Every homeowner must set an asking price when listing their home on the market, but what happens when you don't receive any offers? Just as it's important to know when it's time to sell, it's important to recognize the right time to reduce the price.
Supply & Demand
If a lot of homes are currently listed on the market or your home is overpriced, it may be time to consider a price reduction if you hope to stay competitive. If five different stores sold your favorite soda, what would motivate you to buy from one over the others? If you are like most, the cost would be a leading factor. The same is true with home buyers, who are looking to get the best value for their dollar.
Hurry Up & Wait
If your home has been listed on the market for what is considered to be a lengthy time for your area, it may be time to consider a price reduction. This is especially true if you are in a hurry to sell, which may be the case if you are planning to purchase another house upon selling yours. In some cases, a homeowner will make an offer on another house and that offer will be contingent upon selling their current home. When this happens, the homeowner is likely to be in a hurry to sell so that they can honor the terms of their new agreement before it expires. Real estate can often be a waiting game, but sometimes it may be necessary to hurry up the process, through a price reduction, if you need to complete the sale.
Market Value Fluctuations
We all know how the market fluctuates. If you own real estate, property values can go up one year and fall the next. If your house is currently listed and the property values have fallen, you may want to consider reducing the price in order to remain in the running with potential home buyers. If your house is priced far above market value, most lenders would refuse to approve a loan for your asking price. Having an appraisal would be one way to know how much your home is worth.
If you've hired a REALTOR®, you obviously trust him/her to guide you through the process of selling your home. If your REALTOR® suggests a price reduction, it may be in your best interest to consider it. Nobody knows the business like a real estate agent. They know what buyers want and, in most cases, what they are willing to pay. If you've trusted a REALTOR® enough to hire them, trust them enough to value their opinion.