Is It Time to Reduce the Asking Price of my Home?

Selling Your Home - Pricing Tips from a Real Estate Professional

Many real estate markets in the country are still entrenched in what real estate professionals refer to as a buyers market. The definition of a buyers market takes into count statics such as the, number of months of inventory, the average days of market of property, and basically most simply put, it is the law of supply and demand. When supply is outpacing demand, you are in a buyers market. When it comes to negotiating the buyers have an advantage. Then inventory starts to move, more buyers appear, few new properties come on the market and you start to see a shift. The shift is gradual, it calls for the months of inventory to drop, the average days on market to drop and then you start to feel sellers capable of becoming a bit more demanding. When the seller gets to be more depending you start to feel the shift to a sellers market. In the Fort Lauderdale Real Estate market, mid year 2011, we are in the midst of a shift and you can feel it. It is a slow shift starting in the most desirable areas of town and moving on. This is the same way it will begin in every area of the country. Location, location, location, is that rule of real estate that applies to shifting markets as well.  We are slowly starting to shift from a buyers market to a sellers market and we are still at the point where buyers can’t believe it. It is an amazing thing to watch as buyer after buyer loose out on deals, in shock that there is another buyer right behind them willing to meet the seller’s terms and conditions. What type of real estate market are you in where you live? It’s pretty easy to tell if you look at the facts, if you not sure call any local Realtor and they will be able to answer the simple question, “Are we in a buyers market or a sellers market?”

Knowing the answer to this question, if you are trying to sell a home, is important. It will help you answer the question we asked at the beginning, “Is it Time to Reduce the Asking Price of my Home”? Lets discuss the information you need to gather to answer this question, and I assure you the source for most of it is going to the Realtor you hired to sell your home. If you have found out that you are in a buyers market and your home has not sold, it is time to look at the average days on market. If you have been on the market for more days than the market indicates is average, then there is a very good chance it time to change your asking price. You are not alone in having to take this step most homeowners, have a clear emotional attachment to their property that causes them to see value that outsiders simply will not pay for. The fact that you looked for two years for the perfect paint color, means little today as you go to sell your home. Sometimes the way to get past the emotional aspect is to ask your Realtor to send over information on the last three homes sold in your area. Take a friend and drive by them, and discuss where you really fit, price wise. If you had been priced competitively with these homes you may be sitting with an offer today. If you come home feeling you are priced correctly invite your Realtor to an open discussion and see if there is anything else they feel is affecting the sale of your home.

Finding out that you are in a buyers market and that a price change may be needed to sell your home can be frustrating. Often the initial response will be to say “I’ll wait it out”. This is where it becomes very important to have a family discussion, or maybe some self talk.  The decision before you is, to go or to stay, it is a lifestyle decision. But waiting out the unknown is simply the decision to make no decision. Here are some things to think about as you decide if it is time to reduce the Asking Price of your Home? Is the area you are planning to move to less expensive than it was a year ago? Chances are the answer is yes and chances are if you wait for your home to go up in value that will happen to the area you are moving to as well. So waiting it out will give you a net gain of zero.

If you are in a buyers market, this condition most often goes hand and hand with that you are in a market that is still declining, In this case, with a home that has not sold, we once ask the same question, Is it time to reduce the asking price of my home? Simply the answer is, yes! But it also time to get aggressive and get ahead of the market. Reducing your asking price has nothing to do with the current asking price of your home. It is about discussing with your Realtor, “what is the price my home will sell for today within the conditions of our current market”. And then you want to price the home 5-10% below that number. If the market is declining around you, you can’t price it as if you have discovered the bottom. The buyer is looking for a home they feel will not hurt if they buy in a declining market. They are looking fro you the selling to take on some of that risk by pricing accordingly.  When you become the buyer wherever you are heading you are going to approach your purchase with the same feelings.

Acceptance of market conditions is the first step to getting your home or condominium sold. Thinking of the old adage that you will “return to fight another day” the people who said this understood what they were up against. The same way any real estate investor needs to understand the market. Long term real estate is a great investment, however, if its time for a lifestyle move, this real estate decision is not about investment; do not wait for another shift in the market. Do not let market conditions dictate your decision. Discuss with you family and your Realtor your time frame, and do everything in your power to make that time frame a reality.

I certainly understand that there are situations where a price reduction cannot be done because there is no equity left in a home; once again this becomes a different decision, and one that your Realtor is well versed in and very capable of helping you to explore the options. I strongly suggest that what ever decision you make be based on the facts of your local real estate market and the best source of information about your local market is your local real estate professional, and member of the National Association of Realtors.

About the Author – Eric Miller, Broker Associate at Keller Williams Realty Fort Lauderdale is an award winning agent in the top 1% of Realtors nationwide. If you are considering a Fort Lauderdale Home, or a Ft Lauderdale Condominium, Eric and his team are always here to help. Additional articles by Eric Miller can be found at FortLauderdaleGroup.com Articles.

Eric Miller REALTOR®
eXp Realty Fort Lauderdale
Direct: (954) 383-8170