The first step in selling a home is working with your real estate agent to prepare a price range. The price range should be established from a market analysis that goes from a low to high price. This should prepare a seller for pro-active price adjustments within a pre-determined period of time in order to create a pool of buyers for a property.
The goal of price adjustments is designed not just around being proactive to the market place, but to keep your house on the MLS (Multiple Listing Service) on the forefront of buyers’ minds. The reason being is that each and every time a property is listed as a price change it’s placed in front of buyers that may not have seen it before. This should be made part of your pricing plan with your real estate agent.
A good pricing plan should look like this:
Weeks 1 – 4 on the market
This is the time period where your house appears on the market as “NEW.” During this time the property is being exposed to all active buyers in the market and advertised by your selected brokerage. During this time period, pricing adjustments aren’t necessary.
This is the time that the first pricing adjustment should be made. This should be a pre-determined adjustment based on the price range, but this should also be the most substantial of any pre-discussed adjustment. The reason for this is that in order to effect a quick sale, the largest adjustments should be made at the beginning of the listing, not toward the end. Early price adjustments make a home look like a “value” whereas later adjustments make sellers appear “desperate.”
The exception to this rule, of course, would be if there are any offers pending on the property in question. Never make adjustments when there is a potential buyer on the line, or they might expect to begin negotiations at a new, lower price.
Weeks 6 – 8
If a home hasn’t sold, and is approaching the 60 days on the market marker, it’s time to make another adjustment. This one, however can be a “soft” adjustment, taking the price down by as little as $2,000. This is primarily to keep the property visible and keep generating new interest.
Weeks 8 – 12
From this point forward, as the house inches closer and closer to the 180 day on the market date, price adjustments should be made every two weeks. The price should be adjusted based on market conditions primarily, but a minimum consideration would be a $1,000 reduction every two weeks.
While sellers can find price adjustments to be difficult, knowing that it cuts into the profit they would like to make on the sale of their home, it’s important to remember that every price adjustment is less time on the market and less of a period of hard negotiations. The stress that a few price reductions can save can be well worth it.