Seller Resources: When Do You Change Your Listing Price?
Should you stick to your listing price?
That's one of the problems in real estate. There is rarely a "cut and dry" answer to any question. Answers are more like, "if this...then that...but..."
However, we'll just talk about prices, rather than condition, location, and all those "other" variables. There are enough variables just dealing with price.
So, during the first weeks the house was listed, was there plenty of agent and buyer activity, but no offers? If so, there is probably no need to immediately drop your price unless you have some special motivation to sell quickly.
If no one is coming around, though...this may indicate a problem with your price. The first thing you need to consider is whether there is a reason to think you are overpriced.
Some homeowners do mistakenly overprice their home. They occasionally base their price on what they "need" to net from the sale. Others mistakenly base their price on what they have spent improving the property.
Neither method works.
One method is like tying to sell a $72 stock for $80, "just because" you want $80. The other is like trying to sell the same stock for $80 "just because" that is what you paid for it.
The market is the market.
A $72 stock is going to sell for $72. Today. Tomorrow might be different.
Sometimes it is a seller's market, sometimes a buyer's market, sometimes it is a balanced market, and at other times...it is a changing market.
If you analyze how you priced your home initially and determine that you did not overprice (either purposely or mistakenly), it could be that the market has changed.
You say that happens gradually?
The market can change suddenly. One homeowner could put his house on the market in June and receive multiple offers within days. A month later, a nearby neighbor could put an identical home up for sale at the same price and...
It could be a number of reasons, but in this article we are focusing on price.
In June 2003 and July 2004, interest rates shot up over one percent in a matter of weeks. Sometimes it happens faster than that with a greater change. When it does happen, sometimes there is a sudden flurry of buying. Buyers want to get their home before rates really go up. Then, the flurry is followed by a equally sudden slowdown while buyers wait to see "what happens."
Interest rates aren't the only reason the market turns.
The point is that a listing price set 60 days ago may not always be the right listing price for today. Today's listing price may not be right 60 days from now.
In the end, this is what you should do...
If you made a "mistake" in your listing price, "fix it" right away. If you did not, then reanalyze your price policy every 30 days...just to be sure.
Copyright February 2005 by RealEstate ABC