Promoting Your New Price
If you have time, energy, and patience, you can try to maximize your selling price with a disciplined approach to top-end pricing. However, most owners aren’t that disciplined, so promotion methods are provided.
Structure a timeline for a planned drop
If you are hell bent on trying a higher asking price and know where you may end up, you can save money and avoid “panic pricing.”
Follow these steps to chart your course:
1 Look at your realistic selling price. Let's say, for instance, your house should sell for around $230,000.
2 Find your top and bottom range for your house. You know you should sell above $225,000 but the 230’s are probably the top end of reality.
3 Set three price points: top, middle, and bottom.
4 Price the house near your top end.
5 Have an open house or two and get some good traffic through your house. Make sure your house is well marketed.
6 Wait a month–more or less–depending on the selling season. If you have no realistic offer, move to your second price.
7 Repeat steps 5 and 6, moving on to your low-end price.
Remember, this method is not designed for a quick sale. It’s for those who want to gamble a bit to get a higher price. Its advantage is that it’s structured to prevent “panic pricing” that can end up costing you money.
Creatively and carefully promoting a price cut
In a workshop, sellers were asked if they would "promote" a sizeable price drop of their property. Most indicated a resounding "yes".
Later, the same group was asked, if they were in a buying situation, what they thought of a home that had recently received a hefty price reduction. The same group felt that the sellers were desperate. Surprise, surprise.
Some buyers feel that they're getting a better deal if the home was originally priced higher. However if it was considerably higher, they're left to wonder just what is wrong with the house that warranted such a large drop.
It’s recommended to initially promote a reduction, and then "hide" this price change if it still hasn't sold in two of weeks. If you have to drop it again, a perpetual sign “REDUCED” may appear to be the original drop and not cause any increased interest.
Ways to promote a price drop:
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. 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 and it appears in the listing comments on the MLS. It's effective because most agents don't think about doing this.
Why hide a price drop:
Avoid staleness: The effectiveness of a price drop quickly decreases. Conceal the fact that you dropped your price within two to three weeks after the decrease. You don't want the attention to shift focus from the price drop to the fact that no one snatched it up.
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.