According to statistics published by the National Association of Realtors (NAR) in May 2020, 40% of sellers reported reducing their asking price at least once. The decision to lower a property’s price should be made in close collaboration between the real estate professional and the owner or owners. How do you know when it’s time for a price reduction? Here are some indications to consider:
1. When showings drop off
While it’s often natural for a new listing to spur a flurry of interest followed by a drop or plateau in activity, if showings decrease dramatically and stay few and far between, it may indicate that the price is dissuading potential buyers.
2. When online interest wanes
Tracking the number of “hits” and “saves” on listing websites can provide insight about the amount of attention that the listing is receiving. It’s also a good idea to keep records of the number of phone calls and other queries that you receive about properties.
3. When feedback indicates the price is too high
Asking lookers and agents for feedback can offer valuable information about price objections. Leave feedback forms for potential buyers and agents to complete after showings or follow up with agents online or by phone to ascertain their opinions of the house and its value. If feedback consistently mentions price as deterring further interest, it may be time to consider a reduction. Before listing a property, consider having agents from your brokerage or other colleagues tour the home and give you their opinion on what the asking price should be. This can offer you and the sellers a range to consider along with comparable sales and other factors.
4. When traffic declines
If you and the seller have coordinated a listing to take advantage of the peak selling period in your market yet don’t have a viable offer as that timeframe draws to a close, it may be a good idea to lower the price to generate interest before the peak ends. Likewise, if you work in an area that depends on seasonal population for a pool of potential buyers, lowering the price before everyone leaves could be a strategy to consider.
5. When the market changes
The real estate market is always evolving, and national or local economic fluctuations can affect prices, even while listing contracts. Keep track of market variables and comparable sales to share with your sellers if you think prices need to be adjusted.
6. When your sellers need to move on
Sometimes, lowering the price of a listing is a matter of expediency instead of value. If your sellers need to sell their home quickly to relocate, purchase another property, or for a variety of other reasons, lowering the price to spur a quick sale may be worthwhile in the long run.
If you’re looking for ways to boost interest in a listing or to differentiate properties from others on the market, add HSASM Home Warranty coverage. Besides increasing client satisfaction, HSA Home Warranties can help add value to listings and reassure potential buyers that they’ll have budget protection for unexpected covered home system and appliance breakdowns after closing. HSA Home Warranties can also help reduce post-closing involvement, which can reduce your liability and stress.
Contact your HSA Account Executive today to find out how home warranty coverage can help you win more listings and build business through increased referrals.