It’s the time of year when we see some price adjustments by agents who have tried everything else, to no avail. But how much do you need to reduce the price to cause a sale?
Ideally, it needs to be enough to cause buyers who have already seen the house to come back – that’s how you know for sure that the new price is working.
But have you noticed that every price reduction is advertised as ‘Huge’?
Price-Reduction Guide:
‘Huge’ = 10% or more reduction in price.
The minimum effective reduction = 5% reduction.
Typical reduction = 1% to 2%.
Fake reduction = moving the value-range goalposts.
Buyers are already thinking of knocking off more than 1% or 2%, and to be effective, a price reduction needs to create some real urgency in the buyers – to make them think that if they don’t react immediately, somebody else might beat them to it. The 1% or 2% reductions aren’t enough to create any extra urgency, and as a result, are just throwing money away.
In addition, a new, lower list price will be cross-referenced by the buyers with the days-on-market. They expect at least one decent price reduction per month to keep them interested.
Want it to work? Lower your price by an amount that makes you cringe!
The higher the price, its seems the bigger the reduction % wise. You are gonna see the low end price in the best area’s..the coast, south park get the best or close to asking. In, reality the bottom of the market is being bought out and the more expensive stuff is making the inventory somewhat inflated from what it really is. NO matter what the area…entry level homes, smaller than average or not the best of shape are the safest buy out there with the low interest rates still available. The Coast is gonna go first, the farther from Downtown or La Jolla will be the cheapest but I predict someday..everybody will be saying I should of bought in oceanside…especially 10 years down the road when there will be NO single family houses available in Carlsbad, Encinitas, Cardiff, SB, and Del Mar for under a million…mark my words on this one…so I would not shy away just because you have to pay just close to list price or a bit over, if on the coast.