Real Estate Watch – Voak Homes
When It’s Time to Drop Your Price, How Much Should You Drop?
We in North County are lucky. Most homes sell pretty quickly (okay, those of you sitting on $3M homes for sale, you are the exception right now). However, there often comes a time as a seller when it is necessary to reduce your asking price. Before doing so, you should of course look at your marketing. Do your photos make your house look as good as they should? Is it staged well? Do you have a 3D tour and a live video, and are they being seen by buyers? How many people have seen your home on the MLS, Zilllow, Realtor.com, Facebook? Your agent should have a good case for lowering your price. The tired solution of “it hasn’t sold, so let’s drop the price” should not be blindly accepted.
I tell my new sellers that I am going to invest a lot of money selling their home between photos, 3D tours, live video, social media marketing campaigns, and Market Premier Launch Parties. My goal is that every potential buyer for your home is aware that is it on the market within five days of it hitting the MLS. If I do that, one of three things will happen: 1) It will sell. 2) We will get a lot of traffic, but no (or low) offers – that means buyers liked the online presentation and marketing and saw the value, but didn’t like something when they got to the house. My job then is to find out what went wrong. 3) Nobody comes to see the house – this means they saw all the advertising and house specs, looked at the price, and decided we are priced too high.
My job when I list your home is to be your home’s advertising agency. If I do that well, and we agree that the home is correctly marketed and still no buyers show up, then and only then do we need to look at price. But if price is the problem, how far should you reduce the price? In San Diego, homes typically sell within 3% of their asking price. So, if your asking price is within 3% of the perceived market value, then you should be seeing offers. If you aren’t, you need to drop at least 3% to have a realistic chance of attracting offers (a $5,000 reduction on an $800,000 price isn’t a reduction, it’s wishful thinking). That’s not to say a 1% reduction won’t work, but if you’re not getting offers, you are probably priced at least 3% over market. If you nibble 1% at a time, your home will be on the market longer, causing buyers to wonder what is wrong with it. The 3% reduction might be painful when you were expecting to take more money out of the sale, but history has shown it is the minimum reduction that works.
Scott Voak, the top selling agent since 2008 (data from SANDICOR MLS as of 12/31/2015). Email him to subscribe to his weekly real estate newsletter – Monday Morning Coffee.
Managing Partner, Inland Corridor
CAL BRE #01153157
10815 Rancho Bernardo Rd #390
16710 Bernardo Center Dr.
(888) 311-6311 | Scott@VoakHomes.com