Lowering the price does cause a faster sale. It also brings more lookers. People want a good deal, a great deal or at the very least, a fair price. Especially these days. Maybe this wasn't the case a few years ago, but it is the case today.

Lower the price. Your issue with a smaller kitchen and smaller family room, plus no breakfast room, warrants a lower price.

You want the good price as soon as you list, not a price reduction after a couple months.

If you aren't sure what to price, hire a certified appraiser. Money well spent.

sweet_tea is right on the money. A couple of additional thoughts:

- ask your agent about how MLS and/or the locally-used agency Web sites break down prices. Around here, people looking on the Internet for houses select a price range from dropdown menus on the Web page. Price your home at $200,000 and you may find yourself missing buyers who selected the dropdown that ranges from $175,000 to $199,999 -- even if you'd willingly give up that buck in an offer.

- you don't say how long you can keep this house on the market. But it would be wise to consider possible outcomes. In our case, we kept reducing the price of our house for over a year without any offers till last month. It was important to show our lender that we were trying to sell the house and were not just trying to hold out for some arbitrary number (not saying your number is arbitrary, but a house that isn't receiving offers is overpriced).

Good luck with your sale! It's a more complex thing than ever these days.

I'm thinking steve o hit the nail on the head with,"It's a more complex thing than ever these days."
There are so many properties on the market, so much to choose from, you just need to make your house SCREAM....BUY ME!!!!!
Clean it so hard you bleed, de-clutter so much that all the rooms look, well, roomy! LOL!
Good Luck!

Sweet_tea

Until recently that is exactly what I thought...lowering the price would cause a faster sale.

Yet...the data doesn't actually seem to support it when I look at comparable sales over the last year. Some who lowered prices sold. That is true. But some who lowered prices didn't sell. Some who didn't lower prices sold after a long time while some who did lower prices sold after a long time. The main difference being that that those who didn't lower their price sold for more money.

I keep looking in the data for the clearcut sign that lowering prices -- in my specific market -- resulted in a faster sale.

Because if that was so then that is an easy decision.

But...the other interpretation from the data is that buyers for the houses of the type I am talking about (custom homes on acreage) are few and when a buyer comes along who wants the specific amenities you have they buy and until they come along the house sits there...regardless of price.

Just today the house across the street from us went from being for sale for the last 3 years to having an option pending. They listed when the market was really good originally. They have dropped their price a lot as the market changed. Their property was very specific and wouldn't appeal to many people (is very horse centered with more acreage than most) although lovely. They did reduce but the last reduction was maybe 6 months ago.

I think it is easy to say that reducing the price results in a faster sale but I'm not sure that is always true...in fact from the data it clearly isn't always true. What I'm trying to figure out is how to make this determination.

Twotogo -- When we had our house on the market we had housecleaners come in to clean it. It was kept spotless. We decluttered quite significantly. We had professional staging. We spent $30k on painting, new carpet, refinishing wood floors, new kitchen appliances, new window coverings, new granite vanities in the master bath and powder room, etc..

I guess there is always more that someone could do but we spent a great deal of money to get the house ready for sale and got a lot of advice on what to do. There comes a point where you just can't afford to put more money into it. And, at this point, the only changes we could make that we didn't make are those that cost more than $10k apiece.

Steve_o - I am extremely aware of how the local MLS breaks down prices on the web. In my case the next break point would be $500k (we were in the mid-$530s when last listed).

Generally, I do think that a house that isn't receiving offers is overpriced. However, I always remember when we bought this house. At that time -- in 2006 in a good market -- the average DOM for a house to sell was over a year in our particular locale. Custom homes on acreage in a semirural area is just not the same as a house on a standard lot in a subdivision.

We did lower our price while it was on the market. By the way, I am not some seller who refuses to lower price. Every price decrease was initiated and suggested by me.

I would be happy to lower the price when we relist it. It is just that I see house after house where price reductions were made and the house didn't sell while I see other houses with no price reduction, higher price per SF (for no apparent reason) which does sell. There just doesn't seem to be much correspondence between the house selling and the price that one would expect.

Sure, any house can sell if a low enough price. If I have a house listed in the $530s (which is a price that compares very favorably to comps), I'm sure I could sell it quickly if I asked $200k for it. However, that wouldn't be very smart of me. There is some point that I can't go below because it would cost me less money to keep the house for X years and then sell it.

I want to sell now as we already own the land where we plan to build our replacement house and we prefer to not build until this house is sold.

