When should you lower the price of your for-sale home? Here’s my advice.
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When we work with our seller clients, we track how many online visits their listing gets via Zillow, Realtor.com, and so on. We expect a certain amount of traffic based on the home itself, but if the listing doesn’t get as much as we’d expected, we’ll take a look at other listings in the area we’re marketing the home in to find out whether it’s just our seller’s home or if it’s the market in general.
Sometimes homes fail to attract attention simply because the market has begun to slow down, and in those cases, you don’t want to lower your price.
We’ll also monitor the physical activity your listing generates—that is, how many people are actually coming to your home for a showing. If your home is receiving a lot of online traffic but few or no in-person showings, then the price of your home needs to be reduced.
When it is necessary to change your home’s price, you’ll often have to change it by at least $5,000 to even see a difference in the flow of traffic around your home, and sometimes by $10,000 to trigger any offers.
The market is always going up and down and correcting itself, but right now, home sellers need to be careful to price their homes more realistically from the very beginning.
You do have some options, however. Suppose you’ve listed your home for $300,000 and you get an offer from a buyer that requests a $20,000 reduction. Scott Edgin, a friend of mine from Universal Lending Services, shared a tip with my team: If the buyer makes an offer below your asking price, you can buy the interest rate down for the buyer for up to a full point. For the $300,000 home, that would amount to $10,000.
If the buyer were to have gotten the home for the $280,000 they had originally requested, their monthly payment would still be higher than if they’d paid the asking price and asked you to buy down their interest rate—about $70 higher per month.
We’ve found this to be a creative way for sellers to still get their asking price for their home and to give buyers a lower monthly payment. It’s truly a win-win situation.
If you have any questions about this approach, don’t hesitate to reach out to us. We’d be happy to help you.