A price reduction is not a marketing tool it's a financial loss! Reducing your price gives buyers the impression there may be something wrong with your home or that you are in a desperate situation and need to sell now. While this may very well be the case the costly marketing campaign you've chosen has a poor return on investment and looks the same as every one elses. Marketing is about standing out from the competition to gain more exposure. It's a game too few really understand.
When you sell your home there are options you need to consider. Investing a few hundred dollars now could save you thousands in the future.
Option 1: Price it right the first time and according to your needs. Be realistic in what you want and expect from the sale of your home. Hiring a professional Real Estate Agent doesn't mean they decide your fait. The market assessment you receive from them is a guideline of current market conditions but ultimately you are responsible for choosing the asking price.
Option2: Have your home appraised. Getting a professional appraiser to place a value on your home is the best way to determine what it's really worth today. Doing this will make pricing much easier plus you'll have a legitimate report that shows potential buyers the real value of your home.
Option 3: Have a professional Home Staging & Redesign specialist to properly prepare your home for advertising online, print and showcasing. Marketing the appearance of your home is as important as the price itself. The way your home looks is the very first thing a buyer sees. If it doesn't look good it will quickly be dismissed by the majority of buyers leaving only investors and bargain shoppers waiting in the wings.
Option 4: Ask for increased advertising from your Real Estate Agent. Agents usually have set guidelines by which they advertise but may be willing to increase print size and sources for a nominal fee or in some cases for free. Use caution with this option! If your home isn't priced accordingly from the start or if it doesn't show well; this option is a waste of time and money. Agents will be reluctant to spend extra time and money helping home sellers who don't help themselves.
Option 5: Do nothing. By choosing this option you have decided to remove yourself and your pocket book from the equation for success. In the short term you'll be saving yourself time and money but having relinquished all responsibility will cost you thousands in the end.
Just because every one else is doing it doesn't always mean it's the right thing to do. Talk to your local Real Estate Agent or visit our website for more useful information on preparing your home for SOLD!
Call us at (780) 904-4647
email: info@rivercityredesign.com
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Dawna and her team at River City ReDesign are dedicated to helping Edmonton area residents transform their homes into buyer's dreams!
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I agree I see REDUCED signs and think .. hmm so the seller / agent still thinks it is worth more then the "market" . I think it should read "getting closer to realty fokes hang on "
option 6: speak to your local mortgage broker about Strategic Financing, if they do not know what that is call me Dave Woodson and I will tell you, then you can tell them
Dave Woodson
Great points! Buyers watch properties and often know when price reductions happen. They all assume the worse and make offers accordingly. Very insightful info!
I agree with you 100%. If you have to drop the price, you must be asking too much or you are not marketing it to the right people. Remember Rule #1 A house is only worth what someone is willing to pay for it. Rule #2 If you need financing- A house is only worth what a lender is willing to lend for it.
By spending a few hundred dollars, you can see what your home is truly worth based upon an appraiser's view.
All of the options you list are excellent advice. I wouldn't agree, however, that a price reduction is a financial loss. It's not a loss if you never could accrue that benefit (i.e. sell it for what you were asking). I do agree with Eric that "reduced" sign riders are a bad idea. In the event that my clients need to reduce a price, we do it quietly and without fanfare.
Dawna -
A couple of years ago, I would have mainly agreed with you. But now, it's tough to do so!
We do more online advertising than virtually anybody in our market. Take lots of pictures, Visual Tour, Listing Domains Websites - more!
We stage professionally, and provide great feedback, excellent communication.
But all of it would be money down the drain if not for the right price!
Trouble is, now - what IS the right price? Often times, I thought I have it right - only to have lackluster interest. We HAVE to lower the price, quickly, or else risk incrementing marketing time too high. In my opinion, it's MARKET TIME that will hurt you more than a price reduction.
You can always reject a too-low offer, but you can't conger an offer when no one exists.
You need to price right - or what you feel to be right - in the beginning. But, unfortunately, you have to adjust downward as necessary, perhaps more than you would like, in order to get your client's property to sell.
Call or write anytime!
DEAN & DEAN'S TEAM CHICAGO
Great post.
In today's market....who knows. It's all a gamble.
If it doesn't sell it has to be the price, location, or your darn realtor. Right???
Interesting!?
Option#1 You are absolutely right on with "Price it right from the start" however the market and the buyers control the price...it has nothing to do with what a seller needs, wants, paid, what their uncle said, what their neigbor sold for last year it's all about market direction and where the market is going and what a buyer is willing to pay!
Option #2 I personally don't think that this is a good idea. Appraisers are looking in the rear view mirror and don't adjust for market direction to often if ever. And if no sale is involved their is no extra level of accountablity to come in with a real number. Without a lender and 2 agents envolved an appraiser may...and I stress may...take the path of least resistence and simply find enough comps to complete the job. When they have to justify a sale with a lender and agents and buyers and sellers involved they may be more inclinded to hunt for more justification on the price!
Option #3 I completely agree! A beautiful home at the right price will always get top dollar.
Option #4 The right price sells the home...statistics have proven for years that tradition forms of advertising have little or no effect on sales. Please let the professional determine where to spend their money! At the right price your turning down offers...at the wrong price you have nothing. No marketing plan can compensate for a bad price...buyers are to smart!
Option #5 You're right! Nothing gets nothing!
Intriguing and very thought provoking post! So...I agree and I don't...that's why the world is great! Keep up you efforts I'm sure you are an awesome stager...and I like a lot of your comments on your profile page!
I would like to add: Make sure your real estate agent USES the "after" photos that are generously provided by your professional home stager! It is so frustrating to take those photos, email them to the REA, and they are NEVER used in marketing the property! :-( Buyers will cross a property off the list that has no interior photos vs. the one that does. To me it's a "no-brainer"....show off those gorgeous interiors on the internet to as many buyers as possible!
A seller has to come out of the gate strong and serious about selling. It is not a time to experiment or get wishy-washy about a strategy. That's where the research and contact with the professionals will make their product competitive. These are good, honest tips to get sellers thinking clearly. Good post.
Donna, very good points!
The market here has changed. The sellers don't want it to, they want to ride on last years wave. But the buyers are watching the market very very closely these days, if a seller does one reduction, buyers wait for the 2nd, or 3rd. etc. Or come in with a low ball offer. I see this happen everday.
Sellers need to realize this, and market the home properly in the first place.
Heather
Donna,
I absolutely agree that doing nothing but lowering the price is dumbell real estate. With that being said, pricing your listing right has never been a bigger challenge.
If you underprice and it sells in the 1st hour you may have left thousands of dollars on the table and if you over price you are losing time and you could end up chasing the market down.
I believe that after properly preparing your listing (staging, painting ect.) and putting together a comprehensive marketing plan, you do your best to come up with the right price. If it doesn't move in a reasonable time frame you rapidly lower the price in small increments.
Lowering the price judiciously can be valid marketing tool. You just need to do everything else first.