The Price Reduction
When It's Time

Without a doubt, the absolute best time for a price reduction is ...

When You First List Your Home For Sale

It's wise to price it right when you sign the listing agreement.

Many listings remain on the market for a long, long time - too long.

And often without buyer interest of any kind - viewings or offers. Don't blame your REALTOR®, unless, of course, they goofed by recommending too high a list price in the first place. Or they failed to recommend a price reduction soon enough. Assuming they advised you correctly, all they can do is effectively expose your home to the marketplace. The reason for little to no action is really quite simple:

The List Price is Too High

When evaluating your home, unless yours is an unusual situation, you should seriously consider property values in your immediate area. Chances are good that your property value will fall into the same range as others sold on your street. Unless your home is really special.

There could be a high tension electricity corridor in your back yard. Or your house could be situated under a noisy flight path, or have gaping holes in the roof or a basement full of water. It doesn't matter what's wrong.

Everything always boils down to price.

It's been said that there's a buyer for every home at the right property value. It's just a matter of establishing fair market value.

Expired listings are almost always over-priced, either because the home-owner failed to be objective in their evaluation of their own home, or the REALTOR® failed to accurately evaluate it as a result of negligence or inexperience. Or a price reduction was not processed soon enough.

In either case, the chances of your home selling are very poor.

I've always believed that the most active time of any listing term is ...

The First 2 to 4 Weeks

However, it'll depend upon the price range in which your home falls, the type of property and your local market conditions.

A luxury home, for example, with a high house value, obviously falls into a smaller segment of the market since there are fewer well-heeled people who have the purchasing power to afford a monster home. City or suburban homes or condos in a moderate price range will attract serious action sooner due to the larger number of potential buyers typically searching for low to medium priced homes. Rural homes in an average price range will also attract a fair amount of attention. However, country homes further away from a large suburban area, or at the high end of the price scale, may require more time to sell.

Also, if your local market is depressed, or there's a lot of competition from other sellers, it may take longer to sell your home. So, in these cases, a price reduction may not be advisable for a bit longer period - maybe 30 to 45 days.

At any given time, there are always buyers aggressively searching for homes. They do their daily diligence surfing the internet for newly listed homes. They've already viewed and/or rejected every home currently on the market in their price range and target area. So, it's just the ...

New Listings

... that command their attention.

When your home first appears in their, or their REALTOR'S® search engine results, and they feel it's over-priced when compared to other listings, they'll just ignore it. By over-pricing, you've sent a clear message that you believe your home is worth more than what an objective buyer or their agent believe it is. Most buyers won't want to insult you with what they believe you'd probably feel is a low offer. And the buyer agents prefer to avoid a difficult offer presentation.

Remember that buyers enjoy the benefit these days of having candid professional advice with respect to house value, as you did when your REALTOR® first advised you on list price. So, they can't be duped.

A popular question often posed by buyers is ...

How Long Has It Been For Sale?

This information is readily available on the listing. If the buyer feels it's been too long, they wonder what's wrong with it, or why someone hasn't yet bought it? Either way, they usually pass on it. Or if they do decide to offer, the offer price is a lot lower than you'd want.

So, it's very important to ...

Price It Right From the Start

Ignore your REALTOR'S® advice at your own peril.

If you want to try it at a higher price for awhile, I recommend you don't try for too long. You might as well accept reality, and process a price reduction within that initial 2 to 4 weeks.

Keep your listing ...

Front of Mind

... with buyers and their REALTORS®.

If you refuse a price reduction request by your REALTOR®, which would make your listing competitive with property values of comparable sold listings as well as other active listings in your area, then be prepared to accept a lower price down the road. Call it ...

List Price Roulette

I've witnessed situations during my career when a property has sold for a price lower than what could have been achieved if properly priced from the outset. It happens.

To be fair with your REALTOR®, I suggest that you advise them during the initial consultation, before they accept your listing, that you are committed to selling for fair market value, whatever that may be. Or that you will sell your home only if you obtain a particular minimum price. That way, the REALTOR® can make an informed decision as to whether or not they believe they can fulfill their responsibility to you. Or even if they want your listing.

So, when's the best time for a price reduction? Right away.

Get Sold for Fair Market Value

For more information on how a REALTOR® can assist you, including advising on when it's time for a price reduction, click here.

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