When should you reduce the list price of your home?

As most of you know by now, the 2022 real estate market is like none we’ve ever seen in Florida. For a brief period of time, interest rates were lower than they’ve ever been and home prices were still well below that of the rest of the country’s average. But as the desire went up, the inventory began to diminish. This drove home prices up, which caused more people who may not have chosen to sell their homes in 2022 to sell them at a huge profit. 

 It’s a Sellers’ Market

The market is still very “buyer heavy” meaning that there are more people who need homes than there are people who are willing to sell their homes. But that doesn’t mean that every home that hits the market sells within 24 hours. Why not? Because some homes are still listed too high, even in a market that will pay top dollar and then some.

 When to Lower the Price

 In a typical market, if a home hasn’t gone under contract within about 21 days (not a hard and fast rule), a Realtor might suggest it’s time to lower the price. In this market, if a home has not gone under contract within a week, the same is true. While home values are skyrocketing, there is, of course, a ceiling on what a home is worth.

 If a home is not under contract in the first 7-10 days, it’s also important to note that you may not want to “wait a little longer just to see” if someone will make an offer. Buyers will then see your home has been on the market for several weeks and, at this time, that might encourage them to come in with even lower offers because they see the home as having less value since it hasn’t already sold.

 Besides time on the market, another indicator of when it's time to lower your home’s price is the number of showings. If you’ve had 40 people tour your home and you’ve not received a valid offer, something is off. Oftentimes a buyer’s Realtor will leave remarks after showing your home, and your Realtor can share those with you. It could be that there are too many repairs that need to be done, too much updating, or simply that the price is too high. 

 How Much Should You Lower the Price?

 While lowering the price might just be the thing you need to get your house under contract, how much you lower the price is just as important. Lowering it too much might make it appear unappealing to buyers. Not lowering it enough might cause you to lower it a second time, which might make buyers wonder to themselves, “Why does the price just keep dropping? What’s wrong with it?” Work closely with your Realtor to determine what other comparable homes near yours are selling for to try and determine whether you may have priced yourself out of the market on the first round. 

Should you Start with the Price Low?

It’s also possible that starting the process of selling your home with a price tag that’s clearly under market value could push the prices of your home up and over the price you originally intended to list it for. Round Table Realty agents are trained to create auction-style bidding processes that, in some ways, allow the buyers to decide what your home is worth for you.

 Working with an educated, experienced real estate agent is the difference between you getting your home sold quickly at top-dollar and you missing out on some of the equity you’ve built up. Take the time to choose your Realtor wisely!