I love real estate. One of the things that I love about it is that it is efficient. It follows the basic laws of supply and demand. When things get out of balance, it will correct itself. Sometimes gradually. Sometimes with a large recession. To get ahead, it is crucial to look for the signals that the market is sending you.
When your home is not selling, this is a signal from the market. It is trying to tell you something. It may be telling you that your price is too high. Or that your marketing isn’t working.
It takes skill to hear what the market is telling you and it demands that you listen and then act. Sometimes that action is reducing your price.
The risk of not reducing your price
Just as the market is sending you signals, your actions are sending signals back to the market. If people are coming through the door but your home hasn’t sold, the signal is clear: your price is too high.
If you don’t reduce your price in a timely manner, two things will happen. First, your home’s days on market will continue to climb. Second, you send a signal to the market that you aren’t listening or don’t care.
These are real problems that you need to deal with quickly.
The problem with days on market
When a home sits on the market, it sends a signal to buyers that there is something wrong with it. Even if there is nothing wrong with your home, buyers start to assume there is a problem.
Perception is reality. And buyers usually assume the worst. If buyers start making bad assumptions, there is little you can do to change their mind.
The problem with not caring
If a buyer or buyer’s agent thinks that you don’t care about DOM, they imagine working with you in the buying process. Will you be unresponsive? Will you consider their terms? Are you serious about selling your home or is this a waste of time?
If the perception becomes that you are hard to deal with, you are putting yourself at a real disadvantage.
How do I know when it is time?
Listen to the signals the market is sending you. When it comes to pricing, here is my rule of thumb. If a home has been on the market for 30 days or has had 10 showings without a reasonable offer made, it is time to consider a price change.
Like my previous article about the market, start by reviewing our Comparable Market Analysis (CMA). What changes can we find or what information did we miss? Based on what we see, we can decide on the new price point and move forward.
You will get your home sold. The process is not easy but it is straightforward. With an understanding of the market, a great plan, and a willingness to adjust as needed, you will soon be moving on to the next chapter of your life.