Reduce price

C - Drop Asking Price: How much?

You'll get the best effect from a price reduction when your new price appeals to a larger group of buyers. In general, the lower the price, the more buyers there are. However, the price cut needs to be such that a new group of buyers will be attracted to it.

For example, if you're considering reducing your home price from $188,500 to $183,500, the effect on increased showings will be next to nothing. A drop to $179,900, however, will get a lot more activity as you are now below another $10,000 threshold (180,000). You'll be appealing to buyers who won't look at anything higher than $180,000.

Suppose you’re sitting at $233,500 and sense it’s time to drop the price. A move to $229,900 moves you below a lower price point (230,000) and is just as effective as a $10,000 reduction (to 223,900) when it comes to getting more buyers in the door.

The purpose of a price drop is to make a home more financially appealing. But it also attracts more buyers.  Make your home more appealing to buyers that are in a slightly lower price range.

Consider the overall pricing of the market your home is in. The difference between a $459,000 house and a $469,000 one is extremely small (less than 2 1/2%), as is the difference between a $975,000 and a million dollar home.

Higher price homes appreciate more in dollars and percentage than their lower valued counterparts. When they are faced with the need for a price decrease, high price homes require larger decreases to be effective.

Real estate agents are aware of the necessity for a meaningful price drop, but they are trickier about getting there. If a drop of $10,000 is warranted but meets with resistance from the seller, the agents simply go for a drop of $5,000. That’s because it’ll be easier to get the seller to reduce the price by a similar amount in the near future than it is to get the sellers to make the logical $10,000 drop in one fell swoop. But then the home will be even more stale on the market.

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