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How To Know You Are Pricing Your Property Out Of The Market
The best ideal scenario for every property seller is to price highly and get an immediate buyer willing to pay the listed price.
But as we all know, ideals belong in a fantasy world.
Perhaps a more realistic positive scenario is to have a steady stream of property hunters viewing your apartment or visit your open house. And an offer comes in every other day to purchase the house outright.
But when very few people are visiting your open houses and never call after viewing just once, you just have the gut feeling that something could be wrong.
The biggest sign that you might have a problem is when nobody shows any interest in your property at all. They are just not showing up or calling to inquire. This is pretty clear cut.
You will have a bigger problem when many people are viewing your property and no one is remotely interested to make a concrete offer. This is a sign that the physical condition of the property does not match up to it’s price tag.
In this instance, even a cheapskate would not waste time insulting your intelligence with a low ball offer.
The hard truth is that no matter how bad a shape your property is in, as long as you set a good price, the odds are that you still going to get offers to come in. The problem is that many people have a hard time seeing or accepting reality.
So when there are no offers, it is an indication that you could have priced your property out of the market.
Before raising the alarm after 1 week without interested buyers, understand that properties are big ticket items. And big ticket items take a longer time frame to judge response.
So it is best to wait for at least 4 to 6 weeks before concluding that something is seriously wrong. If you need someone else’s opinion, ask your realtor about whether it is normal for this to happen on your property in the current market climate.
Problems that can be fixed
Sometimes owners know beforehand that the appearance of the house is in bad condition but list it for sale anyway to test if they indeed need to take action on fixing the appearance.
Once a prolonged period like 6 weeks goes past without genuine interest from buyers, it can be determined that the appearance can be the stumbling block.
You could then undertake staging activities such as adding a new coat of paint, fixing structural problems, patching up wall cracks or even changing the layout of furniture to enhance the appearance of the house.
However, some problems cannot be fixed no matter how bad you want to do it.
The location is the best example. Maybe you are located near a plant that discharges toxic waste or situated in an area with bad transport access.
When you conclude that it is because of problems you cannot fix that is causing buyers to stay away from your property, the last resort could be to push down your asking price.
Talk to your real estate agent
Before setting forth to lower your asking price to an action price, talk to your agent.
Ask him to gather feedback from other agents, the ones who brought prospective buyers to your open house, on the concerns of potential buyers who have viewed your house. You might just learn about something which is wrong that can be fixed.
It is then for you to decide how much you want to reduce on your new asking price.
You could go anywhere from 5% to 10%. If you are stingy enough to reduce by just 1%, please save everyone’s time and forget about it.
If a listing is not getting any interest at all from buyers, then a 1% reduction in price would probably not be sufficcient enough to garner attention.
Get advice from your agent. This is the time where they make what they are worth.
A good agent should be able to advice you on the highest price that buyers are willing to pay. Just be wary that some agent will push down the asking price much lower so that a sale can happen faster, and the commissions check can be banked in faster.
After setting a new asking price
The first people to inform on your new price are those buyers that have already viewed your house.
They may have loved your property but felt that they could get better value on another property at the same price.
The next set of prospects to target are those that have viewed your property listing but did not call in to inquire.
You do this by changing your advertisement with headings like “New Discount” or “Reduced Price”. Then tell your agent to make sure every potential buyer who have inquired about your property knows about the new price.
There is something else to take note.
Once you have committed to a new reduced asking price, you have to go through with the sale when the price is met by a genuine willing buyer. It is part honor and part integrity.
This is why you have to be careful when taking advice from others on your amended price.
You are ultimately the one who is committed to it.
Failure to go through a sale when your price is met does not reflect nicely on you and your agent might ask you for compensation depending on your contract terms with him