When do you drop the price?

18 Replies

I listed a flip 3 days a go. Have only had 1 showing so far. At what point should I drop the price a little bit, to try and increase showings?

Unless you are doing a severe drop, or dropping into another category altogether (i.e. from $301k to $299k), lack of showing is in my experience rarely associated with price - unless you have something crazy listed to begin with. Lots of showings with no offers or interest says a lot more about price versus perceived value than lack of showings - how can someone decide that your home is a poor value relative to others if it hasn't showed?

Instead, you might want to talk to your realtor about your concern. 3 days is not a very long time, especially since you haven't even hit the weekend yet. And you are showing in the winter, in (I presume?) Michigan, which probably doesn't bode well for traffic. Finally, dropping the price too soon is a sign of desperation, which will net you lots of low-ball offers.

Originally posted by @JD Martin :

Unless you are doing a severe drop, or dropping into another category altogether (i.e. from $301k to $299k), lack of showing is in my experience rarely associated with price - unless you have something crazy listed to begin with. Lots of showings with no offers or interest says a lot more about price versus perceived value than lack of showings - how can someone decide that your home is a poor value relative to others if it hasn't showed?

Instead, you might want to talk to your realtor about your concern. 3 days is not a very long time, especially since you haven't even hit the weekend yet. And you are showing in the winter, in (I presume?) Michigan, which probably doesn't bode well for traffic. Finally, dropping the price too soon is a sign of desperation, which will net you lots of low-ball offers.

Your right it hasn't been long at all (3 days). I need to be more patient. There are comps on the 60-90k range, mine is at 85k and is a lot nicer in my opinion.

@Keith Jourdan give it at least 2-3 weeks before even thinking about touching the price. We are in the dead of winter and all of my listings are getting far less showings than they would have 2 months ago. Once the snow starts the showings slow down (from my experience) unless your property is a great deal. 

Are your pictures nice? For a flip I hope you used a professional or at least a professional camera to attract people. 

Originally posted by @Jake Thomas :

@Keith Jourdan give it at least 2-3 weeks before even thinking about touching the price. We are in the dead of winter and all of my listings are getting far less showings than they would have 2 months ago. Once the snow starts the showings slow down (from my experience) unless your property is a great deal. 

Are your pictures nice? For a flip I hope you used a professional or at least a professional camera to attract people. 

 https://www.biggerpockets.com/forums/67/topics/266...

Here are a few pics I posted in the flip forum. Let me know what you think. 

@Mike Wallace @Keith Jourdan First, I hope there is a picture of the exterior on the listing. The inside looks nice but you would benefit from wide angle shots with a professional camera. Here is an example of listing I took over. My pictures are the nicer looking ones.  This helps get people in the door. The work you did looks nice and a good camera or hiring a pro will help show it off to a buyer. New buyers spend just a couple seconds going through pictures and they are attracted to the pretty ones :) I hope this helps. 

Their's

Mine

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So I checked out the pics...  It looks like you spent time and effort to make a good flip but your pictures don't show this.   I hope a stove is being provided as its not shown in the pics.  I would spend $50-100 to have the place professional photographed.  You want to be able to tell a story with the pictures.  Remember this is your portfolio and reputation you are building.  Take a look a the link below for how imagery is dynamic and says buy me.  I know the interior is staged, very well I may add.  The pics posted say this is nice but i don't have to be in a hurry to be the first one to look at the house.  I am going to assume the pics posted where ones you took on your phone and that were not posted /use for the relator site.  Remember you want to put your best foot forward to get people's interest.  Everyone knows the place is coming with a furnace so there is no need to advertise this.  Let people discover this when they are in the house.    If you don't want to hire someone, look at what others are posting and mimic the images/view.   You want people to feel and thing they are getting their Million Dollar dream house for cheap price. All while you are laughing all the way to the bank with your profit!

https://www.biggerpockets.com/forums/67/topics/264998-remodel-on-flip-property-just-finished

Assuming this is priced competitively for the neighborhood, I wouldn't personally consider dropping price until after 30 days. As a buyer, price drops get me to take a second look at something, but after three days people may not have had even a first look! 

You will have to weigh price drops against carrying costs. Does it cost you more to wait or reduce the price? The reason I mention that is because the time of year may be a factor. As we move closer to spring there will be more buyers looking. 

One last thing to consider, are you comparing your price to what others are asking or what others have sold for? If the $60-90K is what comps sold for, then your price is at the high end. I am not saying it isn't worth it, just making the observation.

I would say 4-6 weeks unless you're doing a hard money loan and having to pay interest by the day. Then maybe 2-3 weeks. 

I would wait at least a month before I dropped the price. I would also consider offering an incentive to area realtors. Something like an extra 2% commission for an accepted offer before the one month date.

For a couple of houses I've been looking at, in the suburbs of Kansas City, the price drops seem to be on roughly a 4 to 6 week schedule.  One is in pretty good shape and they want about $100k currently; the other needs rehab and they want about $65k currently.  Each drop seems to be roughly 5% of the price.  They are listed through different Realtors.

If there are other houses for sale in the area, look them up on Zillow.  If you scroll down some, there will be a price history for the listing, with dates.

I am not a Realtor, but based on some marketing reports I've seen from one, I have the idea that the MLS has the ability to report on average days on market in an area, and give you price history as well. Maybe log in and push all the buttons and see what happens. :D

How did you price it to begin with? That's the question. Did you talk to a Realtor to help you do a sound analysis on it? I would start there then you can talk strategy.

You didn't really address whether you were working with an agent or not. You're going to get much better exposure on a retail sale when working with an agent. I'm not sure about your market but the team I am on here in Kansas City has had a ton of activity despite the cold and snow. We had 4 of our listings go under contract in the first 2 weeks of the new year. Before dropping the price I would think about how it is being marketed.

Certainly not after only 3 days.

Moreover, not getting the traffic you want may not be a function of price.  It may be a function of the way you are marketing the property.  If you market the way everyone else does, with a "For Sale By Owner" sign in the yard, for example, you'll just be one of the pack.

Think about what is the "sizzle" that would motivate a person to buy your "steak" and market that.

@Keith Jourdan I would definitely agree that your photos need to be updated.  You should never take photos portrait style.  They should always be taken landscape style.

If you are using a realtor and that realtor took these photos, then you need to fire your realtor!  

If you are not going to use a professional photographer, then at least use a camera with a wide angle lens.  A Go-Pro is a good, cheap choice as long as your lighting is good (no flash).  A not as good choice but still better than what you have, is to use one of those 3rd party devices that you can snap on to your cell phone to give you a wide angle lens.  After you take the photos, use a photo editing software like Photoshop to strengthen the colors and touch up where needed.