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Reduce Your Home’s Price the Right Way

The first two weeks of marketing are crucial. In that time, if your home has received few showings or offers, price is the most likely issue. It’s time to reduce the price, but do it the right way. 

When a seller reduces the price of their home, it’s natural for buyers to wonder if there’s something wrong with the home which is why you want to price it right in the first place. Buyers may also wait to see if you’ll come down even lower. 

Sometimes you have to reduce the price whether you want to or not, just to get something happening. Markets change - another seller with a similar home undercuts your price, or you priced high to test the market and it found your home lacking. You may have tried to get by without putting money into your home in order to sell it and found that a clean home isn’t enough for most buyers. They want to see improvements and contemporary décor, not a home stuck in a timewarp. 

TheBalance.com says that when it’s time to reduce your home’s asking price, that you should have a strategy. So the first thing you should do is contact your Berkshire Hathaway HomeServices network professional. They will give you a fresh comparable market analysis and identify any new trends for you, as well as discuss target pricing. Together, you’ll look at pending sales that had price reductions, how many days the homes were on the market before the reduction and how much of a price reduction was made. 

Next compare your home to active listings that are near the new price you’re considering. But before you reprice and relist your home (if the multiple listing service allows it), consider the following: 

Don’t panic. You may feel two weeks isn’t enough time, but the market has spoken. There’s a magic number that will re-stimulate other real estate professionals to contact their buyers. It’s never healthy for a home to undergo multiple price reductions, so strive to hit the magic number once and only once.  Make it low enough that your home is near the least expensive homes that are similar to yours. You could go from receiving no activity to fielding multiple offers. 

Recalibrate your marketing strategy. If your listing agent offered you advice before on how to make your home more marketable and you didn’t listen, swallow your pride and ask what you can do to help. You could need to overhaul everything from repainting your home to taking all the furniture out and staging the interior with fresh ideas. You can have new photos and videos taken to reflect the new look. 

Offer an incentive.  You’ll pay the buyer’s closing costs, include a year’s home warranty, or offer a $10,000 or $20,000 discount on all offers. Any of these ideas could be better than going through a price reduction. 

Don’t call it a price reduction. The language you use is important, since you don’t want your home stigmatized by a reduction. Call it a price adjustment or a price improvement! Your real estate professional can put into the marketing notes for buyers to please make their highest and best offer the first time, which politely signals others that competition for the home is anticipated. A price reduction of 3% to 5% might encourage other real estate professionals to show your home and for buyers to ask their agents to show them your home.