Is it Time to Lower the Price of my Home? | Listing Naples Group | Blog | Naples Real Estate

Is it Time to Lower the Price of my Home?

An overpriced home will sit and stagnate while other competing homes sell in the neighborhood. But, how do we know that the price is the issue and not something else?

Real Estate Advice / Chris

Is it Time to Lower the Price of my Home?

How do we know if your home is overpriced?

An overpriced home will sit and stagnate while other competing homes sell in the neighborhood. But, how do we know that the price is the issue and not something else?

The home is not getting showings.

The average listing hits the MLS (and in turn, Zillow, realtor.com and others) and receives the bulk of the showing requests right away. If your home hits the market, but buyers do not want to see it, there is definitely something wrong with either the price, the condition of the home, or the marketing we are doing on your behalf. We can rule out the marketing, if we are your agents—our marketing is tried and true. Perhaps your price is too high for the condition of your home. Buyers want to feel that they are getting the best home for their money. If your home is in the top tier of the pricing spread, but the condition doesn’t match up, buyers will go for the more well-kept homes.

The home is getting a lot of showings!

This problem can often cause a lot of confusion for our sellers. It feels like a great thing when a number of showing requests come in. Well, a lot of showings without an offer is an unambiguous signal that the home is overpriced.

Sellers will often say, “But, if people liked the house they could make low offers.” I can tell you that through my lengthy experience working with buyers, the mindset of a buyer does not work the way. Instead of making a low offer, I will routinely hear, “They won’t come down that much” or “these sellers are greedy and won’t consider our offer.”

Any offer that comes in is very low

A good, seasoned buyers agent will prepare an analysis of pricing for their buyer in order to make a sound offer. This analysis takes into account all similar homes in the area that have sold and uses those numbers to arrive at a good offer. However, if the offers are very low we know that the detailed analysis is coming back with that lower price. That is what triggers the low offers and lets the sellers know that the asking price is unrealistic.

What factors commonly lead to a price being too high?

There are a number of factors that make the asking price too high compared to the market value of the home.

The condition of the home needs attention.

Does your home look like this?

Does your home need work that similar priced homes do not need? Take a true and honest look at your home compared to the others and see if this is the case. How old is your roof? Does the competition have new roofs, A/C’s, or remodels that your home does not have? Perhaps your remodeling isn’t up to par with the other homes or isn’t appealing to the general public.

The location is unfavorable

Naples is a Mecca for golf. As an example, are the competing homes on the market right on a hole while your home is across the street? Does your home back up to I-75 or another major road? School zones play a big part in Naples real estate! Perhaps the comps you’re using are zoned for a more desirable school. Location is a major factor in price and needs to be examined when determining a price reduction.

The market has shifted and you’re still at old pricing.

We will commonly see a neighborhood lose value. In fact, my own neighborhood just took a huge hit in price because a brand new neighborhood is opening across the street in the same price range! Why would someone choose my neighborhood over brand new when everything else is relatively similar? The answer—they won’t! A blow like this can be corrected by either showing the unique features of the home (and hoping that’s enough of a motivator) or reducing the price.

What is going on in the neighborhood?

Has your neighborhood made changes that have affected your ability to sell? Sometimes the HOA fees will increase which can lead to buyers passing on your home. Perhaps your HOA is financially unstable and a savvy agent has let her clients know about it. Is the HOA keeping up with the maintenance of the neighborhood or is it beginning to show its age? These sorts of factors cannot be remedied other than lowering the asking price.

When all else fails, look at the price.

You’ve looked at the factors detailed above and ruled them all out. That only leaves the price. A price adjustment needs to be enough to counter each of the factors above to cause a buyer to see value in your home over the competition.

Remember the analysis that I mentioned? Buyer’s agents will compare your home to others that have recently sold in order to come up with a fair offer for their clients. That same analysis can be done for the sellers to show a well thought-out justification of list price. Ask your agent to prepare a Comparative Market Analysis (CMA) to show exactly where your home should be priced.

Bonus Tips

  • When lowering the price, always change the main MLS photo.
    Buyers are online looking at homes all day, every day. They look at the same searches over and over to the point where they will actually recognize homes. To get their attention once more, a good agent will change the main picture. That way the buyer sees the property pop up in his feed and he will think, “I haven’t seen this one!” and click again. Your home was ruled out before, but this may be the lure they need to get them hooked!
  • Have your Realtor® change the price at midnight. Realtors® have “hot sheets” that show what changed that day. Most agents look at these first thing in the morning and not again until the next day. Therefore, changing your price at midnight (yes, we will wake up to change a price) will give you a full 24 hours on the hot sheets, which ensures your home will be seen by all agents perusing.

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