Is your home on the market, and it hasn’t sold yet? Is it time for a price adjustment? This week, we’re going to tell you.
Hi everyone! I’m Tom Pietsch with Tom & Cindy and Associates at Long and Foster, along with longtime associate and super-agent, Jim Patrick. And, what we’re doing today is we’re going to talk about price adjustments. A lot of times people don’t like to talk about that, because they’re going on the market, and they’re all gung-ho, and they’re really excited. And, what we want to talk about what happens if it’s two, three, four weeks later, and the house hasn’t sold.
Step 1: How much traffic are you getting?
So, are they getting people through the house? That’s one of the things that we track very closely, is, how many showings a week are they getting? We’re looking for two to five showings a week, but with a professional realtor, and the key is getting feedback from those showings. So, we’re going to track that agent down and say, “Thanks a lot for showing the house. “What did you think of the house? “What did your clients think? “How do you feel about our price?” If they bought something else, “Would you mind sharing with us what they bought?” And that’s going to tell us a lot.
Step 2: Have we been getting any offers? Have we gotten an offer?
You know, like Tom said, if it’s been three, four weeks, maybe we’re getting that traffic, we’re getting five, six groups through a week. You know, we’re getting decent feedback even, perhaps, but nobody’s bringing us an offer. It means that they are finding better value somewhere else. That we’re possibly not positioned as well as we should be, if we haven’t gotten an offer after a couple weeks on the market.
Step 3: What’s the competition?
Positioning is not something that’s static, and stays the same all the time. We’re tracking things weekly. We’re updating the CMA on each listing that we have, every single week, because things change. You know, have more properties come on the market? What’s going under contract in our price range? Has anything that was under contract gone to settlement, where now we can know what the sales price was? Did they give up any closing costs? So, each week, you’ve got to check out the competition, and make sure that you’re positioned correctly.
Step 4: Did something happen in the market?
You know, for example, a rate change. Obviously, people are tracking the Fed right now, seeing what they’re doing, seeing what’s happening with rates. If those rates tick up, is that going to affect the buying power, maybe for the people in that price range, especially, maybe, the higher-end range? Something like that might mean you’ve got a smaller buyer pool, where you’re actually able to pull folks from to position yourself better.
Step 5: Does re-positioning look bad?
And, a lot of times owners will ask us, either before they go on, or when they need to be thinking about it, they’ll say, “Does this make us look bad? “Does dropping our price make us look bad?” We don’t think so. We think it makes them look smart. The people that look bad are the folks that, they’re on the market, buyers are going through, and they’ve been on 160 days, and the buyers are saying, “What’s wrong with this property?” And so, we think that the smart seller is looking and saying, “Gee, we’ve had people though, we don’t have any offers, we’re seeing that there’s some other properties on the market, like we were talking about, that were a little bit more valued, people are finding, and make that decision, and get it underway quickly. So, when it’s time, you’ve got to just do it.
Step 6: And when is that time? When should you make this price change?
You know, it really, it depends a little bit on the market, on the house. Usually though, if you’re getting the traffic, but you’re not getting the offers, and you’re doing the research, usually within the first couple of weeks, because, as Tom said, you don’t want to be that property that’s on for 120, 160 days at the same price, because, then, buyers are going to come in thinking something’s wrong with it, think maybe they can beat you up a little bit on the price. So, by doing those adjustments after a couple weeks, you’re staying in front, showing them you’re motivated, kind of creating that sense of urgency, instead of allowing the buyer to be in a better position.
Step 7: How much should you drop?
Again, kind of dependent on the research, on where you’re listed. Obviously, an $800,000 home, you’re probably going to do a little more of a significant drop than a $300,000 home. Because at $5000 on a $300,000 home, that might get you to where you need to be, to get an offer in-hand. Whereas, going from $800 to $795, probably not going to move the needle. They probably would have made an offer, if it was only $5000 off at that price point. So, that’s very dependent on, again, on the feedback you’re getting, just what the market’s telling you.
We hope this has been helpful, and, if you’re thinking about putting your house on the market, you know, our job is to get you hitting the ground running. And so, we average in our statistics selling our homes in half the time as the average agent on the market, and we get our clients, on average, one percent more. But, we’re there with you, from start to finish, and, if it is a situation where we need to talk about repositioning our price, then we want to do that and help you out.
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