When Should I Lower My Home's List Price?

When Should I Lower My Home's List Price?

In a lot of cases, the longer your home sits stagnant on the market, the more it will cost you. But how do you turn a lurker into a hot, moving commodity?

For many sellers, those who have already dealt with renovations and staging, the dilemma comes down to one question: to lower the asking price, or to stick to your guns? Is selling your home more quickly worth the thousands of dollars you may be giving up?

It’s a tricky question, with no immediate answers. Ultimately, every home sale is unique, and it’s vital that you understand the ins and outs of your property and your marketplace before you make any big decisions. To help, here are four big questions to ask yourself before lowering your list price, with our thanks to Realtor.com:

How Are Similar Homes Faring On the Market?

How much time are properties comparable to yours spending on the market? Are they selling extremely quickly, or do they tend to hang around for months on end? Pay close attention to comparable home sales; if houses like yours are moving extremely quickly, but you haven’t so much as received an offer, it may be time to improve your list price or delist the property for a period, in order to re-evaluate the home and figure out a strategy with your real estate team.

Who knows? We’ve certainly had experiences where taking some time to properly stage a home, or otherwise re-evaluate strategy, has led to an offer without having to lower the asking price, but those cases are infrequent.

How Long Does It Take a Home to Sell in Your Neighborhood?

The Chicago marketplace isn’t a monolith. Instead, from West Town to Rogers Park, every neighborhood has its own trends worth keeping tabs on. As you begin the process of listing your home, take careful note of the market conditions for your area, particularly the average amount of time that a home spends on the market. Don’t start panicking – or dropping your asking price willy nilly – consult the data and talk to your agent. 

How Many Homes Around You Have Dropped Their Prices?

Again, it’s key for you and your real estate team to stay on top of trends in your market. In this case, pay attention to how many homes in your area have had to drop their prices. If so, did the new price help close the sale? How long did it take for these properties’ prices to drop? On average, what are the closing prices for comparable homes in your area? If average closing prices are substantially lower than your list price, be prepared to maybe go a little lower down the line.

How Many House Hunters Have Passed Through?

The customer is always right? Not always. But if there seems to be a consensus among prospective buyers, it’s well worth listening to what they all have to say. If lots of buyers have passed through your home without so much as an offer, your real estate team may suggest considering a price adjustment. Be sure to always have your listing agent ask for feedback after private viewings.

You won't always (or even commonly) hear phrases like “it’s a bit expensive” - uninterested home buyers think they're being polite by skirting the issue. If prospective buyers are passing through, sharing feedback like "the bedrooms were a little small", or "it's too far from transportation", what they are really saying is "we've seen other homes that we can afford with larger bedrooms, or closer to transportation." In that case, you're likely overpriced, as you are competing against "superior" properties (from the perspective of the active buyer pool.) It may be time to rethink your strategy.

One way to make sure you start your listing off on the right foot? Bring on a real estate team that knows how to work with the market in your area! They’ll help you understand your unique marketplace, and help you set the price that will be best for your buyers, and your budget.

Have any more questions? Ready to get started? Drop Real Group a line today! And for the latest on market conditions across Chicago, be sure to follow our team on Facebook and Twitter!

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