Every seller wants to get the best possible price for their home, but after some time on the market, you may start to question if that’s possible. You start wondering, “If my house is not selling, should I lower the price?” We’re going to unpack the answer to that question and offer an alternative option that can help you realize your dream of getting the best possible price for your house.
Table of Contents
Indications That You May Need to Reduce the Price of Your House
More than one in eight (12.9%) of sellers end up lowering their asking price on their home at least once. No one wants to lower their asking price for their home, but in some scenarios, it’s a necessary step if you want to sell your home. Let’s look at a few situations that suggest you may need to lower your home’s list price:
- You need to sell fast: One reason to reduce your home’s list price is simply that you’re in a hurry to sell. Maybe you’re about to move or you need the cash for another opportunity. In these situations, you can’t afford to wait and see if anyone is willing to pay your original asking price. If the house isn’t receiving plenty of attention from buyers right away, then you may want to cut the price.
- You’re not seeing any interest: If you’re disappointed in the amount of interest your home has generated, this may mean buyers see the house as out of their price range or don’t believe it’s worth the list price. Many online searchers may not even see your house in the listings if the price is just a bit beyond the cap of their budget. Adjusting the price may generate more interest.
- You’re not getting offers: You may have plenty of interest in your home, as evidenced by lots of showings, but the interest isn’t going anywhere. In other words, no one is making an offer on your home. When that’s the case, you may need to reduce the price to grab the attention of buyers who have already looked at your home, as well as new buyers.
- The house needs some work: One problem some sellers run into is that their home needs some work, but they can’t or don’t want to invest in making the necessary improvements. That’s fine, but when you’re passing on the responsibility to fix up your home to the buyer, then the price should reflect that. So, if necessary, lower the price to account for the cost of the repairs a buyer would take on.
How Long to Wait Before Reducing a House Price
So, your house didn’t sell on opening weekend, but how long should a house be on the market before it sells? The answer depends on a variety of factors, including where you live, what the market is like, and more so, there is no one-size-fits-all answer. To give you a general idea, though, Zillow reports that the average home sells in roughly one month. When your listing is beginning to near its typical “shelf-life,” it’s time to breathe new life into the listing by reducing the price.
To get a better idea of whether your house should stay on the market at its asking price for longer, do some research to find out how long it takes similar homes in your area to sell. If you are selling a luxury home, for example, you may find that similar homes stay on the market for several months before the right buyer comes along.
If your real estate market is decreasing in value from month to month, then you should reduce the price to sell your home right away. Or, maybe, if you put off reducing the price or reduce it by a smaller margin than the market is losing each month, then your house will remain overpriced to buyers.
How Much to Drop a House Price
Once you’ve decided to reduce the listing price for your home, you’ll need to decide how much to drop the price. According to Zillow, the average price reduction on a house is 2.9% of the property’s current list price.
Some sellers approach a reduction in price cautiously and reduce the listing price by an even smaller percentage, but this tends to be a poor strategy. That’s because if the price cut is so minor it doesn’t attract new attention to your house, then you’ll end up having to adjust the price again and again. Multiple price cuts on a listing tend to scare off potential buyers since it makes your listing look undesirable. Buyers may wonder what’s wrong with your house that has kept it from selling.
The better strategy is to aim for only reducing the list price on your home once and to make the change in price substantial enough to get new attention from buyers. If you’re in a big hurry to sell your home, then you’ll want to make the price cut even more substantial. A great list price on a home can attract enough attention to start a bidding war, which may lead to a buyer offering more than that low list price anyway.
A Better Solution to Selling Your Home
If you really want to move your home fast and get the best possible price, then you should consider a different route for selling your home — an auction. Selling your home at auction has some major benefits. For one, it’s a much simpler process. It also guarantees a certain timeframe for selling your home, so you don’t have to worry about waiting for months on end for your house to sell.
These aren’t the only reasons, though. Selling at auction can often help you close for more than you would in a typical sale. If the market is slow and losing value each month, then selling quickly makes it more likely that your house’s value will remain intact rather than dropping with the market. Even if the market is doing just fine, the reality is that people are often willing to spend more money on a home when they’re bidding on an auction than they would in a negotiated sale.
A sellar’s dream is to have a bidding war over their property, so why not sell your home in a way that is designed to create just that? With an auction, there is a set amount of time for excited buyers to try to outbid one another, which can lead to some fantastic results.
Some sellers may think of an auction as a last resort after their home has been stuck on the market for months or even years, but this is the wrong way to think of it. You’re likely to experience the best results from an auction if you go straight to auction or quickly convert your listing to an auction before ever reducing the list price. So, don’t hesitate to take advantage of this opportunity for selling your home.
Sell Your Home at Auction with Cates Auction & Realty Company
We understand that selling your house through an online auction may feel unconventional or unfamiliar, but you can feel confident when you choose to auction your home with Cates Auction & Realty Company. With over 75 years of experience, we understand the real estate industry inside and out, particularly when it comes to Kansas and Missouri.