Should I reduce my price?
It depends.
You should always remember this:your price doesn’t matter if the buyer doesn’t like your home. This is one of the most important “real estate truths” I have learned in the last few years. And from what I have seen, many sellers and agents don’t understand this.
A price reduction might be the right thing to do depending on how you established your list price (and your expected sale price).
I have found the best way to establish a list price is to follow a three-step approach:
Determine the value for your home that is historically justifiable based on previous comparable home sales and current pending home inventory – this number is your bottom line number (i.e. your contract sale price should be at this number or above)
Add 3% to 5% to this historically justifiable number to give yourself some negotiating room
Take the number arrived at in step #2 above and adjust it to reflect how buyers use price ranges to determine the homes that fit their search criteria
It is important to note that in a market where home prices are falling, your calculation of the number in step #1 above could be affected dramatically. If you establish an historically justifiable price that is even a little bit above the current market price, with each day that goes by as the market prices fall, your list price will be getting farther away from your market price and perhaps farther away from a successful sale.
The above steps address the more objective aspects of determining your list price. There are subjective aspects you should consider as well. These are the state of the economy, your real estate market, supply of homes on the market, supply of buyers in the market, the buyer profile for your type of home, condition of your home related to your comparable sales, etc:
Consider following the above steps to estimate your list price. If your current list price is justified based on these simple steps then reducing your price might cost you money unnecessarily. If it is not justified, then a price reduction is probably warranted.
(The author, Aaron Cole, is the creator of HomeSOLDin60TM, a proven process that guarantees a home seller the best price in the shortest time. To learn more about SCHC 60-day Home Sale program, visit www.HomeSOLDin60.com or contact an SCHC agent at (864) 322-1220.)