Pricing your home right is the key factor in selling your home in a reasonable amount of time. Setting a price too high will make your home undesirable to buyers. Pricing it too low may, in fact, deter buyers who wonder what's wrong with it - or simply not get you a fair price for your property. Now is the time to do your research.

Here is a link that might be useful: How to Sell Your House Fast?

Kats,
The fault with your analysis is that probably the homes that sold w/o price reductions were probably priced correctly from the start... therefore no reduction was needed. And if this is the case, then no causation can be demonstrated. And, you have to assume that the exposure is to the level that it should be for all homes involved in your analysis.
It is too bad that you took your home off the market for a few months... perhaps the buyers that just bought your nieghbors home would have found your home just right. People do buy in the winter, folks!
If the avg. DOM are about two years, those buyers across the street may have been the only buyers that come along for another two years. If your area, and your home criteria, have stats that say one home every two years will sell, and there are 10 homes on the market that match up against yours, then you have an absorption rate of 20 years worth of inventory! Have your new RE agent pull every home that competes with yours, and then determine what the absorption rate is. Then, pile in the car with your agent, and visit these 10 homes. Pretend you are a buyer. After this tour, you and your agent will know what price it will take to make the next buyer choose your home.
You have to find out how many competitors there are going against you, you need to know how many buyers over the next year will come into your market, and then make sure that these buyers have all the reason in the world to choose your place... remember, that buyers do not choose price, the choose value...
Kats, good luck this Spring... I think you are close.

Of course price sells! And sells quickly, if there's enough perceived value. If a condemned house in a garbage dump was for sale for 1K, you'd have a bidding war! It's the same with more spendy properties as well. If the price is low enough, people will overcome their objections to purchase quickly. If your home is priced "right", i.e. at a low enough price, then you'll have that bidding war too, even in this down economy. There are always investors looking for a deal.

If average DOM in your location is 2 years, then selling your home quickly won't be a "profit" situation. It will be "how much am I willing to pay to get out from under this mortgage". Take 2 years of carrying costs and subtract that from a fair market value (which is probably lower than your last listing price), and price it at that. You'll get a quick sale, at the same financial cost to you that you would at the end of two years of waiting for it. It's going to cost you that money either way. It's just that by taking it off the top, you actually get the property sold and are able to move on with your life. You're not "giving it away" by lowering the price dramatically, you're cutting your losses.

One can argue that houses sold without price reductions were priced correctly from the start....yet looking at what sold and what didn't it just doesn't always seem that way. Some of the houses that sold without price reductions certainly appear overpriced to me and some that haven't sold with price reductions seem underpriced.

I would not say that the overall DOM average is 2 years. It is probably more like 7 or 8 months with about 1/3 taking over a year to 3 years to sell.

I am not at all concerned that the people who bought the house nearby would have bought ours. The properties are very, very, very different in terms of amenities, size of house (5 bedroom with guest house v. smaller 3 bedroom), land (that house has 3 times the acreage we have) and how it is generally set up (theirs is set up to really appeal to those with horses).

Live_wire_Oak - Obviously there is a price that this house would sell at tomorrow. However, below a certain price level we would be better off financially keeping the house and living in it and then selling it a few years from now.

I don't think my last listing price was lower than fair market value. I would be willing to list it lower because of the carrying costs. But, if you look at comps on sold houses I was priced very, very fairly, well below average price per SF on sold properties (and no I'm not chasing the market down as prices here are going up, not down).

We are meeting with a couple of agents this week so it will be interesting to see what they say. To be clear, I'm totally OK with listing for less and writing a large check at closing IF it will get the house sold. I'm not OK with listing for less and it still taking years to sell the house if I could have sold it 2 years from now at a higher listing price. That is what I'm trying to determine.

One thing that I think I've just not been clear enough about is that all the houses in this market are so different from one another that it is hard to compare. When someone buys a house on acreage in a suburb to a large city there is usually a reason. Some want to have horses, others want to raise dogs, someone else wants to have a huge workshop, someone else wants to have extensive gardens. That is one reason that some houses take so long to sell as they are so specialized for a particular use (that is the basic situation on the house nearby). That is one reason we bought this house when it was on the market 2 weeks. It met our specialized use (we specifically wanted a guest house). All of this does make it hard to compare houses and price them.

When we had a realtor open house, the price estimates by realtors knowledgeable in our area were over $100k apart from highest to lowest! Some realtors said they had no idea! And these were all realtors who regularly sell in this area.

