Pricing a home correctly is hard work. You want to get the most money for your house, but you also want it to sell. There is a fine line between too high and too low and it's not always an easy balance to find. This is why really successful Realtors are so sought after. They have a knack for pricing a home right from the get-go.
Reasons to drop the price of a home
Few interested parties – This is a solid indicator that something is wrong with your listing, and it could very well be the price. If you or your Realtor are not hearing from interested parties pretty quickly after the house goes up this might be your problem. Generally, homes see the most interest in the first few weeks after they go up for sale. People want to get to these homes before they are snatched up by other buyers. If your home is not seeing this initial surge in traffic you may have priced it to high. All those potential buyers could be waiting out there, seeing if you asking price becomes more reasonable. The reason why the first few weeks that your home goes on the market will almost always be the busiest time is rather straightforward.
Simply put all the buyers in the market have seen the other homes available for sale already. When a new home hits the market Realtors will get in touch with their clients right away and schedule a showing. With the advent of the internet and all the listing syndication channels it is also likely that buyers will see the home immediately after it is listed for sale. This creates an initial burst of activity. This is why most Realtors will explain how imperative to price your home properly coming out of the gate. When you don't price correctly it can create damaging effects that are hard to overcome even if you choose to reduce at some point in the future.
Your home is just sitting there – As stated before, most homes that are listed for sale see an initial surge in interest from buyers. Your home may or may not have followed this pattern. However, if the house is just sitting on the market for a month, two months or more – you really do have a problem. The best way to know if your situation is normal is to look at other comparable houses in your market at the moment – how long did they take to sell? If you are already 50% or more beyond that time frame, you may need to lower the price just to get it sold. One thing to keep in mind is that the "days on the market" for your home becomes critical. The longer a home lingers on the market the more likely you will end up getting low ball offers from a buyer. One of the questions that almost every buyer will ask their real estate agent is "how long has the home been on the market.”
Lots of attention, no offers – The flip side to not having any lookers is having a ton of lookers – only no one is trying to buy. Your house may be really appealing in a lot of ways, but if the price is not right buyers will go elsewhere. You don't want your home on the market any longer than it has to be. If you are getting lots of interest buy no offers, consider lowering the price on your home. Sometimes you just need to hit the pricing sweet spot and you have been missing it.