Reduce price

D - Price Reductions: How should you promote a reduction?

HelpingHomeSellers recently completed a workshop with sellers who were asked if they would "promote" a sizeable price drop of their property. By a unanimous agreement, all indicated a resounding "yes". 

Later, the same group was asked, if they were in a buying situation, what they thought of a home that was being promoted with a hefty price reduction. The same group felt that the sellers were desperate.

 How you promote the price drop of your house is a judgment call. Consider that some buyers feel that they're getting a better deal if the home was originally priced higher (as long as the previous price was not ridiculous). If it was considerably higher, they're left to wonder just what is wrong with the house that warranted such a price drop.

The method that works best is to initially promote a drop in price, and then "hide" this reduction if it still hasn't sold in a couple of weeks. 

Ways to promote a price drop:

• For sale sign: A “PRICE REDUCED” sign rider generates interest. A rider with “NEW PRICE” gives the same message–with a more positive tone.

• Info box flier: On your fliers, cross off the old price and write boldly “NEW PRICE” followed by the amount; accent with a yellow highlighter.

• In-house brochures: Cross off the old price and write the new price in bold print. Be sure to also write “Just Reduced.”

• Newspaper ads: “JUST REDUCED” is a better attention grabber in a classified ad. This works for about two weeks before it becomes stale.

• MLS: If your home is listed, the MLS will automatically alert all agents of price changes through their daily “hot-sheet” notification. Have your listing agent also mention the price decrease in a “Remarks Section” that is a common part of the listing sheet and is given to the buyers. It's effective because most agents don't think about doing this.

Ways to hide a drop:

• Avoid staleness: The effectiveness of a price drop quickly decreases. Conceal the fact that you dropped your price within three weeks after the decrease. You don't want the attention to shift focus from the price drop to the fact that no one got excited about it.

• Eliminate this promotion: If you need to reduce your home price again, reprint all promotional materials so that only the one latest drop is highlighted. Advertising and any MLS references to the price drop should be withdrawn within three weeks following the drop.