Why Price Reductions Work

I have always felt that pricing a listing was one of my strengths.  I keep on top of the comparables and try to know the 'pulse' of the local market.  I study the data and talk to both buyers and home owners.

The past year has challenged all of us who list homes. With very few comparables and nervous buyers, it is hard to know exactly what price will bring in an offer.

Every property has what I like to think of as a 'drop dead price.'  This is the price at which buyers will be unable to ignore the great deal and will feel compelled to write a contract. Right now, finding this price  is like building a house on sand base; things are constantly shifting under foot and no one is sure if it is stable. The drop dead price one week might be the 'dead in the water' price the next.

If you price your home and it doesn't sell (provided you have done the work to make sure it is in fantastic condition) one of the best ways to get people in the door is with a price adjustment. All the marketing in the world will not bring in a buyer if they don't feel the house is well priced.

The price you put on your listing is the price at which you are offering your home for sale. As you gather more information from buyers and their agents, adjusting this price is SMART BUSINESS. In making a price adjustment, you are sending a signal to buyers and their agents that you are aware that your home is worth only what a buyer is willing to pay and that you are willing to work to get to that price. It shows them that you are willing to negotiate and that you are trying to be realistic.

House on a Calculator

Yes, people will make offers on your home in this market.  But if they never go to see your house you can be sure they will never make an offer. If the traffic has slowed down on your listing, maybe it is time to consider a price adjustment.  A change in price might attract buyers from a different price point or bring back buyers who were not interested at the previous price.

Think of your listing price as an invitation. You have put your house out there for the public and invited them in.  The listing price must be attractive enough to get them in the door; once in the door, the house must close the deal!


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Comment balloon 0 commentsHolly Weatherwax • May 15 2009 07:39AM
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