Keep in mind that the list price is just an asking price. If your home is unusual and thus difficult to price, I think being in the ballpark is close enough. If someone likes your home, but thinks it is overpriced (to market or just for them), they can make a lower offer. I'd be sure your broker has a way for buyers to know this, without making it sound like you are desperate for an offer.

Geeze...spend $400 and get an appraisal. When you set up the appt, let them know you are going to put the home on the market and are looking for the market value.

You are overanalyzing the camp data by sq footage, acreage and selling price, but not taking into account emotions (maybe someone fell in love with a certain home due to a remodeled kitchen and overpaid), urgency(maybe someone had to buy quickly), inspection issues that caused much lower price, white elephants (maybe a home had an incurable defect so stayed on market a long time), hard headed sellers that refuse to budge on price, ugly/outdated interior, available competition at the time the home sold, etc. This stuff is not in the comp data.

You are obviously struggling with price. Get an appraisal.

I agree with the above poster about you being on market a long time. In that time, maintence issues can cost you money, on top of carrying cost. Maybe by then a new roof will be needed, where now you are ok. Also water heater, air conditioner and other appliances might go bad over time. Taxes might go up, etc.

IMO, folks buying unique homes on agreage might not be as particilar as you think when choosing a property. Maybe their only requirement is at least 5 acres and they are open to all options.

I'm totally OK with listing for less and writing a large check at closing IF it will get the house sold. I'm not OK with listing for less and it still taking years to sell the house if I could have sold it 2 years from now at a higher listing price. That is what I'm trying to determine.

You are looking for a crystal ball where none exists. You're already in a somewhat-confounding situation in which prices in your market appear to be holding or going up. You're finding that even successful local agents are finding it hard to reach consensus on an asking price. You're seeing that even reams of spreadsheet data don't bring you to a solid conclusion on pricing.

Do you know anyone who can state with certainty what conditions will be like in your area a couple of years from now? What new expenses (roof, windows, storm damage, local taxes) you might have in a couple of years?

One thing that I think I've just not been clear enough about is that all the houses in this market are so different from one another that it is hard to compare.

Then -- really -- why bother reducing the price of your house at all? If you truly believe that the right buyer eventually will come along and pay the asking price because "there's no place like this place near this place", then lowering the asking price is leaving money on the table. Keep the price of the house where it is now, resign yourself to the idea that it could take 2-3 more years to sell at that price, and take comfort in that extra money paying for all those months of carrying costs.

Or, decide that you really do want to move on with your life, resign yourself to the idea that -- as special as your property is to you -- it is acreage and a (nice) house that could have a different life if the buyer so chose, and build your new home!

The choice is yours.

Price your home at $200,000 and you may find yourself missing buyers who selected the dropdown that ranges from $175,000 to $199,999

I've never seen price ranges that end in 999. (not that it's not possible) The ranges that I've seen end in even numbers, like $175,000 - $200,000. Therefore it is better to price on an even number like $200,000. That way you get the buyers that are looking up to $200,000 and those starting at $200,000. Pricing at the break actually puts you in two price categories.

Actually I just talked to an agent about that today. On our local MLS on the website you can put in ranges that end on the even number. But she says that even though it says that when they run searches if a house is priced at, say, $500,000 a search in the $450k to $500k range will not call up that house. It should...but it doesn't in practice. That is why agents here usually don't price on the even break. Of course, that is probably not true other places.

We met with one agent yesterday. We had dealings with this agent some years ago when she was the selling agent for a house we almost bought. We bought a different house but have seen her from time to time as she lives in the subdivision. Also when our house was on the market she showed it (had a buyer interested in it but that buyer has to sell her house first). She is very knowledgeable and experienced in this area.

She basically agrees with some of the posts that we just can't find exact logical consistency on prices. There are lots of non-economic factors and lots of issues that make the pricing not necessarily consistent. She felt that the price we had our house at last was a good price and not too high at all. In fact, it was toward the lower end. She thinks relisting at that price would be fine.

On the issue of whether -- in my market -- lowering price will cause a faster sale, she can't be sure. We did talk about the fact that all the houses are different, buyers have specific needs and sometimes even properly priced houses take a long time to sell.

I did ask her where she would say to price the house if we told her we wanted to sell within 3 months and wanted a price low enough to make that highly likely (no guarantees of course as there has been a lack of buyers). She said that if we priced at $499k we would move into a bracket where we would get more people looking and the house would compare very favorably with other houses at that price range. Basically, she thinks that our prior price ($537k) is totally reasonable and a good price but there are fewer buyers at that price than at $499k (here only about 5% of houses sell over $500k). The reason to list is $499k would be to price somewhat below market and to draw in more buyers.

