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When do you lower the asking price?

Posted by MacyPA (My Page) on
Mon, Nov 11, 13 at 12:35

My home has been on the market for about three weeks. There have been three showings and an open house that produced no results. The house is on a busy road and that complaint is what we hear for those that viewed the house.

Prior to signing with our current agent we interviewed a total of four. Three of them had prices within a thousand or two of each other. The fourth agent was about $50,000 lower, but had incorrect information on the house. We listed the house with the lowest of the three higher ones we got.

After two weeks and only two showings, the agent felt it nearing the time to reduce the price. Since then we had the quiet open house and another showing and she feels a price reduction is a must.

Does that seem fast? I know after a house is on sale for a long time people begin to wonder what is wrong with it, but a quick drop in the price could make us seem desperate and any bid will be much lower.

So when is a good time with no foot traffic at this time of year?

Thanks


Follow-Up Postings:

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RE: When do you lower the asking price?

What is normal DOM for your immediate area? Visit a few open houses close to you to see if they have anyone attending. Ask your agent her recent showing experiences in the vicinity, and ask her to ask her fellow agents. IMO three weeks and three total showings is pretty low unless nothing in your area is moving/showing.

Usually no showings = too high a price. In your case, you also have an incurable defect; the busy road. If you price a house low enough, eventually it will sell. The question you are asking is a good one, and a bit of homework on your part might help you sell quicker without lowering too much.


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RE: When do you lower the asking price?

I was just reading the real estate section in the NY Times and I was surprised to learn that open houses for the public rarely lead to a sale.
Open houses for the realtors seem to lead to sales.

I think you know that this is a difficult time to sell. Most people are starting to think about the holidays. Those with school age children usually do not want to move mid year.
What are your comps? What has sold and for how much.
Since you are on a busy road, your house has to be priced low enough so that potential buyers will over look this negative because they are getting a bargain.

Can you wait until the spring? If not, I would go as low as you can now and see what happens.


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RE: When do you lower the asking price?

Only 3 showings in 3 weeks? Even at this slower time of the year you are overpriced by a good percentage. If you had double the amount of visitors, you'd only be overpriced by a bit.


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RE: When do you lower the asking price?

I would put less emphasis on the amount of time elapsed, and more on what your direct competition looks like. Have your agent pull all the homes that buyers who look at your home would also be looking at. (Same price range, same general location, same similar size...) Go through each one of these and sincerely ask yourself if you were a buyer, which home would you make an offer on.
Also, do this with every home that has sold since your home came on the market. Ask yourself why this buyer chose to make an offer on this home, even though they probably viewed your home too.
These two exercises should shed light as to if you need to lower your price, or if you just need to be more patient.


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RE: When do you lower the asking price?

Hi this is my first post. :) I feel your pain. I checked my county auditor's site and saw what prices the homes in my area had sold for in the last year. Next I checked the trulia listings and saw how long homes in my market had been sitting. Some fair market price homes had been sitting for months. Also checked the percentage of rentals in my area (it had increased) and the depreciation of the homes in the last year. I believe my neighborhood is going to continue to depreciate due the bubble burst. I need out now.

Within a week I dropped my asking price to the bare minimum. The only incentive I could offer was to accept a lower offer without giving closing costs, or ask for a full offer and pay closing.

I was told you can never list too low because people will bid higher if they want the house. I recieved an offer at asking price two days later and the house is under contract. Hope it closes. Good luck with your sale.


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RE: When do you lower the asking price?

Here is how I view price reduction when the house has an incurable defect (like in your case the location):

Early in the game and a decent drop - ok owners realized they were overpriced for the market or was testing the waters with the previous price - no big deal

After a month and a small drop - guess they realized they were overpriced, but seems more like the realtor couldn't talk them into more appropriate drop. Seems like hard to deal with.

3 months and a small drop - guess they are not getting the traffic they want, but still doesn't seem like they want to sell. A small drop really doesn't make much different to me as if that was all that was needed then somebody would have made an offer with that small drop already in their offer.

3 months and a decent drop - looks like they want to sell and if in line with comps now and adjusted for the defect then I wouldn't think much about the price drop

Small incremental drops often would stand out more to me like they aren't really interested in selling, but the realtor keeps talking them into dropping the price.

Ie if you are going to make a price drop make it a decent one or adjust it quickly, not a once a month thing.


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RE: When do you lower the asking price?

Lyfia- I understand what you are saying. For our house we decreased the price 25% under market with us paying closing costs because we need to get out. There is nothing so humble as feeling like a rat on a sinking ship. My neighborhood truly feels like it is going downhill. I don't need a market analysis to tell me this. I just need to look at the discarded beer cans on my front lawn.

I think my potential sale (keeping finger's crossed) is helped by other listings in my area which are overpriced. I am talking 2007 prices.

BTW- I love your term "incurable defects". Makes me feel less like a loser. My home was a source of pride, but in the end it is just worth what someone is willing to pay for it. I don't think potential buyer's gave a rat's behind that the yard was beautifully landscaped, or that the house had fresh paint, slate floors, or new carpet. They just see comparible houses and think "I can make this what I want it to be" and if the prices for a comparable house is lower, they want that house.

In the end for a quick sale you need to get serious with the pricing. I did and my neighbors are angry. They can live in 2007 but the reality is that it is now 2013. Things have changed.


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RE: When do you lower the asking price?

Acadiafun,
You sound like a very sensible person. I have seen too may sellers in very bad financial situations decide to squeeze every bit of money from a home sale, only to never get that buyer and therefore go down with the ship.
I have never quite understood this rationale.


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RE: When do you lower the asking price?

Nobody wants to live next to a busy street that could be a reason it would be for me.


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RE: When do you lower the asking price?

They will if the price is at a point that compensates for the incurable defect.


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RE: When do you lower the asking price?

This thread reminds of the house shown below, look at the price history. It appears the seller doesn't know what he doesn't have. I think the house is too small and not a good teardown lot. The slowness in reducing the price much lower makes me think of a difficult seller.

It is smart to lower the price, get out, move on with life.

Here is a link that might be useful: Rolling Hills


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RE: When do you lower the asking price?

I don't believe in open houses. It's a way for the agent to pick up new clients but rarely produces a buyer.
I was licensed for 20 years and come from a family of realtors. We will be putting our house on the market next spring and no open houses and probably not a sign for the first 2-3 weeks.
Oh, to answer your question...we did sell a duplex last Feb and after 3 weeks, we reduced the price from $450 to $425 and it sold about 10 days later. We still had to go to $400 because of the appraisal. :-(


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RE: When do you lower the asking price?

My questions are: how long is your contract with this realtor? Most of the ones we interviewed wanted 6 months, but we negotiated for 3 months, so if we got stuck with a nonstarter, we could drop him/her and get a go-getter. It worked well.

Second: what is the exposure on the internet? You (or your realtor) should be able to track the number of responses. Are you getting good online exposure?

And if all else fails and you have the budget, maybe replace at least some of the windows near the road with double pane glass to get rid of the noise.


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