Selling Home - When to Reduce Price?

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Topic Author
Broadway2018
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Selling Home - When to Reduce Price?

Post by Broadway2018 » Mon Jun 17, 2019 7:39 am

My house has been on the market for 23 days with no showings. This seems somewhat normal for my area, though. How much should I reduce the price by?

Update: Lowered price to $399,000

Home Situation
Priced at $425k
Not in prime area or school district
Homes nearby range from $350k-$500k
New construction and completely updated
A comparable home in neighborhood adjacent listed for $460k but their agent said they only had 1 showing too (DOM 60 days)
Appraised last year at $406k - added deck and fence for $20k since then
Zillow estimate is $421k
When we bought the house, it had been on the market 4-5 months
Last edited by Broadway2018 on Mon Jun 17, 2019 10:31 am, edited 2 times in total.

JoeRetire
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Re: Selling Home - When to Reduce Price?

Post by JoeRetire » Mon Jun 17, 2019 7:41 am

Broadway2018 wrote:
Mon Jun 17, 2019 7:39 am
My house has been on the market for 23 days with no showings. This seems somewhat normal for my area, though. How much should I reduce the price by?
How badly/quickly do you want to move?
What does your agent say?

23 days is a long time. No showings is a sign that you are overpriced.

When we sold our house earlier this year, it was on the market on a Thursday, open house Saturday and Sunday, we reviewed bids and selected the buyer on Tuesday night. 8 bids, all of them above asking price.

But housing markets are hyper-local. In my locale, 23 days would mean something is very wrong. Perhaps in your area it is normal.

Bottom line - if you want to move, price your house to sell.
Last edited by JoeRetire on Mon Jun 17, 2019 7:46 am, edited 2 times in total.

fabdog
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Re: Selling Home - When to Reduce Price?

Post by fabdog » Mon Jun 17, 2019 7:43 am

What does your agent say?

When you had the (at least) 3 brokers in to give you their pitch on how to price and how they would market the home, what did they say about the local market and and what pace you should expect showings, how active is the market, etc?

So if this is normal for your area in this price range, maybe you stick with it. If you desire a faster sale maybe you drop the price. Have there been any recent comparable sales in your area? Your agent should have walked you through how your house and pricing strategy compared to those

Mike

Topic Author
Broadway2018
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Re: Selling Home - When to Reduce Price?

Post by Broadway2018 » Mon Jun 17, 2019 7:46 am

JoeRetire wrote:
Mon Jun 17, 2019 7:41 am
Broadway2018 wrote:
Mon Jun 17, 2019 7:39 am
My house has been on the market for 23 days with no showings. This seems somewhat normal for my area, though. How much should I reduce the price by?
How badly/quickly do you want to move?
What does your agent say?
We would like to be closed on the house by November so I guess we have some time. Our agent hasn't really said much. We had an open house and 1 couple showed up but was looking for something in the $350k range which is not doable on our house. Other then that no one. He has had calls but no one shows up.

Topic Author
Broadway2018
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Re: Selling Home - When to Reduce Price?

Post by Broadway2018 » Mon Jun 17, 2019 7:48 am

fabdog wrote:
Mon Jun 17, 2019 7:43 am
What does your agent say?

When you had the (at least) 3 brokers in to give you their pitch on how to price and how they would market the home, what did they say about the local market and and what pace you should expect showings, how active is the market, etc?

So if this is normal for your area in this price range, maybe you stick with it. If you desire a faster sale maybe you drop the price. Have there been any recent comparable sales in your area? Your agent should have walked you through how your house and pricing strategy compared to those

Mike
Sales for homes similar to ours are in the $400s but older homes with the same sq footage are in the $300s. We bought the house from the agent and did not shop agents, which was probably a mistake. He is very nice but pretty old school.

For example, I mentioned to him several times that maybe we could advertise closing costs instead of dropping the price. He does not seem to like that idea.

JoeRetire
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Re: Selling Home - When to Reduce Price?

Post by JoeRetire » Mon Jun 17, 2019 7:48 am

Broadway2018 wrote:
Mon Jun 17, 2019 7:46 am
We would like to be closed on the house by November so I guess we have some time. Our agent hasn't really said much. We had an open house and 1 couple showed up but was looking for something in the $350k range which is not doable on our house. Other then that no one. He has had calls but no one shows up.
Hmm. In many locales you really would need to hit the market hard now, since once school starts up the buyers with school age children would dry up and others will be vacationing over the summer.

