How long before lowering price?

21 Replies

My partner and I recently completed our first rehab in South Philly (woohoo!) It's been on the market since mid-July, and it's priced in the range of nearby comps, though perhaps on the slightly higher side.

We've had a couple open houses and some interest, though not as much as we'd hope to see at this point. Our agent is thinking of lowering the price (from $300k to $289k) to generate a little more interest. 

In general, especially for agents out there, how long would you leave the house on the market before lowering the price? And by what percentage?

@Nikki Taylor

In my opinion Philly is a softening market at the moment with lots of inventory and more hitting the market each day. I’m not an agent, but any agent will tell you that properties don’t sell for one reason and one reason only, the price.

Philly is still a hot market and for a “desirable” property to be sitting that long is odd. Perhaps it’s the price, perhaps location, perhaps the rehab.

It would certainly help if you posted the link to the property so that everyone can give an educated decision.

It's going to vary greatly by city and state.  For example in my city houses sell within a week no matter the condition.

Have you received feedback from any of the potential buyers or buyers agents?  It's possible it could be perceived as too high of a price.  So many other factors contribute to this such as the area, neighbors, etc.  If your realtor thinks it's a good idea you should really think about it.  There is always the possibility multiple buyers come to the table getting you that higher price.

About 5 years ago we tried to sell my grandparents house. The house had a brand new kitchen, and the basement, bathroom were all redone. 3 buyers in a row backed out. Followed by 2 more. Long story short one of the neighbors had a dog that was barking nonstop in the evening. My grandparents were hard of hearing so they never heard it. Apparently it turned off a lot of buyers. The HOA mailed out a flier to each house about keeping animals quiet at night. 6th person came in and bought it.

Prices are all over the map according to Redfin. Your property did not hit the 30 day mark but are the showing deceasing ? If there are not at least 3-5 showings a week a price cut is mandated.  I like your realtors suggestion and would reduce price every 2 weeks based on the amount of showings ... The fact that your location is a negative does not help your situation.. Do you have a loan to worry about?  

Nope, we were lucky not to have had to take out a loan for this project, so there's not really an immediate need to get the house sold. Taxes are also really low so overall holding costs are negligible.

We're averaging about 3 showings a week, but it does feel like it's slowing a bit recently. The recent open house was really poorly attended as well (probably doesn't help that we listed in the middle of the summer!)

I'd start by lowering to $299k.  Then consider the $289k in a couple weeks. The inside looks great.  I don't really love that outside photo. Is the window reflecting something?  It just looks messy/sloppy to ME.  Again, the inside looks awesome though!

First off, beautiful rehab, you should be proud! The location isn't awful, but I noticed you don't have central air? That's a big miss I'd think. 

In this market, two weeks and no offers, it's time for a reduction. My wife is an agent and her office policy is to drop the price after two weeks with no offers (unless you hit some holidays/awful weather/etc.). Also consider dropping the price to just below what it should sell for to really generate some interest. I don't know this area or the comps well enough to give an opinion on price but the silence from buyers speaks volumes. This was your first one, if you get out of it and don't lose money, you did great! Don't hang on too long, rack up a ton of holding costs, then end up selling for less than you could've gotten if you'd just dropped it to the right price in the first place. This market isn't picking up steam so it could be very easy to get behind it, which would mean you'll have to keep dropping your price even more to try and catch up. 

Theres one on the same block at $279k under contract right now, and that took 10 months to go under contract. Id drop it to at least that. $10k price drop wont move it.

Thanks for the input everyone! And thanks for the compliments on the rehab. We did most of the work ourselves, so a lot of blood sweat and tears went into it!

Troy, yes we decided not to go with central air since the house had beautiful old radiators and we weren't sure in the end, if it would be worth it. I'm sure there are definitely buyers who are immediately not interested just because of that fact, but our realtor seemed to think it wasn't a necessity to sell the house. But yes, that is probably a factor impacting on price as well.

Good point overall on not getting behind the market too.. it would definitely be a shame to have to keep lowering it while it sits on the market for months.

@Nikki Taylor Depends on price range and interest but generally 100 percent of time its 2

weeks to 2 months and then 95 percent of time 2 weeks to a month on a flip.

On properties over 400k which is a higher end pricepoint in my market they take longer

to sell.

A 11k drop to me is nothing. It would have sold at that price with that long on market already if thats the price you wanted.

@Troy S. and @Mayer M. nailed it, it shows super nice and looks clean but in this pocket that far south you need to finish fully the basement and add central AC to keep up. You probably saved a good deal on the rehab but as a result shooting for the 300k will ultimately make it sit longer and that can have a cyclical affect. I would make that drop even a little lower that the 289k to move it and invest into another project so you can still sell while the season is hot. I'll follow up in private messenger but your agent is really swinging for the fences on that  

@Nikki Taylor

Im not an agent nor in that area but I usually offer incentives to buyers at that price point.

2% Helping with closing costs etc. Usually first time buyers are coming in with little money.

@Nikki Taylor I would have listed it at $299,000 instead of $300 to begin with. Almost no difference, but those $50K or $100K milestones seem big psychologically. So many buyers are going to try to stay under $300K for example. 

At this point, follow your realtors advice. I would also plan to drop again in 3 more weeks. Keep dropping as we move into fall. Once you get past Thanksgiving it gets harder to sell as winter sets in. Price drops usually move the listing up in a buyers cue so they see it again. My guess is people liked it, but at $300k it was just out of their range. Price drops let buyers know you are motivated to sell and it helps attract offers.

Looks good in the pictures, so this seems to be all pricing that is stopping it from selling. 

Originally posted by @John P. :

I'd start by lowering to $299k.  Then consider the $289k in a couple weeks. The inside looks great.  I don't really love that outside photo. Is the window reflecting something?  It just looks messy/sloppy to ME.  Again, the inside looks awesome though!

Exactly. I would never list a property at a flat $300k. To me that sounds like a lazy or rookie pricing move. $299,990 if you want to be close to $300k. It's a psychological effect. It's the same price but people see 2's instead of 3's. Also, if I was going to drop the price significant, I'd probably pull it from the MLS, let it clear and then relist it so it shows as a "new" listing.

 

Either you trust your realtor and you should go with what they say or you don't , and then you should find one you do trust. This business is all about the team you have. If they're solid, then you follow their advice.

Drop that thing and get it sold! Your realtor is suggesting an 11k price drop. In the long run.... thats nothing. Peak season is coming to an end, holidays around the corner and people getting nervous/worried about a down turn.

$289k and have it sit again. I drop it to $279k and lets really draw some attention to this thing and get it sold asap. Lots of things are important in selling a property but the bottom line most important is Price nothing else matters.