

Windsor Home

Windsor Home

This is the talk that no real estate agent wants to have with his or her client.  When a home is sitting on the market, it may be time to take a closer look at the home price.

When a home doesn’t sale, it could be for a number of reasons.  Some things, a seller has no control over.  Such as the layout, the location or maybe there are too many homes for sale in your neighbourhood that are priced more aggressively.

Regardless, the one thing you can control is the price of your home.  And while we have yet to meet any seller who is eager to reduce the price of their home, this very well could be the time when this needs to happen.

No Lookers:

Once you put your home on the market, this is where you will find the most interest because buyers want to see it before anyone else.  If few buyers have called to make appointments, then buyers may think it’s overpriced. If your home is properly marketed, with lots of online presence and signs, yet you still don’t have anyone looking at you home, the word may be out that the price is too high.

Lots of Lookers but No Buyers:

If your home has been overwhelmed with potential buyers, and yet not one offer has been made, then something isn’t right.  Most buyers listen to their real estate agents, so what are they hearing?  Your agent should have some insight, particularly if you are receiving valuable feedback from showings.  Agents don’t want to take their clients to an overpriced home as it wastes their time with so many other homes on the market.

How many days on market?

While no agent can give you an exact figure on when your home will sale, he or she should be able to tell you how long the average home in your neighbourhood with your price range sits on the market.  If the average time is 30 days and you are headed toward 60, then your price may be the reason.  Buyers tend to stay away from homes that have been sitting on the market.  They assume, often correctly, that something is wrong with the property.  This can delay a sale even further.

Deadline:

If you must sell your home within a specific time frame, consider dropping your price so your property is priced a little lower than others in your neighbourhood. In this scenario, you could be inviting a bidding war, as buyers who notice a good deal, are more than likely to make their best offers.  Remember:  your home is worth how much money a buyer is willing to spend and not how much money you need.

Too many repairs/upgrades:

This is something we have seen quite often based on today’s economic climate.  Many sellers just don’t have the cash to make the necessary repairs or improvements to sell their home.  If you have a roof that needs repair, or several rooms that need a fresh coat of paint, then you may need to lower the price of your home to reflect that it doesn’t show as well as other homes.

Competition:

If it has been weeks where not a single offer has been entertained, then it’s time to check out the competition.  Remember, new homes come on the market all of the time, so what new listings have been added since you put your home on the market?  If newer homes that are similar to yours are priced well below, then your price may be too high.

Considering a price reduction, while painful, should be viewed in a few ways.  Are you prepared for your home to sit on the market while you incur:

Monthly mortgage payments

Utilities

Home insurance

When pricing your home too high, buyers are not fooled.  An educated buyer will know the comps in your neighbourhood and chances are, if they don’t, their agent will.  Again, the longer it sits on the market, the less attractive it is to the marketplace.  If your home is priced right from the very beginning, you will create great word of mouth, traffic of potential buyers and will likely have a sold sign in your front door sooner rather than later.  So be wary of overpricing your home.  And for a quicker sale, make sure that not only is the home priced correctly, but that you do the following as well:

Make your home available for showings

Keep the home spotlessly clean

Declutter

If you have been deciding whether or not to sale your Windsor home, now may be the best time as the market picks up.

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