When to Reduce Your Listing Price

Setting the right price for your home is crucial when you are listing it. Even if the price you list is reasonable, it may take a while for your home to sell. Then it’s time to think about lowering the price of the house to get a buyer.

Why is my house not selling?

You have hired a real estate agent to perform a comparative market study in order to establish the value of your house. You and your agent have listed the home at a price you believe to be accurate, you’ve had many showings but no one has yet made an offer.

Why hasn’t the house sold?

Pricing is often the cause of a lack of offers. Most other issues can be ignored if you price your home correctly.

If you choose the wrong marketing strategy, you could find yourself without any offers. If a house doesn’t look good, has the wrong marketing, or isn’t properly positioned in the local market, it might not sell.

Local absorption rates — or the rate of sales for available homes during a certain time period — can also impact your ability to sell fast and at top dollar. If there is a lot of inventory on the market, it’s possible that your house will sit for a while.

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Signs your asking price is too high

Here are some indicators that you might want to lower the price of your home:

  • The most obvious sign that your house is overpriced is if you have little traffic and no offers. To get buyers interested, you’ll need to lower the price.
  • If you receive good traffic, but only low-ball offers, this is a sign that you are very close to the market value, and may need a small price adjustment.
  • If buyers who come to see your home make negative comments about its price, then you have likely set it way too high. A quick way to determine if you’re overcharging is to run a new search for comparable homes in your area. You can see if the price of your home is higher, lower or about the same as those comparable properties.
  • Ask your agent how long homes typically stay on the market. If you have been listing your home for a significantly longer period than the average, it may be time to lower the price.

When is the best time to lower a home’s price?

Experts agree that you should reduce the price of your house relatively quickly. Ideally, within two weeks after you first list it for sale. This is especially true when inventory is low.

The best time to sell a property is the first 21-days after it is listed.

You should also consider indicators of your local housing market. This includes the average number of days that homes in your area are on the market. According to the National Association of Realtors, existing home listings in the U.S. were on the market in May 2023 for only 18 days. Your agent can assist you in determining the best time to sell your home.

How long do you need to have a home on the market before reducing the price?

Some agents advise a price reduction after 10 days. This gives you enough time to hold two open houses back-to-back on consecutive weekends. It’s important to not reduce the price too soon, as buyers will see your days on the marketplace as an opportunity to lower their offer.

You should do a hard evaluation with your broker about pricing no later than 30 days after listing. You can wait to make a change in price, but if you do, your listing may become less appealing to buyers.

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How much should I reduce the price of my home?

Some real estate agents recommend adjusting your asking price as often as necessary to sell your house, but at strategic intervals. While no one enjoys price reductions, you may need to make more than one. As the days of the property on the market increase, so does the need to adjust the price. If there are no showings in a week’s time, you might have to adjust the price.

Some agents recommend a maximum of three price reductions. This is because if you reduce the price more than three times, buyers may think there is something wrong with your property. You must carefully consider the amount that you will reduce your asking price. If your house was initially priced high, you may be able to reduce the price by as much as 4 to 7 percent.

You should aim to reduce the price by at least 3 percent. However, I would also pay attention to how much it will take to reach the next lowest price. Let’s say your home was originally listed at $423,000. You could reduce the price by 3 percent, making the new price $410,310. However, if you drop the price below $400,000 — say to $399,900, for example — your home could be more attractive to buyers because it will appear in searches online for properties below $400,000.

If your price is close to the market value, you can drop it by 0.5 to 3 percent.

It’s always best to decide in advance the lowest price that you are willing to sell for, so you can adjust your price if needed.

Next steps

Pricing correctly is crucial when you are selling your home. You don’t want to overprice your home, as it may turn people away. However, you do want to maximize the profit. It’s crucial to work with an agent to price, list and market your home. You should be careful when adjusting the price of your home. Pay attention to your agent’s feedback and that of prospective buyers who visit your house to make sure you make the right adjustments.