Though low inventory is prompting buyers to raise their offers in order to beat out competitors, you still want your sellers to know: an overpriced listing will linger on the market. Buyers pay attention to time on market and may erroneously assume something is wrong with a property that has gone “stale.” Real estate pros say it’s critical to determine what time frame is considered stale in your market and drop the price of your listing before getting to that pivotal moment.
“I typically drop the price after the second week on the market, usually in $5,000 to $10,000 increments,” says Laura Barnett, CRS, GRI, a sales associate with RE/MAX DFW Associates in Coppell, Texas. “But I may be more aggressive than most.” Price cuts in the hot Dallas-area market, where Barnett works, haven’t been common lately, she says. But “there is a strange change that is in the air, and sellers are starting to have to become more humble. I would not say it is a buyer’s market, but a new balance between buyers and sellers has been hitting us since August.”
Soaring home prices may make buyers pause, but houses are still selling fast. Nationwide, the average time a home spent on the market was 34 days in September, down from 39 days a year prior, according to the National Association of REALTORS®. Some sellers may be adamant about “testing the market” with a high asking price, so you should have a game plan for what to do if it backfires. “I don’t believe in testing the market, but if we enter the market [with a list price] pushing the top of the range, we can easily gauge response within seven to 10 days,” says Dana Rice, a sales associate with Compass in Washington, D.C. “It’s almost a certainty that if we don’t get an offer within that first 10-day period, then we’ve missed the mark.”
Rice says she’s seen sellers do a rapid price adjustment that can then result in a quicker sale. You can “bring those same buyers back—the ones who liked the property in the first place and who will view the price adjustment as ‘the seller is listening to me,’” she says.
Source: “How to Know When to Drop the Asking Price on Your Home,” CNBC (Oct. 27, 2017)