There is your house, waiting for a buyer! It’s been a few months now and it’s starting to look a little … desperate. Then you consider reducing the sale price: on the one hand, you know that this would mean depriving you of several thousand dollars (or pesos), but not doing so could mean the loss of enthusiastic buyers for a slightly lower price.
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So, when is the ideal time to say “let’s do it!” And reduce the price of your home? Keep reading and you will find some tips that can guide you along the way.
1. Observe and listen to your audience
Do potential buyers visit the house but never make an offer? If 10 of the 20 potential buyers who have visited your home have not made an offer, then it is time to seriously consider making a change to the price.
As a seller, after each visit you must request feedback from both the interested parties and the real estate agents. Pay attention and identify if there is any common opinion (positive or negative) in their answers. If the phrase “is a little expensive” is frequent, then you will know that it is time to make a price reduction.
2. Analyze how much time has passed
Unlike romantic dating, in the real estate world you should not wait for “the perfect moment” to make a move, you should know that keeping your house stagnant within the market can cost you a lot of money.
The houses that have an adequate price begin to receive offers within the first weeks after being put on the market. But, what if similar properties sell fast, but yours does not? If that happens, maybe you should do more than just decrease the price, it may be necessary to withdraw it from the market for a short period.
When you have been in the market for five weeks without any news, you will begin to “pursue” the market. Maybe it’s time to take your house off the market and make some alterations: you can reorganize the place, make small but significant improvements so that your property looks better and comes back stronger.
The result? On numerous occasions, after being relisted, these properties have been sold in a couple of weeks and at the asking price.
3. Consider the cycle of decreasing and increasing real estate prices
Think about the following when you are debating whether you should lower the price or not: in the end, it is very likely that the market is the one who decides for you. It is almost impossible to reduce the price of a house, because the market will increase it again naturally.
Actually, it is a better option to lower the price of your home a bit than overvalue it, this way you will have more offers to work with and you can even turn that competition into a real frenzy.
4. The golden rule: meet your market
Above all, you must consider the particularities of your market. There is no universal rule that tells you when is the best time to reduce the price of your property, but you can consider these three key points to make the decision:
• What is the price of the properties available in the market that could be compared with yours? Are they selling quickly or remain for a long period in the market? If they have been sold, what was their closing price?
• What is the average time that a house remains on the market within your neighborhood? If you have not met that deadline, do not reduce the price yet, if you have already surpassed it, it is time to start reducing prices and even remove the property from the market.
• How many properties within the area reduced their price and how long did it take them to make this reduction? Did this change help them close a sale? Again, what was the final price?
In other words, do your homework and work with the market, do not fight against it.