Pricing Homes for Sale ~ How Long Should You Wait Before Reducing Your Price? (Part 2)
Did you read Part 1 – Is Your Home Overpriced?
If not, you should start there so you can decide if your house is overpriced. You should also take a look at the video in How to Price Your Home to Get it Sold.
If you have realized that your house is overpriced, you should talk to your agent about dropping the price right away. Don’t waste another week while a buyer who would love your house if it was just priced fairly price might be getting ready to make an offer on another house.
I’ve seen it happen.
I’ve worked with buyers who were debating between 2 homes that they liked. Both homes met their needs, and they would have been happy with either purchase. While they were debating, another seller dropped their price enough to make it into my buyer’s price range. Sure enough, before making a decision, we would always head over to take a look at this new option…and sometimes it would be the best of the lot.
If you think that waiting a few more weeks might magically get your overpriced home sold, then I suggest you go back to those articles I mentioned at the top and read them again.
But, you do need to give it a little time when you put your house on the market to see how buyers react.
The big questions is…
How much time do you give it before deciding that the you are overpriced?
How Long Does it Take to Sell a Home in St. Louis?
In 2010, there were 17,784 closed MLS home & condo sales in the St. Louis area (St. Louis City/County & St. Charles County) and there were 21,322 listings that were taken off the market WITHOUT selling.
In addition, the majority of homes that DID sell were priced right from the start, or their owners where willing to make quick adjustments to the price once they realized they were overpriced. The result is that 50% of the closed sales got an accepted contract in 60 days or less.
- 0-30 days – 29%
- 31-60 days – 21%
- 61-90 days – 15%
- 91-120 days – 11%
- 121 or longer – 24%
But with half of the homes selling in over 60 days, it may lead you to believe that waiting it out for the right buyer can work. Unfortunately, this simply is not true.
In order to offer our clients the best possible advice and keep them informed on how the market around them is doing, we track all of the competition for our listings and forward a weekly report to each seller. Recently, we started looking at how many days it took after a price drop for a home to get a contract.
Do Price Reductions Get Homes Sold?
You decide. The numbers speak for themselves.
These statistics include EVERY home near our current listings which sold recently that were in the same general price range as our listings. Of the 49 homes that sold, 31% never had a price reduction. The remaining 69% made at least 1 price reduction in order to get the property sold.
The average time it took these homes to get an accepted contract was 49 days.
But how long did it take for them to get an accepted contract after they got to the right price (either by initially pricing it correctly or making a price reduction)?
Answer – 40 days. But that doesn’t tell the whole story.
The chart below shows you how long the homes were at their current price before they got an accepted contract.
Just 6 sellers out of 100 were able to stick with their listing price, refusing to drop their price even though they had been trying to sell at that price for over 90 days, and still managed to get their homes sold.
But with 55% of the people who tried to sell last year never finding a buyer at all, it means that there were over 200 sellers who stuck a For Sale sign in their yard, and just 6 stayed with a listing price for over 90s days and managed to find a buyer.
Over 84% of successful sellers sold their home within 60 days of hitting the right listing price, half of them doing it in 30 days or less.
If I was selling my house, I would be re-evaluating my listing price every 3-6 weeks and making a change that would get my home sold. If I wasn’t willing to do that, then maybe it would be better to just take the house off the market and stay put.