I'm sort of inclined to do that. DH is reluctant. He is OK with selling for $499k. But he doesn't want to list at $499k and then have someone assuming they can get it for $450k. There wouldn't be much room for price negotiation with a listing price of $499k but buyers generally assume there is.

We are going to meet with another agent this weekend as well.

Drop it to 475 (and be willing to take 450) and avoid that year on the market. What's the difference between selling it for that NOW and selling it for that a year from now along with 60K worth of carrying costs?. More money in your pocket in the end, that's the difference.

It's an awkward house to sell, and if time is of the essence, you'll price it accordingly.

Drop it to 475 (and be willing to take 450) and avoid that year on the market.

No one...not one single agent who has seen the house and given price opinions has remotely suggested 475 or 450 as an appropriate price. 450k is so low that we would be better off not selling at all. That is a price that is so low it would lead a buyer to think there was something wrong with the house. It is well below what it sold for in the past (and this is not a bubble market) before it had extensive additions made (guest house, additional garage, build out of additional space, etc.). Saying to sell it at that price is just irresponsible.

The agent we just saw (who is very experienced in this particular market and highly respected) believes that $537k would be a totally reasonable price (actually on the low end) but that if we want to bring in more buyers faster that we could list it at $499. She does not feel that $450k is remotely reasonable for the house.

Have you considered long and hard why it didn't sell before? Unfortunately we as owners are never the most objective about our own homes.

Good luck with whatever you do.

If you are OK with a selling price of $499k, why are you going to ask $537k?

I would list it at 499K. If you get an offer down at 450K you can always counter at list (499K) and make sure you have a good agent that will sell this as an already discounted price and an already good deal for the area etc. to the other agent/buyers.

Just because you get lower offers doesn't mean you have to accept them. I think if you can get in a price range that gets you more buyers in you are better off in terms of selling faster.

If you are OK with a selling price of $499k, why are you going to ask $537k?

Umm...I didn't say I was going to. We've now talked to two agents.

The first agent (who I was predisposed to use as I knew her already) felt that our last listing price of $537k was fine and initially said to relist at that price.

I then asked her if we really, strongly wanted to sell within 3 months (recognizing no one can guarantee what buyers will do) what price would she list it at. She then said $499k as that brings in buyers from a different bracket.

I went over with her every negative that I could see in my house, every reason that might make it difficult to sell. She said that I missed none of them (this is responding to orv1's comment).

I then went ahead and met with the 2nd agent we had set an appointment up with thinking we would likely go with agent 1. Agent 2 gave very similar advice and had similar thoughts to Agent 1 both as to the strengths and weaknesses of the house. He felt the last listing price we had for the house was fine as well (i.e. would ultimately lead to a sale), but suggested listing at 549k which is the top of the bracket.

I then asked her if we really, strongly wanted to sell within 3 months (recognizing no one can guarantee what buyers will do) what price would he list it at. He said $499k as that brings in buyers from a different bracket. His position is that price changes within brackets and listing lower in the bracket doesn't usually lead to more buyers (at least not in our area where these are higher end prices). So there are only two obvious listing prices -- $549 or $499. He felt that the lower price would bring in a different, more numerous bracket and so could lead to a faster sale.

DH frankly has difficulty with the idea of listing at $499k. He doesn't mind selling for $499k (well he doesn't like it since it means we write a check at closing but he is OK with it). However, he fears that people will expect to get 10% off of any price and that if you list at $499k that people will expect too much of a discount and won't see the $499k as an already discounted, realistic price.

I take him point but tell him that the person who insists on a price of $450k if we list at $499k was also a person who would never buy the house if it was listed at $549k. (I'm inclined to just bite the bullet and list at $499k. I think the house will sell if listed at a higher price but could take a long enough time that it still costs us money).

The 2nd agent was also very appealing to us. Both agents had similar opinions and advice. Both are very experienced and have done well in this area. Agent 1 specializes in the subdivision our house is in and is very, very familiar with it. She has shown the house and been in it many times in the past. Agent 2 has sold in this subdivision and is active in the overall area but doesn't specialize in this subdivision. However, he has a more sophisticated internet marketing plan.

I think either would do a fine job, so hard to decide between them.

