It's important to make sure your home is priced competitively at the start so it doesn't languish on the market for too long. However, even thorough research and advice from real estate experts can sometimes fall short. Knowing when to lower the price of your home is a delicate decision that should factor in aspects like market conditions and your own personal motivations.
Price It Right
Before you put your home on the market, you should thoroughly research recent, comparable sales of similar homes in your area. Factor in whether your home is older or newer than these homes, as well as the overall condition and exact location. You should also consult a real estate agent or other expert in the field for help. This information will help inform the price you set. Your own urgency in making the sale is important, too. If you're in a pinch financially, it might be best to price your home lower than the competition so it sells quickly. An overpriced home will turn off buyers and can cause you to lose money in the long run.
Sitting on the Market
In a seller's market, houses for sale attract the most interest within 21 days of entering the market. You shouldn't panic if you hit this benchmark, but you should be aware of the level of interest in your home to this point. If you get 10 showings and no offers, it may be time to reevaluate the price. If interest wanes, it might be time to think about lowering the price. Dropping the price slightly may reignite interest; if the market is competitive enough, you may incite a bidding war, where multiple buyers jockey for the sale.
Housing markets are constantly in flux. If your home is on the market when a recession hits, or when the housing market in your area suddenly loses its vitality, it may be an indication you should lower your price. New homes in your area can increase competition, too, so you should keep on top of developments in your area that will affect the value of your home. Check the listings in your area constantly while your home is on the market to learn about your competition, and to gauge market trends.
Your Personal Circumstances
Your personal circumstances might affect the urgency you feel when selling your home. Medical emergencies, family struggles, marital discord and financial issues can pop up at any time, influencing your decision to sell your home. Or, maybe you've simply bought another home and can't afford to pay two mortgages, thus shortening your timeline in selling your home. Lowering the price of your home below market value will draw increased interest, helping you sell faster and ease financial burdens, or helping you quickly change living arrangements.
Megan Hill is a Seattle-based writer with more than 10 years of experience. She has served as a writer and editor for websites and nonprofit organizations, as well as a reporter for magazines such as "Seattle Met," "Seattle Magazine" and "Edible Seattle."