Setting the asking price is always a delicate matter. You don’t want to price your home out of the market and you don’t want to give it away. You really want to ask as much as the market will bear. For this reason, it is best to set your price in accordance with the recent sales prices and the asking price of similar homes currently for sale. If you are rather deliberate in using market statistics, you probably are priced as realistically as possible.
What happens, however, when the dynamics of the market change? Suppose, as an example, that the interest rates rise sharply. This will have a dampening effect on buyers and will affect your home’s salability. Your local economy may suffer the loss of a major employer. Perhaps international news could adversely affect the confidence of prospective home buyers. Or, your immediate neighborhood may have an unusually high number of homes for sale at the same time.
All of these factors are beyond your control. Yet, they do affect you directly. Should you react to any of these changes and if so, in what way? The three things that affect the marketing of your home are its price, condition, and location. You can’t change its location, but you can assure that it is in top notch condition. You should put your home in good shape before you go to market. Don’t wait to fix it up after you realize that you aren’t getting showings. In today’s market where over 90 percent of all buyers come from the Internet long before they ever visit a home, condition and quality photos are crucial.
The most dramatic thing you can do is lower the asking price. This is always a painful decision for every homeowner and most sellers are very reluctant to do it. It may be, however, the only alternative you have to get things moving again. A price reduction is not necessarily an admission that your original price was wrong. It may merely be a prudent reaction to changing market conditions.
ADVICE: Set your original asking price in accordance with the current market realities, but be prepared to follow changes in the market and react accordingly. Use the advice and guidance of your Realtor when making these decisions. He or she has the current market facts and experience to help you.
