Ask An Agent: How Long Do You Wait Before Reducing the Listing Price?
In this week’s installment of Ask An Agent, a reader inquires about the factors that go into determining when to drop the price on a property listing. Brandon Green of Brandon Green & Associates offers up some insight.
Question: I am interested in putting my home on the market, but it is not the prettiest of properties, and I worry that I will have to drop the price after it is initially listed in order to attract buyers. That said, I want to put it on the market at the highest and most reasonable price. So, what is the general rule as far as when you should drop the price on your property? Does it depend on how many days it has been on the market?
Answer: Obtaining the highest and best price for your home is something that requires a lot of thought and strategy, and your local realtor can advise you on the particular trends and important features that you should pay attention to in your market area.
There are a few things you should consider before making a price adjustment. It is important to find out what similar homes are selling for in your local market, not what the asking prices are. Pay attention to homes that are under contract or have sold and less attention to active listings. Most areas of the country are still declining in value, so you need to price ahead of the market curve by aggressively moving lower than the most recent home to go under contract. If the market is trending up, you can price higher than the last sale.
Making the decision to reduce the price depends on the results you are getting. If a property is on the market with little activity — few agents are showing the place and the open houses are slow — you are likely at least 5% to 10% off the market price. If the property has a lot of activity but no offers, you are probably 3% to 5% off and should reduce immediately.
My rule of thumb is a reduction every 14 days. Keep moving the price until you find the market – and then the property will sell.
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