Several small price drops or one big one? (appraised, 2%, negotiations)
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Our house has been on the market about 6 weeks and no offers have come in. There have been several showings (about 2 a week) and several open houses. We already dropped the price 2% when a comparable house down the street was listed for a lower price. But then that house quickly dropped their price about 2% following our drop. They are very motivated. Our agent suggested we do several small price drops of $1,000 two times a week to drum up interest. I don't really like this strategy since when we were looking for homes and that happened it would annoy me. Why not just make one large drop in price? Hopefully someone can explain this strategy since my realtor didn't do a good job of it.
Also, we live in an area where many buyers are buying vacation homes not permanent residences. September and October and notoriously slow months for tourists here. For this reason I am considering not dropping at all until the busy season starts in November.
I guess I have many questions since have never been in this situation before. We are not living in the property since we have already purchased another one. We are pretty motivated but don't want to give the house away. I'm afraid dropping it at all will lead to a price dropping war with the other home for sale. I know that owner has owned it for a long time and has a lot of equity so they can afford to sell pretty low.
So, wait it out or drop to keep up with the price of the other property? And if we should drop the price, should it be several small amounts or one large one? Any advice is appreciated!
I wouldn't drop anything less than $5K, though it partially depends on the asking price of your house. The bigger the price, the bigger the drop should be, IMO.
But really, think about it. Would you be interested in a house but say, "Gee I like this $275,000 house, but I'm not going to make an offer until they lower it to $274,000."
I'm with you. I don't get the point, and lowering it by such a small amount doesn't show buyers that you're really interested in selling.
You will either look like a desperate novice who is trying to get the last morsel off the bone and not a penny less with small price drops or you will look like you're simply playing games. Do one serious price drop or tell your agent to contact all the other agents and feel them out. He should also be dropping hints that you are willing to see offers on paper. Too many people today are so worried about offending the other party. If people get butt hurt that easily in a offer what are they gonna do when negotiations start? No wonder everyone needs agents
Last edited by Electrician4you; 10-16-2014 at 11:21 AM..
I don't think your agents stategy has so do with attracting people via price, to me 1000 price reduction is waste of time as a buyer but what it will do is pop up for agents every time you do a reduction. In my opinion its just a reminder type of thing. I guess free advertising/ exposure lol. But I don't take them seriously at (1000).
Get the sold comps and figure out what your house will sell for based on what has recently sold that is comparable to your house. Add or subtract for extras you have or don't have.
Drop the price to that amount in time for the November rush.
Blondy is right, take it from a long time real estate broker. Find for sure, if you are considerably over priced, etc., and price the home at the realistic market value.
Cutting $1,000 twice a week, instead of attracting buyers, it will soon be apparent if one waits long enough the house will be free. Both agents and buyers will laugh at you for such a tactic. It says amateur. I would not think the agent has been around a long time, as this not a tactic a long time agent would use.
Many agents move the price of a home up/down in nominal ($1000) increments as an advertising ploy ... so that the property will repeatedly show-up on "price reduced" or "price changed" MLS listings. Some probably believe that this action churns-up added interest in a property and could potentially lead to more sales, but, I doubt there is any reliable statistics to verify.
Ultimately, most properties sell at or near the actual 'market price' for a comparable property in the same area. That's partly because most buyers these days are more knowledgeable and realistic about prices ... than most sellers. Sellers who imagine they will be able to sell their 'special property' at significantly higher than the market' are only kidding themselves. For one thing, most banks will not loan more than the appraised value of the home; for another, Real Estate is still somewhat of a 'buyers market' in most parts of the country.
Thank you for the reply's! My agent said he wanted the listing to be bumped up or to show up often as an update with a new price on the MLS. I don't think we are going to do the small drops though. Trying to figure out pricing based on comps but everything in our area is very different so it is hard to find decent comps. Sizes of land vary along with house size, views, etc. Everything is unique in it's own way. There is a somewhat comparable home in escrow now so we are going to wait for it to close (hopefully it goes through) and use that as a comp. Not sure what the escrow price is. So I guess for now it's just a waiting game.
Thank you for the reply's! My agent said he wanted the listing to be bumped up or to show up often as an update with a new price on the MLS. I don't think we are going to do the small drops though. Trying to figure out pricing based on comps but everything in our area is very different so it is hard to find decent comps. Sizes of land vary along with house size, views, etc. Everything is unique in it's own way. There is a somewhat comparable home in escrow now so we are going to wait for it to close (hopefully it goes through) and use that as a comp. Not sure what the escrow price is. So I guess for now it's just a waiting game.
You need a different agent. This one is playing mind games with potential buyers and the buyers won't like it.
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