Deciding to reduce your asking price is never an easy one. But if your home has been languishing on the market for some time, it’s one you should consider. At present, the NYC real estate market is going through a buyer’s market. That means you can’t afford to overprice and the coming months are expected to see more price drops as sellers try to stand out from the competition. Here’s what to know when considering reducing your asking price.
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What’s the market like?
The funny thing about reducing the asking price on a home is that the market can bring it right back up again. Think of it this way. Let’s say that you were to put something up for sale on eBay that was valued at $300, but you only asked for $100. This could garner enough interest that you trigger a bidding war. If someone wants it bad enough, you might even walk away with $350.
If you know that the inventory is limited in your area of the city and there’s a lot of demand then reducing your listing price could be just what you need to bring the buyers in. Look at other similar properties in the neighborhood. Are they selling or lingering as well? Have they made any price reductions and, if so, did it help them sell? Another perk of having a seller’s agent is that they can provide you with all this information and the expertise to read it correctly.
How motivated are you to sell?
With the current buyer’s market in NYC, some sellers are questioning whether they should hold off on selling for now. The market is hard to predict but what it comes down to is how motivated you are to sell. If you’re motivated, then you’ll have to price your home according to the market, which could mean a price cut. In a buyer’s market, it may not matter how exceptional your home is. There may just be too many properties out there to attract enough buyers to your price tag.
If you’re not very motivated, then that’s fine. There’s nothing wrong with waiting for a better market to sell. Just know that you could be waiting a year or more. You’ll also want to take down your listing because the longer it stays on the market, the greater the difference between the list and sale price will be.
How low can you go?
If you are going to reduce your price then how low can you go? Ideally, you just want to make it more competitive and only reduce it once. Multiple price reductions only make your apartment look undesirable and can lead to tough negotiations when you do find a buyer.
A price drop of 5% is a good start, but 10% will garner more interest. Your agent will be able to provide sound advice on finding that sweet spot. That sweet spot is usually located somewhere in the bottom five prices of listings for similar properties in your neighborhood. If you can make it look like a deal, you’re sure to attract the buyers you’re looking for.
It’s a massive misconception in real estate that a high listing price leads to a high sales price. Overpricing your property could be a death sentence and drive to it languishing on the market for months. A price drop is just another part of the sales strategy, and when you’re setting your initial asking price, you need to consider that you may have to drop it at some point.