A good agent could tell you the "sweet spot" for houses in your area. Perhaps the couple looking in the $350k range know something...

In general, the only reason a house doesn't sell is because the price is wrong. If you set the price correctly, it will always sell quickly.
Last edited by JoeRetire on Mon Jun 17, 2019 7:51 am, edited 3 times in total.

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Sandtrap
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Re: Selling Home - When to Reduce Price?

Post by Sandtrap » Mon Jun 17, 2019 7:49 am

Sequence:
1
List
2
Wait
3
Lower price to attract offers. But not to quickly or you will seem "highly motivated" and easy to negotiate downward.

Then:

1
Take property off listings. Wait appropriate time for relist as new listing.
2
List at a very reasonable price that is fair to everyone.
3
Wait
4
repeat as above.

If not sold.

1.
Repeat as above while considering changing the realtor. A different broker listing sometimes helps. New pictures and ad content.

Etc.

Questions:

*There are average home listing durations before sale in your area, and also around you. What are they?
*Right now there is a tendency for many to over value their property. Are you?
*Are there many or other homes for sale in your area that are similar?
*How quickly do you need to sell this property?

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HomeStretch
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Re: Selling Home - When to Reduce Price?

Post by HomeStretch » Mon Jun 17, 2019 7:52 am

I think it’s hard to answer your question about reducing your list price. Have you talked to your agent?

What does your real estate agent say about the no showings?
- Does the agent’s marketing plan need to be revised?
- Are you offering the going rate for the commission to the buyer’s agent? Would offering a bonus help?
- Did your agent hold an open house for other agents? For potential buyers?
- Are your MLS photos professionally done? Is your house staged in the photos?

What does your agent say about the list price and whether it should be reduced?
- Does the agent need to relook at the comps?
- Did the agent share any feedback from other agents on the house’s list price/condition?

JoeRetire
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Re: Selling Home - When to Reduce Price?

Post by JoeRetire » Mon Jun 17, 2019 7:53 am

Broadway2018 wrote:
Mon Jun 17, 2019 7:39 am
My house has been on the market for 23 days with no showings.
Is your house posted using professional pictures? Was it staged?
How do the words, pictures, and most importantly price, compare to similar houses in your area which have recently sold?

Do you want to post a link to your listing here?

Topic Author
Broadway2018
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Re: Selling Home - When to Reduce Price?

Post by Broadway2018 » Mon Jun 17, 2019 7:58 am

JoeRetire wrote:
Mon Jun 17, 2019 7:53 am
Broadway2018 wrote:
Mon Jun 17, 2019 7:39 am
My house has been on the market for 23 days with no showings.
Is your house posted using professional pictures? Was it staged?
How do the words, pictures, and most importantly price, compare to similar houses in your area which have recently sold?

Do you want to post a link to your listing here?
Yes, professional photos were taken. If I was not starting my new job next week, I would sell the house myself and drop the price. The realtor commission eats about $25k of profit.

I don't want to post my listing but will send it to you privately. Our house is in the middle. It's an odd area. A mile up the street is not so great areas and higher crime. A mile the other way and you get nicer houses and better schools. The comparables are the newer houses in the neighborhood next to ours. They are selling for $450k and up but taking 4-5 months.

pepperz
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Re: Selling Home - When to Reduce Price?

Post by pepperz » Mon Jun 17, 2019 8:06 am

It’s not complicated. Your agent should know how to price the house to sell based on two things:

1. What similar homes in your area are selling for. (Comparables)

2. Your timeline. (If you need to sell in 30 days the price will be less if you needed to sell in 90 days.)

You say you’d like to sell by November. The house obviously isn’t priced to move fast and I’m sure that’s why. Your realtor should be reassuring you this is all part of their plan and tell you what “plan b” is if this doesn’t work out as planned.

Jack FFR1846
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Re: Selling Home - When to Reduce Price?

Post by Jack FFR1846 » Mon Jun 17, 2019 8:08 am

Have you looked at comps in the area AND houses priced lower? I'd go all the way to $300k or even $250k. You need to understand who your competition is. Come to your own conclusion as to where the house needs to be priced. We've sold 2 houses, both in slow markets. Both had offers accepted within 3 weeks of listing.
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TN_Boy
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Re: Selling Home - When to Reduce Price?

Post by TN_Boy » Mon Jun 17, 2019 8:25 am

Broadway2018 wrote:
Mon Jun 17, 2019 7:39 am
My house has been on the market for 23 days with no showings. This seems somewhat normal for my area, though. How much should I reduce the price by?

