When Are Price Reductions Necessary?

Price reductions are never ideal. However, we have a good strategy to share for how to approach them.

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No seller likes to have to make price reductions, but sometimes they are necessary. How do you determine when your seller needs a price reduction?

Today, there are fewer than 5,000 homes on the market in San Diego and in any typical month we sell between 3,000 and 4,000 homes. If your home has been on the market for weeks or months without accepting an offer, it’s time for a price reduction. Homes priced correctly are selling very quickly in today’s market, within days and weeks.

The best time to set the stage for this is during the listing consultation with the seller. This way, they can clearly understand the dynamics of today’s market. If we are on the market for more than two weeks and have had fewer than 10 showings and no offers in that time frame, we need to start entertaining the idea of a price reduction.

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The best time to set the stage for this is during the listing consultation.

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The key to getting the highest price when reducing your price will be to cut fast and cut hard so you get the property under contract quickly. 

The longer a home sits on the market, the lower the seller’s net is. Sometimes getting the highest possible price for a property requires being brutally honest. If a home has been on the market and is not receiving offers, we call our sellers and let them know the situation.

 If the market has spoken and the price is too high, we have two options for a reduction. One is a big 10% price reduction to sell quickly or a 5% reduction to test the waters further.

At this point, it’s not even an opinion that the home is overpriced, it’s a fact. If you have any questions for us about price reductions or anything else, give us a call or send us an email. We look forward to hearing from you soon.