I've heard a few people say in this post, "Get an appraisal." Well, for us, we did and are listed $100K under that and still we get, "it's overpriced." Does the appraisal really drive the price? From what I've experienced, everyone wants a deal, even if the home is priced at/under market value. We can wait it out if we have to as we haven't started the new house yet and just own the land. It's a frustrating thing, but we're still hopeful. Kats-spring will soon be here and from what realtors say (even on here) that the market will pick up. Hoping....

Just my 2 cents - from many years of experience I can tell you that lowering the price NEVER sold one home for us.

Neither did appraisals. As soon as you have one, a bank will insist they they want their own anyway. And it will almost always be for less than yours, too.

What did sell homes was getting a good, AGGRESSIVE realtor who networked, and actively called up other offices every week to see if they had interested clients. In every case where a home didn't sell in six months, changing to a more active realtor worked for us.

Too many agents just put a home on the MLS and the internet and forget about it. If it was that simple then anyone could do it. When you interview agents, ask them EXACTLY what they intend to do to sell your home. If it doesn't involve extended interaction with other realtors, and actual continuing effort on their part, move on.

"What did sell homes was getting a good, AGGRESSIVE realtor who networked, and actively called up other offices every week to see if they had interested clients. In every case where a home didn't sell in six months, changing to a more active realtor worked for us."

And then they suggested you reduce the price? In this market most agents will suggest a price drop when your property is not selling. Even the top agents.

I could be wrong, perhaps we could get some agents on the site to weigh in.

What you said is important, but in the current buyer's market price is very important also.

Maybe consider listing around $509k- $515k? Then you can come down to your $499k selling price and still give a discount off listing priced and this option will likely please your spouse.

Or you can stay firm at $499k list and sell. But the negotiations will likely not be fun for either party - as buyers typically want something off the price. And spouse will not be as happy.

OP, you researched carefully and I think your gut is spot on. You are doing your due diligence and are reasonable in your expectations! Price your house well, but don't go too low. It sounds like you need to wait for the right buyer to come along. Best of luck!

The reason we didn't do an appraisal although I did consider it is that based upon the sales most comparable our house will appraise at a price above where it was last listed.

The agents we talk to all seemed to feel that the house was "worth" $535-$550k and that it would sell if listed at that amount. However, given the market and the unique nature of acreage homes it might take awhile to find a buyer who is interested in our particular features that give value.

So, if we wanted to list it and hold firm to, say, a listing of $549 we would eventually get an offer but it might be awhile.

At the cost we have of carrying/maintaining this house that didn't seem very appealing so we are going to list it at $499.9k. The thought there is to hopefully bring in a larger buyer pool.

We don't have as much negotiating room at that point as we would at $549 (we do have some) but gives us the best change to sell quicker.

@ Orv1

"And then they suggested you reduce the price? In this market most agents will suggest a price drop when your property is not selling. Even the top agents. "

Actually, no. The only realtors who ever suggested a lower price to us were the ones nearing the expiration of their contracts on homes they had not sold. In one case, a new agent suggested we were already "too low", but advised against raising the price that was already associated with the house.

Unfortunately, just lowering a price will not sell a home unless it was badly overpriced to begin with. This does not seem to be the case with OPs home.

It is very easy to underestimate the value of a good agent until you have worked with a few mediocre and poor ones.

In any case, good luck kats_meow. I hope you get a price you can live with soon.

I know what you're up against because I have a unique property too. Mine is actually a little horse farm.

I would say don't worry about buyers expecting you to go lower on that $499,900 price. When I was shopping, I found a place for $209,900. I found out it had been lowered from $229,900. It needs a lot of work, the owner needs to sell, nothing is selling in the area. So I expected I could get a better deal. I offered $180,000. They wouldn't even respond. I offered $190,000. They still wouldn't respond. I offered $200,000. Finally they answered and they said okay but they made some demands. The point is, I was SURE I was going to get it for a lot lower than it was listed for but I found out you can't assume that every seller is going to drop even if there are reasons to. I loved the house and made the deal anyway. In fact, I would have taken it at her full asking price. Good luck!

Here is a link that might be useful: Smith Mountain Lake Horse Property

We are actually under contract. We put the house back on the market late last week and went under contract to someone who saw it the second day of showings. Sale price is very close to the list price. I think the buyers did recognize that it was priced very favorably compared to comps.

Congratulations Kats! Now don't go and worry yourself by reading that thread asking how often closings don't happen, ha ha.

Best of luck.

Congrats Katsmeow. You worked hard and did your due diligence... I wish all my clients were as open minded as you have been. Selling at the price you had too will be a distant memory once you start building your new dream home. You will find it well worth it.