When? How Much?
If an otherwise well-staged, well-marketed home isn’t selling after a reasonable interval on the market**, a price reduction is invariably indicated.
It all depends on how overpriced the home appears to be.
Toss Out the CMA
Once a home is actually on the market, interest from prospective Buyers ” or lack thereof, if there are few or no showings ” trumps pre-market research.
So, even if the listing agent’s Comparative Market Analysis (“CMA”) suggests that a given home is a good value, if there are dozens of showings and no offers (or even second showings!) . . . cold, hard empirical reality would strongly suggest otherwise.
How much to cut is very much a subjective call, and based on experience. Practically, it also depends on the Seller, who may not be willing to reduce the price at all.
However, in my experience, just like every deal negotiation has its own rhythm and feel, so does every listing.
How Strong a “Pulse?”
At one end of the continuum are listings that just feel primed to sell.
Interest is strong and immediate, first showings quickly progress to second showings, and second showings progress to . . . offers.
At the other extreme are homes that, for lack of a better term, lack any perceptible pulse (that’s never happened to me personally, mind you, but so I hear from other Realtors :-)).
Showings are few and far between, and follow-up interest is zip.
In between are listings that are attracting good attention, but just can’t seem to elicit an offer.
Cold Splash of Water ” or Defibrillator Paddles?
For a truly lifeless listing, a dramatic price concession (“paddles”) is usually in order.
Depending on the aforementioned factors, that can be anywhere from 5% to 15% or more.
For a listing that just seems to need a reviving nudge, a less extreme price reduction is more appropriate ” call it a “cold splash of water” (it certainly feels that way to the Seller!)
That can be as little as 2%, or, if the Seller wants to “bite the bullet” and significantly raise their chances of selling quickly, as much as 5%.
**Expected market time varies directly with price.
In today’s Seller’s market, a $250k starter home in the Twin Cities is already stale after one month.
By contrast, a +$1 million upper bracket home is just getting started.