Price adjustment: A tough choice

in Real Estate by

By Will McCullough
There’s been a common theme in my conversations with other local real estate agents lately. I won’t bore you with numerous quotes but, in general, the theme goes something like this: “I haven’t been this busy since 2006.” For the first time in years, many local agents are once again finding themselves absolutely swamped by a steady stream of potential buyers. For local sellers, this is obviously good news because not only does it seem as if overall buyer interest has picked up significantly, it’s doing so in advance of what we traditionally consider the “busy season.” However, while buyers are once again out there buying, they are, for the most part, buying properties that are priced competitively and “passing” on the rest. If your property is currently on the market, now might be a very good time to take a hard look at your asking price and determine if you may need to adjust it.  One of the toughest decisions a seller may ever have to face is “should I lower my asking price?” In order to answer that question, you may find it helpful to ask yourself a few additional questions.

Is my home being marketed well?
The first step in determining if a price reduction may be in order is to analyze the current marketing for the property. Your agent will almost certainly be happy to review his or her marketing efforts with you. While this topic alone could fill many columns, the bottom line for the moment is to make sure you are satisfied with the marketing and, if not, to work with your agent at making the changes needed to obtain that satisfaction.

Does my home show well?
This is another topic that many columns could be dedicated to but, in short, before considering a price reduction, you may wish to assess how well the home actually shows to a hypothetical buyer. This is a topic to discuss in detail with your agent but, in general, ensure that it is clean, free of clutter and the landscaping is fresh and attractive. You may wish to also seek the service of a professional home stager. While their service comes at a cost, it can often pay dividends. Most importantly, verify that you have addressed any negative trends that may have arisen during past showings and open houses.

Am I not having many showings?
If you have determined that you are satisfied with the level of marketing for your home but are experiencing very few showings, my opinion would be that you should have a serious discussion with your agent about the potential need for a price reduction. In general, buyers are out there buying and, hopefully, that trend will increase as we head further into spring. If those buyers aren’t touring your property, there’s a very good chance that the market is trying to tell you something. While the market may not always be kind, it’s also very rarely wrong.

Am I having a lot of showings but no offers?
In my opinion, this is the surest sign that a property is in need of an immediate price reduction.  Here’s the deal, if you are not receiving offers even though it’s showing regularly (without any real trends in negative feedback), you are almost certainly overpriced. You’re probably close though, just at the higher end of the spectrum when compared to the competition. I personally feel strongly that, once this situation is recognized, you should lower immediately. Reason? If you wait for someone to finally make an offer, enough time may pass that you’ll only get a “lowball” offer because “it’s been on the market so long,” effectively netting you less than if you’d just adjusted earlier in the process when interest was at its peak.
Lowering an asking price is never an easy decision and should not be taken lightly. The best way to avoid this is to ensure that your property is initially offered at a price that reflects what comparable properties have actually recently sold for. However, I hope that you find the above thoughts helpful should you find yourself in a situation where a price adjustment becomes a potential consideration.