If you’ve been following along diligently the past few weeks, you know what stale listings are and how to avoid them and you’ve seen firsthand what happens in the life of a listing. Now it’s time to find out when you should bite the bullet and reduce your list price because that’s your best move.

Price is the single most important factor in the marketing of your home because buyers care about price more than anything else. Your list price plays a big role in determining not only your sale price, but also how quickly your home sells.

Why would you ever reduce your list price? Simple – to sell your home more quickly. You can try different marketing tactics if you’d like, but nothing will speed the process up more effectively than a price reduction.

When should you reduce your list price?

• When your price is too high relative to the sale prices of comparable homes. Buyers shop around and are educated. If your price is too high, they’ll just buy a similar home for a lower price.
• When your price is in line with the sale prices of comparable homes, but you need to sell it quickly. Perhaps because you’ve already bought a new home, for example. Reducing your list price in this situation gives buyers a compelling reason to choose your home over the competition.

When should you NOT reduce your list price?

• When your price is in line with the sale prices of comparable homes and you’re not under any pressure to sell. Chances are your home will ultimately sell for its fair market value. Why reduce the price and sell it for less than fair market value if you don’t have to?
• When your home is unique it may take more time for the right buyer to come along. Reducing the price won’t make that buyer come along sooner. It’ll only give that buyer the opportunity to buy your home at a lower price.
• When you’re only prepared to sell for a certain price and are prepared to wait as long as it takes to get it. This is a dangerous game to play, especially if your price is too high relative to the sale prices of comparable homes.  If you’re lucky, you’ll find a buyer who likes your home enough to pay a premium price, but if you’re unlucky, your home might sit on the market for what seems like an eternity without selling.

Bottom line: Reducing your list price is a powerful tool to use when you want to sell your home more quickly, but it’s not always necessary. You shouldn’t do it unless you have a good reason to do so because it may result in you selling your home for less than you should. Don’t let anyone talk you into reducing your list price needlessly. Knowing when and when not to reduce your list price will go a long way towards helping you maximize your sale price.

As always, if you know of anyone who’s looking for an honest realtor who really knows his stuff and won’t pressure them, Please Don’t Keep Me a Secret. I really appreciate your referrals. Thanks for reading and don’t be shy if you have any questions or comments!