Home Situation
Priced at $425k
Not in prime area or school district
Homes nearby range from $350k-$500k
New construction and completely updated
A comparable home in neighborhood adjacent listed for $460k but their agent said they only had 1 showing too (DOM 60 days)
Appraised last year at $406k - added deck and fence for $20k since then
Zillow estimate is $421k
When we bought the house, it had been on the market 4-5 months
Why is "no showings" in almost a month "somewhat normal?" Is the real estate market very very (very) slow in your area? As Sandtrap asks, what is the average time on market before sale in your area?

In the two real estate markets I'm somewhat familiar with, no showings at all in 23 days would seriously alarm me. Even if the house is overpriced, I'd expect some traffic. Usually when a house goes on the market, there is a bit of a flurry as agents and buyers get a look at it.

How is the house being marketed (online, etc). My understanding is that many agents now feel that open houses aren't very useful.

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Watty
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Re: Selling Home - When to Reduce Price?

Post by Watty » Mon Jun 17, 2019 8:32 am

The last time I sold a house one of the things the real estate agent did was to provide a list of comparable houses that were for sale(not sold) when our house went on the market. The purpose of that list was so that we could look back at it in a few months to see what had happened to those houses. If they were selling but mine was not then that would be a red flag that there was a problem. We could also look to see if the ones that did sell had price reductions. If you have a list like that I would go through it to see how money of them are now under contract or have sold.

In addition to your house also take a hard look at the houses that are within a block or two of you. If you have some neglected houses that are close to yours then people could be driving by to see your house and then deciding to skip looking at your house because of the immediate neighborhood.
Broadway2018 wrote:
Mon Jun 17, 2019 7:58 am
Our house is in the middle. It's an odd area. A mile up the street is not so great areas and higher crime. A mile the other way and you get nicer houses and better schools. The comparables are the newer houses in the neighborhood next to ours. They are selling for $450k and up but taking 4-5 months.
If they are newer houses than yours then they are not really comparable especially if they have better schools.

Someone could get one of those houses for $25K more than yours so may not be discounted enough to make it look attractive compared to those houses.

The 4-5 months to sell is also very misleading since the real situation could be;

1) House A sells in 1 month
2) House B sells in 9 month
3) House C and D do not sell and are taken off the market.
4) House E is listed for 5 months then taken off the market then relisted with a new agent and sells after 4 months.

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Watty
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Re: Selling Home - When to Reduce Price?

Post by Watty » Mon Jun 17, 2019 8:45 am

Broadway2018 wrote:
Mon Jun 17, 2019 7:39 am
Appraised last year at $406k - added deck and fence for $20k since then
Zillow estimate is $421k
Forget the zillow estimate, those are no more reliable than a fortune cookie.

It would be good to look at how you came up with your $425k listing price. It may not be a coincidence that you it is so close to the $426k that your numbers add up to.

If you just told the real estate agent about the appraisal and adding the deck and implied that you wanted to list it at $425k they would likely agree to list it at whatever you want just to get your listing.

Yooper16
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Re: Selling Home - When to Reduce Price?

Post by Yooper16 » Mon Jun 17, 2019 8:47 am

Sounds to me that your competition is the "lesser price, less desirable" area, but you are priced closer to the nicer area. Probably not gonna work well that way.

The perceived stability of an area is what creates the longterm value. Sounds like you are in a transitional neighborhood.

Whats the greater likelihood?
1. your neighborhood going the way of the less desireable one or
2. your neighborhood going the way of the more desirable one.

If you need to be out-- you are probably going to have to do a big price drop--- maybe to 380ish to bring in those who do not/cannot go above 399K.

Topic Author
Broadway2018
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Re: Selling Home - When to Reduce Price?

Post by Broadway2018 » Mon Jun 17, 2019 9:46 am

Watty wrote:
Mon Jun 17, 2019 8:32 am
If they are newer houses than yours then they are not really comparable especially if they have better schools.

Someone could get one of those houses for $25K more than yours so may not be discounted enough to make it look attractive compared to those houses.
Our house is 2 years old and the ones in the neighborhood next to ours are between 1-3 years old (no brand new lots left). Also, we are zoned for the same schools as them. If you go a few blocks the other way, they are zoned for less desirable schools.

Anyhow, I guess maybe time to adjust the price by at least $15k or so.

mortfree
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Re: Selling Home - When to Reduce Price?

