Let’s talk about this hot topic in the shifting real estate market – when to drop the price of the home? This becomes critical. These rules that I’m going to share with you have been pertinent in any market, and I think you’re going to see why. It’s important to take listings that have serious pricing that the sellers are on board with what’s going on in the market because this is a window of opportunity and it has to be a quick window of opportunity. Number one is right after you list a property, if you don’t have 10 showings within five days it’s time to have the price conversation with your clients.
If you don’t have an offer in hand within 10 showings or 10 days, it is time to not just have the conversation, but to take action. Here’s why. Number one is when you price a property and you’re in line with the market, you should be getting showings. When you’re getting showings, you can now get feedback. When you have that live feedback from agents and from buyers who have actually seen the property, who can actually tell you their point of view, you can pass that on to your sellers. Sometimes that feedback is changeable. Sometimes it’s, “Oh, they didn’t love the paint or the carpet, the flooring’s outdated,” whatever the case may be.
Now, the more homes you have on the market, the more competition you have, which means the more desirable your property has to be. Or it has to be priced perfectly. We’ve seen a market recently with not a lot of supply and a high demand of buyers that didn’t really care if the carpet, paint or whatever may be bad because they just needed a house.
But when you’re in a market that has lots of opportunity, lots of homes on the market, lots of things to choose from, now your home has to either be priced the best or it has to look and feel the best. So when you get people, when you get buyers into your home and you get real estate agents into your home, and you can get that real live feedback, you can pass that on to your sellers.
Some things can’t be changed. What do we know can’t be changed? Location. You have a water tower in your backyard, that’s going to be a problem. You can’t deconstruct that water tower. You can’t pick the house up and move it somewhere else. It’s going to have to reflect in the price, or you’re going to be looking for the right buyer to purchase that home one time.
Unless you’re priced right for the majority of homes, you’re gonna have to look at price. You miss a huge opportunity of marketing because you and I both know that the newer the listing is, the more exciting it is. And so when you’re priced right and you get a lot of activity and you get a lot of buyers in there, then that’s your biggest window of opportunity to get offers and to get that property sold. The longer you go, the more people start thinking two things.
Number one, what’s wrong with that property? There’s got to be something wrong with the property. Do I even wanna see it? Do I wanna waste my time? I don’t know. It starts to become an emotional decision. Number two is, how much can I negotiate and how much money can I get off on that property if I’m going to make an offer, it’s been on the market for a long time.
You also need to know what you’re working with and the mentality that you’re working with. If your seller thinks I want to throw my house on the market and I don’t need to sell it. That’s your risk that you’re taking to commit to that seller. That’s energy that you are using to try and get that home sold to be able to do your job and add to your portfolio as well. So you have to weigh these things and really take into consideration the value that’s on the table. Is it a win-win for all parties involved? Because as agents, it is our job to get top dollar for our sellers. When we list a home, our job absolutely is to get top dollar.
That’s really what you’re doing when you’re listing a home on the market and if the house doesn’t get an offer or doesn’t sell or get 10 showings after 10 days, you should be dropping the price.
Another thing to consider in this point is that when the house is on the market a little bit longer and you drop the price, you’re now either chasing the market if prices are dropping across the board or you’re leading the market. That’s the conversation you also want to have with your sellers. Only one time as well have I had a listing where we listed the property, and when we listed the property, we had zero showings for 10 days. We dropped the price due to that.
I’m not talking like no offers, I’m saying zero people came into that property. Now, in a market that’s shifting, you start to go, “ah, what’s going on?” I started making phone calls to the other agents that were in that area, same exact thing. Because I worked with the agents in the area and was hearing that they were having the same experience that I was, we were able to start digging out further and further because we didn’t have the data to go off of, we didn’t have the showings to go off of, and we didn’t have the feedback to give to our sellers. Here’s what we were finding out, is that this city that this listing was in was just far enough from where most people worked.
It was far enough from where most of the restaurants and inflation was also a big concern on buyer’s minds. Many people didn’t want to drive to this city that just two months earlier had been a really exciting and upcoming area. It changed the perception now, so we had to make bigger adjustments to be able to make that property more desirable for buyers to want to make that drive for that balance to be there in the perception. But that didn’t come because of feedback. It came from working together with the other agents in my area.
You can also do things like open houses on the same day and the same time make it like a festival and an exciting thing for people to come to and draw attention to, to get some of that feedback. If you’re just getting zero activity, you have to start looking at the big picture and seeing exactly what’s going on.
