If your house has been up for sale for two months — or longer — without a nibble of interest, it’s probably time to ask yourself some tough questions. What causes a house to languish on the market and when should you lower the price?
Pinpoint the problem. With a Comparative Market Analysis or CMA of recent sales prices, you should have listed the house at an attractive price. Did you make obvious repairs, and declutter and clean the house until it shines? Have you had an open house? Have you staged the home? Try to figure out why buyers aren’t seeing the value of the house in relation to your price.
Examine feedback. Review the feedback provided by prospective buyers who have toured your home. Your real estate agent can set this up for you. If buyers consistently list the same negatives, you’ve found your problem. Is your home a two-bedroom, one-bath model? Is there a railroad track nearby? Does the home smell like cigarette smoke? Fix what you can immediately. What cannot be fixed must be addressed in price.
Check the competition. Look at other houses for sale nearby that are similar to yours. What do they have that you don’t? Drop in on open houses. For homes already sold, find out what you can about special features that might have raised their final sales price. Your buyer’s agent should be able to obtain this information through the listing agent.
Seasonal sales. Spring and summer are the busiest season for home sales. If you’re selling in the winter, buyers expect better deals and may have considered your home overpriced.
Search parameters. Is your home price just above a common online search parameter? For example, prospective buyers may search for homes ranging in price from $200,000 to $250,000. If you price your home at $260,000, your home will be excluded from many online searches. If you want to sell for $250,000, a savvy agent will steer you toward listing at $249,900 so that you don’t fall just outside of buyers’ search parameters, thereby missing out on good prospects.
Agent expertise. An aggressive, forward thinking agent should be investing significant time and effort in marketing your home. Relying solely on the Multiple Listing Service and a sign in the yard is not a good strategy. Your agent should assist you in staging your home correctly, getting professional photographs taken, sending direct mail advertising, and posting your listing to social media platforms.
How much to reduce? If, in the final analysis, you need to reduce your price, carefully consider all the factors discussed above and make a decision with the help of your agent.