Post by mortfree » Mon Jun 17, 2019 9:51 am

409,000

Eventually 399,900

Or 999 instead of 000

I am not a realtor.

cherijoh
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Re: Selling Home - When to Reduce Price?

Post by cherijoh » Mon Jun 17, 2019 9:55 am

Broadway2018 wrote:
Mon Jun 17, 2019 7:39 am
My house has been on the market for 23 days with no showings. This seems somewhat normal for my area, though. How much should I reduce the price by?

Home Situation
Priced at $425k
Not in prime area or school district
Homes nearby range from $350k-$500k
New construction and completely updated
A comparable home in neighborhood adjacent listed for $460k but their agent said they only had 1 showing too (DOM 60 days)
Appraised last year at $406k - added deck and fence for $20k since then
Zillow estimate is $421k
When we bought the house, it had been on the market 4-5 months
How can the house be "new construction" and "it had been on the market 4 - 5 months" - was it a spec house by the builder? Otherwise something doesn't make sense - it isn't new construction if someone else already owned it before you.

When did you buy it and for how much?

cherijoh
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Re: Selling Home - When to Reduce Price?

Post by cherijoh » Mon Jun 17, 2019 10:16 am

Broadway2018 wrote:
Mon Jun 17, 2019 7:39 am
When we bought the house, it had been on the market 4-5 months
Broadway2018 wrote:
Mon Jun 17, 2019 7:48 am
We bought the house from the agent and did not shop agents, which was probably a mistake. He is very nice but pretty old school.
Are you saying that he was the listing agent on the house last time it sold (i.e., when you bought it)? And it took him 4 - 5 months to sell it to you? And that this is the agent you chose to sell it again? Why?

It doesn't sound like your agent is very motivated to me. How long of a listing did you agree to in your contract?

And I agree with posters, if you aren't getting people to look at it during the prime selling season, that doesn't bode well for getting it sold later in the year.

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Broadway2018
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Re: Selling Home - When to Reduce Price?

Post by Broadway2018 » Mon Jun 17, 2019 10:39 am

cherijoh wrote:
Mon Jun 17, 2019 10:16 am
Broadway2018 wrote:
Mon Jun 17, 2019 7:39 am
When we bought the house, it had been on the market 4-5 months
Are you saying that he was the listing agent on the house last time it sold (i.e., when you bought it)? And it took him 4 - 5 months to sell it to you? And that this is the agent you chose to sell it again? Why?

It doesn't sound like your agent is very motivated to me. How long of a listing did you agree to in your contract?

And I agree with posters, if you aren't getting people to look at it during the prime selling season, that doesn't bode well for getting it sold later in the year.
No, we found the house in 1 day with this realtor and bought it same day. It had been on the MLS for 4-5 months when we bought it. It was new construction, but already completed when we bought it.

Topic Author
Broadway2018
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Re: Selling Home - When to Reduce Price?

Post by Broadway2018 » Mon Jun 17, 2019 10:39 am

mortfree wrote:
Mon Jun 17, 2019 9:51 am
409,000

Eventually 399,900

Or 999 instead of 000

I am not a realtor.
Just reduced to $399k...hoping that will get more showings.

barnaclebob
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Re: Selling Home - When to Reduce Price?

Post by barnaclebob » Mon Jun 17, 2019 10:56 am

if 23 days with zero showings is normal for your area and price range then there must be very few buyers in your area. When you list a house just about everyone in the market will see it in some way and many of those who are truly shopping should at least come see it. Zero showings means way too high of a price.

cherijoh
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Re: Selling Home - When to Reduce Price?

Post by cherijoh » Mon Jun 17, 2019 11:13 am

Broadway2018 wrote:
Mon Jun 17, 2019 10:39 am
cherijoh wrote:
Mon Jun 17, 2019 10:16 am
Broadway2018 wrote:
Mon Jun 17, 2019 7:39 am
When we bought the house, it had been on the market 4-5 months
Are you saying that he was the listing agent on the house last time it sold (i.e., when you bought it)? And it took him 4 - 5 months to sell it to you? And that this is the agent you chose to sell it again? Why?

It doesn't sound like your agent is very motivated to me. How long of a listing did you agree to in your contract?

And I agree with posters, if you aren't getting people to look at it during the prime selling season, that doesn't bode well for getting it sold later in the year.
No, we found the house in 1 day with this realtor and bought it same day. It had been on the MLS for 4-5 months when we bought it. It was new construction, but already completed when we bought it.
OK, so he was was taking you around as a buyers agent? That isn't really indicative of his ability to sell your house now. Also why was your house on the market so long when brand new? Does that explain why no one is interested now? Did you over pay?

