How to Know When to Drop the Asking Price of Your Home

If your home has been sitting on the market for a while, chances are it can start to get stale. The housing market in Canada has started to ebb over the last year or so and that means supply and demand are coming closer into line. It also means that homes need to be priced competitively or they will be the waning stars of MLS listings.

In Canada, the average home is on the market for about 65 days. If your home has been sitting a fair amount of time beyond that, you may have to revisit some things.

Take action before it gets to the stale stage. Even a minimal drop in price may make a difference and get purchasers looking at your property again. When you’re looking at the overall asking price of your home, reducing the price by a few thousand dollars could do the trick to get you some offers.

Do your research. If you or your agent are considering cutting the price of your home, it may be wise to do some digging about what’s been happening in your neighbourhood. Data will be available regarding how long it has taken homes in the area to sell. You can see which homes sold after a price reduction. Your agent can help you with this.

When should the price drop happen?

Here are a few reasons you might think about lowering the price:

  • You’re running out of time and you want to sell sooner than later
  • You’ve had a lot of attention, but no offers
  • You’re tapped and have no money to make changes or repairs to the property
  • The market is changing
  • There’s no action at all
  • Your home didn’t appraise

When you agree to lower the price, you may actually start a bidding war, depending on market circumstances. Of course, attracting more than one buyer and having more than one offer is to your advantage. Since you lowered the price, you might not get what you originally wanted, but the goal of selling your property will have been accomplished.

After reducing the price

Many agents keep a watch on listings to see when they’ve been reduced. Websites on which your home is listed will reflect that price drop. Your listing agent will likely also add a reduced sticker to your For Sale sign.

The bottom line is the price should be right when listing, but sometimes it doesn’t pan out that way. A price reduction means the price was incorrect from the get-go. REALTORS® know the market and will explain to you the rationale behind their proposed listing price. It may be wise to listen to that expert advice.

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