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I search 10-20k above our actual budget because of potential budget cuts and negotiations.
Honestly, I've been watching the market where we plan to go. When I see people drop it a few thousand or even one that dropped $500, I assume the sale price is pretty tight if it doesn't drop it to a new threshold price.
At that point, I would look if I like the house enough at that price, knowing there might not be much negotiating.
To me, a small price drop like that means the Seller is very reluctant to go below his asking price and figures any drop will get attention. A large drop means the Seller means business and wants to sell. I look at them all, however, but with my own criteria in mind as the basis.
We had someone in our condo building who needed to sell and put the price down $10,000 every two weeks until it sold. Now that was desperation!
I'm operating under the assumption that most buyers are searching based on search criteria of prices such as $x00/x25/x50/x75 and we're not able to drop into a new bracket. Property is in Florida so new pools of buyers are frequently entering the market. That being said, would a $3k price cut on a high $300s home magically make you more interested in a home? Or would you have already gone and seen the house and just offered $3k or whatever less if you didn't think it was worth the asking price? Thank you in advance for any insight.
a 1% price cut is ridiculous. I would guess some RE agents wouldn't even entertain that nonsense.
Thank you all for your input. I guess we should have overpriced it from the start to make people think they were getting a deal. Seems to work in retail. hahaha We're fairly priced for the area so we'll probably refrain from any price reductions and see what happens over the next few months.
Thank you all for your input. I guess we should have overpriced it from the start to make people think they were getting a deal. Seems to work in retail. hahaha We're fairly priced for the area so we'll probably refrain from any price reductions and see what happens over the next few months.
If you believe your price is appropriate, and you're getting showings but no offers, then you need to look at why you're not getting offers. Real estate agents always default to "cut the price" because it takes no thought or analysis to say that, and relatively small price cuts don't really hit them all that hard in the commish.
My story: We had a two year old house for sale. Everything was PERFECT - except that there was some wear on the carpet. I thought we ought to suck it up and replace the carpet, my wife thought we ought to replace the carpet, but the agent said "no, no need to replace the carpet". Well, we had some showings, not a hint of an offer. We figured we were competing with brand new construction, and our house had slightly shabby carpet. The agent said "what you've got to do is lower the price". Well, we didn't lower the price, we replaced the carpet. Two showings, two offers, two weeks, sold. Yes, we netted less due to the cost of replacing the carpet, but we didn't have to keep shelling out mortgage payments month after month while people looked at the house and didn't make offers. What it cost us to replace the carpet and sell the house right damn now was about the same or less than the recommended price cut that our own judgement told us would not sell the house quickly.
Use your real estate agent as a RESOURCE, but you HAVE to use your own judgement.
Your own particular story won't line up with ours, of course, but my point still remains that you should take a real hard look at your house from the perspective of a potential buyer and try to figure out what YOUR judgement is for the reason it hasn't sold.
Thank you all for your input. I guess we should have overpriced it from the start to make people think they were getting a deal. Seems to work in retail. hahaha We're fairly priced for the area so we'll probably refrain from any price reductions and see what happens over the next few months.
How is overpricing something gonna make people think they are getting a deal? That's like a supermarket charging $5 for a 2 liter Coke that sells for $1.59 regular price or $1 on sale occasionally.
The deal would only be if you substantially lowered the price right away, and any Agent who lets you list by overpricing the property is not a good agent, they are wasting your time as well as their own.
If you can't sell it seems like it's overpriced or you think it's worth more than buyers do.
Too many people talking in total dollars. Example: 10k price reduction on a 100,000 listing is significant. 10k reduction on a 1,000,000 property is laughable.
It should be percentages. If it's on the market and not selling it either needs a price reduction or condition improvement. Assuming no condition adjustments coming, below are the stats needed to generate a contract.
Lots of showings/no offers = 3-5% reduction
A few showings/no offers = 5-10% reduction
no showings/no offers = 10+%
Too many people talking in total dollars. Example: 10k price reduction on a 100,000 listing is significant. 10k reduction on a 1,000,000 property is laughable.
It should be percentages. If it's on the market and not selling it either needs a price reduction or condition improvement. Assuming no condition adjustments coming, below are the stats needed to generate a contract.
Lots of showings/no offers = 3-5% reduction
A few showings/no offers = 5-10% reduction
no showings/no offers = 10+%
See? What did I tell you? Instant default reply from real estate agent is "drop the price".
Maybe you need to drop the price. Maybe you don't. Maybe there is something easily correctable that is putting buyers off. Use your own judgement.
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