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Broadway2018
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Re: Selling Home - When to Reduce Price?

Post by Broadway2018 » Mon Jun 17, 2019 11:16 am

cherijoh wrote:
Mon Jun 17, 2019 11:13 am
Broadway2018 wrote:
Mon Jun 17, 2019 10:39 am
cherijoh wrote:
Mon Jun 17, 2019 10:16 am
Broadway2018 wrote:
Mon Jun 17, 2019 7:39 am
When we bought the house, it had been on the market 4-5 months
Are you saying that he was the listing agent on the house last time it sold (i.e., when you bought it)? And it took him 4 - 5 months to sell it to you? And that this is the agent you chose to sell it again? Why?

It doesn't sound like your agent is very motivated to me. How long of a listing did you agree to in your contract?

And I agree with posters, if you aren't getting people to look at it during the prime selling season, that doesn't bode well for getting it sold later in the year.
No, we found the house in 1 day with this realtor and bought it same day. It had been on the MLS for 4-5 months when we bought it. It was new construction, but already completed when we bought it.
OK, so he was was taking you around as a buyers agent? That isn't really indicative of his ability to sell your house now. Also why was your house on the market so long when brand new? Does that explain why no one is interested now? Did you over pay?
Yes, he was our agent when buying. At the time we thought we found a bargain since everything else was in the mid $400s.

JoeRetire
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Re: Selling Home - When to Reduce Price?

Post by JoeRetire » Mon Jun 17, 2019 1:06 pm

Broadway2018 wrote:
Mon Jun 17, 2019 7:58 am
Yes, professional photos were taken. If I was not starting my new job next week, I would sell the house myself and drop the price. The realtor commission eats about $25k of profit.
Unfortunately, I know some folks who held on to homes for a long time, hoping to eek out some "profit". They ended up moving, paying for two mortgages, and eventually still selling at a "loss".

The market doesn't care what you paid for a home, nor that there is any "profit" to be made. The market just sets the price.
I don't want to post my listing but will send it to you privately. Our house is in the middle. It's an odd area. A mile up the street is not so great areas and higher crime. A mile the other way and you get nicer houses and better schools. The comparables are the newer houses in the neighborhood next to ours. They are selling for $450k and up but taking 4-5 months.
Those newer houses in the next neighborhood are what you view as comparables. They may not be what buyers view as comparables. The average price for your zip code appears to be far less than what you are asking.

The fact that you are in a seller's market (at least according to Zillow), yet have not sold, indicates that your price is too high.

Good luck. You get to decide how badly/quickly you want/need to be out of there. Sometimes it's just better to take what you can get and be done with it.

Scrapr
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Re: Selling Home - When to Reduce Price?

Post by Scrapr » Tue Jun 18, 2019 12:04 am

Let me share a story on our home sale a couple years ago. We cleaned & decluttered and cleaned some more. Hit the market right when the flowers in the yard "popped". It was awesome. We priced at somewhere at $522k. Knowing that was a bit optimistic. Coming soon sign out for a week ahead of time. First open house....crickets. Nobody showed.This in a market with <1 month inventory. We were doing the same thing you re doing. Question everything. I believe in ripping the band aide off. Make the first cut the one that changes perceptions. We cut price to about $485k. The following weekend the open house was mobbed. The Realtor couldn't talk with us when we called asking if we could return home. There were rumors of multiple offers coming in. But only one came but at $490k.

We figured it was going under the $500k mark pulled in a lot of search terms.

You say this was new construction home. Are you competing with more new construction homes in the neighborhood now? How long did you live there?

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FIREchief
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Re: Selling Home - When to Reduce Price?

Post by FIREchief » Tue Jun 18, 2019 1:44 am

I've sold exactly two houses with a Realtor involved.

One I did wrong: met with a single "highly recommended" Realtor. Went with their recommended price (which I thought was high, and the market confirmed was 10% too high). Close to a month without a single buyer visit. Awful experience.

One I did right: met with three local Realtors who had all sold a lot of houses. Median recommended listing price from Realtor A and Realtor B were identical. Median recommendation from Realtor C was 3.3% lower. Listed at Realtor A/B recommended mean. Lot of views over three weeks, but no offers. Lowered asking price 3.3% and had an offer within a week. Lowered an additional 1.7% during negotiation to close the sale.

Lesson learned: asking price is critical, and multiple informed opinions are both free and priceless (but only before signing that listing contract :oops: )
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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