Every home seller expects their house to sell quickly, especially if you live in a fast-moving real estate market. But what do you do if those offers don’t start rolling in as quickly as you expect — or at all?
Nationwide, 12.9 percent of sellers reduce the price of their house at least once. If you’re thinking about doing a price reduction, consider this: the longer a home is on the market, the lower your odds are of selling it for list price.
Sellers who accept an offer within the first week of listing have a 57-percent chance of selling for list price. During week two, it’s 50 percent, and then it drops to 39, 32, and so on. Of course, this is based on national data, and if you live in a strong sellers market, your odds of selling for list price, and quickly, are much higher.
So is it the right time for you to consider a price adjustment? Consider these factors:
Indicators your home needs a price adjustment
Nearby comps are priced lower
Of course, when you select a list price for your home, you want to get as much profit as possible, while still being competitive with other listings. How to price your home to sell is a bit of an art form, and that’s why many sellers end up adjusting their list price within a few weeks.
Take a second look at other similar homes for sale in your neighborhood. Is it possible you priced your home too aggressively given your current market? Are other similar homes selling more quickly?
You’re not receiving offers
While there are multiple possible reasons why nobody’s biting on your home, price is often the culprit. If buyers feel like they can find a similar home at a better value, they’re unlikely to put in an offer, or even set up a showing. If people are viewing your listing online but not submitting an offer, or if you’re getting open house attendance but with no results, your price could be the problem.
You’re having few showings
Speaking of showings, the foot traffic coming through the door is a great indicator of the attractiveness of your list price. Open house and showing traffic tend to drop off after the first two weeks, so you’ll know pretty quickly if your price isn’t resonating with buyers.
Your home appraised low
Savvy sellers often pay for their own appraisal before they list as a way to get an objective opinion on an appropriate list price. If you haven’t gotten an appraisal already, it might be money well spent.
If the home appraises well below your asking price, then you have your answer. Or if you’ve had a contract fall through due to a low appraisal from the buyer’s appraiser, that’s another good indicator that a price adjustment might be a good idea.
Marketing steps to take before a price reduction
Before taking action in reducing your price, you’ll want to take a step back and make sure that the price is really the issue, and it’s not an issue of ineffective marketing.
- Load up the photos and videos: Even though your home may be beautiful in person, if your listing has low-quality photos (or worse, none at all), you’ll never get buyers through the door. Professional real estate photos are always worth the money, especially in a competitive market. And consider adding a 3D Home virtual tour to help buyers get a better feel for the home’s layout.
- Ensure your online listing is complete: Make sure your listing description is putting your house in its best possible light. Be sure to showcase the home’s best features, share information about what makes the neighborhood special, and pack it full of the keywords buyers love. A local real estate agent should be able to give you insights into the most popular home features in your area.
- Make sure your home is listed in multiple places: Whether you’re working with an agent or selling for sale by owner (FSBO), you should make sure that your home is showing up in multiple places, including on your local MLS, on Zillow, on other real estate search sites, and on social media. If you’re using an agent, touch base with them about their online marketing plan for your home.
- Post signage in prominent locations: According to Zillow research, 55 percent of recent buyers said that for sale or open house signs played a role in their home search. Make sure you have plenty of visible signs around the neighborhood, with wayfinding signage for open houses, especially.
- Address buyer feedback: People who have toured your home but didn’t end up making an offer are a great resource. If you set up these past showings yourself, consider asking for feedback directly. If you’re using an agent, ask your agent to follow up after showings and ask for constructive criticism. Then, take action on any fixable pieces of feedback — and try not to take it personally.
Price reduction strategies
- Act fast: As we mentioned earlier, the number of showings and open house attendees drops off significantly after the first few weeks your listing is active, so don’t wait to take action. If you’re realizing you need to reduce the price, don’t wait.
- Be realistic: When discussing what your new, lower price will be, make sure you’re comfortable with the amount. What’s the lowest you can accept and successfully move on from the sale? It’s not a good price if you’re not realistically able to take the amount.
- See what other sellers are doing: Use Zillow’s neighborhood-by-neighborhood data to see what other sellers are up to. How long are they waiting to make a price adjustment? How much are they cutting the price? Get clues from recent sales to gauge your timing and discount.
- Only reduce the price once: Nobody likes to make a price cut, so sellers are often inclined to make multiple small price adjustments to ease the pain. Avoid this strategy — it can take multiple small reductions before buyers finally take notice, so you’ll only end up prolonging the sales process. Instead, decide on a cut that’s significant enough to jump-start interest in your home. According to Zillow, the average price cut is 2.9 percent of the list price.