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We've been listed for just over 60 days with an anverage of 2 showings/week. We had one offer for $20K less than our purchase price 7 years ago that we couldn't convince ourselves to take, but that offer was the absolute most that the couple could afford. (and no, from the responses to our showings, the reason it hasn't sold is definitely not condition).
Our agent says we need to leave room to negotiate in our price, if we can't negotiate, buyers will walk. We don't have more than 10% of the listing price to negotiate with right now as it is.
Would dropping the price from $225 to $219900 make ANY difference? Is the buyer that loves the house but thinks its too high going to offer the 200 they think is reasonable and we go ahead and negotiate? Or do we drop it to close to our bottom limit and then have no room to negotiate? (We're not in a position that we MUST sell, but we're trying to relocate for family reasons, so I don't exactly want to wait around either)
And if anyone finds that crystal ball I left lying around, I'd like it back now please...
SOME agents have evidence that says when a potential has a ceiling of say $220K they will NOT look at anything above that, thus every drop that bring you to a new "round number" exposes your property to a potentially different set of buyers.
SOME agents care more about potential buyers that are SPECIFICALLY watching for price drops and those buyers are more likely to be motivated by larger percentage drops.
Much depends on which pool of buyers the agents have identified as MOST LIKELY to make an offer on YOUR property and THAT can be very tricky.
In some areas a home at $220K is very affordable / a great starter, while in other areas that would be a BIG move-up and people have to feel pretty secure to make that offer.
Price with COMPARABLE SOLD LISTINGS IN HAND and do not worry about negotiation room! If you negotiate till the cows come home but there are no comps to support your price the LENDER will kill the deal and THAT is not good at all!
You have the same dilemma that I have but I am a buyer and will tell you how buyers like me thinks.
I have seen in the area I am researching house closing 90% of list price but I personaly don't like to offer way too low than the list. I prefer to wait until they drop to a point where I can offer close to their listing because I think it is a waste of time. My wife think I am crazy and we should offer what we think is fair (based on comps and other intangibles) even if the listing looks way too high. I think the best you can do is look at the COMPs and price it a little below that you can afford to take.
Good luck to you and I hope no one knows that YOU HAVE to sell and playing hardball with you.
In my opinion price the house right and you will not need to negotiate. Look at the comps in your area. If houses are going for $220 and you list yours at $230 you just cut out a major part of the buyers that will give your house consideration. Price it right and stay firm. This is a much better strategy than over pricing and not getting the traffic that you need to get your house sold.
You may not like the suggestion, but I would price it at $200,000. There is a chance that you will see a lot more activity and maybe bet a full price offer.
If you keep the price, at what in a buyers eyes, appears to be a bit overpriced, you may get caught on the slippery slope of riding a declining market down, down, down.
I am sure your home is lovely, but, frankly, I have never heard someone come on here and tell us their house looks like sh&t.
We've been listed for just over 60 days with an anverage of 2 showings/week. We had one offer for $20K less than our purchase price 7 years ago that we couldn't convince ourselves to take, but that offer was the absolute most that the couple could afford. (and no, from the responses to our showings, the reason it hasn't sold is definitely not condition).
Our agent says we need to leave room to negotiate in our price, if we can't negotiate, buyers will walk. We don't have more than 10% of the listing price to negotiate with right now as it is.
Would dropping the price from $225 to $219900 make ANY difference? Is the buyer that loves the house but thinks its too high going to offer the 200 they think is reasonable and we go ahead and negotiate? Or do we drop it to close to our bottom limit and then have no room to negotiate? (We're not in a position that we MUST sell, but we're trying to relocate for family reasons, so I don't exactly want to wait around either)
And if anyone finds that crystal ball I left lying around, I'd like it back now please...
Thanks for the advice in advance!
I'm in the same position as you. Don't have to sell, but would like to. I was priced at $225K and dropped to $214,900. I was told it wouldn't make a difference. But honestly, when I do a search for homes, I put a set price in and that's it. I felt by lowering the price, it would put me in a lower bracket to interest more buyers. Anyhow, I've had about the same amount of showings as before. I think that alot of ppl are sitting on the fence not knowing what's going to happen with the economy. One other downfall, I know for myself, is all the competition with the foreclosures. IMHO, I'd drop it and see what happens. I would leave a little room for negotiation even if it's just $3-$4K. I know that when I buy a house, I wan't to negotiate to know that I've gotten a deal. Good luck to you and if you find that crystal ball, let me know.
$5000 on $225,000, do not beat yourself up over it. It's been on the market 60 days and in a declining market you should price aggressively, why not try the $219,000. It still gives you some wiggle room.
In my opinion price the house right and you will not need to negotiate. Look at the comps in your area. If houses are going for $220 and you list yours at $230 you just cut out a major part of the buyers that will give your house consideration. Price it right and stay firm. This is a much better strategy than over pricing and not getting the traffic that you need to get your house sold.
This is my opinion also. The only listings that I've had that stayed on the market a long time are ones that the Seller insisted on listing too high.
My neighbor (who didn't list with me but, asked my opinion) listed initally at 329K. My suggestion was 299K. She just sold her house after 20 months on the market with many price reductions for 291K. If she would have listed at 299K she would have sold her house many months ago!
It's a buyers market. You need to price at or below the competition. Your wiggle room doesn't mean anything to the buyer.
Buyers in my area have developed the attitude, "if the seller doesn't take my offer I'll just move to house number two". With rising interest rates the affordability of your property is declining while the price remains the same. If you plan on selling then price aggressive to your market and get under contract ASAP.
Thanks for all the responses! I just wonder if dropping it from $225 to $220 or $215 is going to make that big of a difference? We're so saturated with foreclosures - 81% of first quarter sales in my county were distressed sales. There is a house similar to mine but without a basement, in good shape for a foreclosure, right behind mine going for $174. They started at $205 60-90 days ago. I just don't know how to compete with that - If it's not moving at that price, what difference is dropping mine going to make?
I'm just so frustrated - I know the market is absolute crap, and we couldn't have picked a worse time to relocate. My agent says to hold the price where it is, that our traffic is great, we just need the right buyer. The only comp sale in the last 12months in my neighborhood of 300+ homes went last fall for $226 - and that house didnt have a basement. When I look on trulia for price per sqft of sold homes in our zip code, our listing price is right in line with that - $87/sqft.... and thats actually not quite accurate because our listed sq footage doesn't include the finished basement.
I know that no one can give me a magic answer, I just really appreciate all the good advice.
Thanks!
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Price it right
