For many agents, demand and tight supply have made it a seller’s market in most regions, particularly among lower priced homes. However, price is still key as some markets begin to overheat.
According to a CNBC report, low number of listings has made the market more competitive, pushing prices higher at a fast clip.
Nationally, prices are up about 7 percent from a year ago, and in the hottest markets they are up double digits. Still, a house can be overpriced, and today’s savvy house hunters can smell an overpriced house a mile away. That is where an agent can determine whether a price drop is wise for their clients.
As agents, we know that a listing on the market too long can get stale and potential buyers may see the time on market and bypass the listing. Laura Barnett, a real estate agent with RE/MAX DFW Associates in the Dallas area, said agents mightwant to suggest sellers lower the asking price before a listing hits the sale stage.
“I typically drop the price after the second week on the market. But I may be more aggressive than most. Usually just in $5,000 to $10,000 reductions for the most part.”
The average time on the market for all homes nationally was 34 days in September, according to the National Association of Realtors. That is down from 39 days in September 2016. But markets like Seattle and Denver are still seeing homes sell in just a few weeks.
Of course, most agents might believe they just need to price their homes correctly in the first to avoid this problem. Dana Rice, a real estate agent with Compass in the Washington, D.C., area, said there are several schools of thought on when to be competitive and when to test the market.
“I don’t believe in ‘testing the market,’ but … if we enter the market that might be pushing the top of the range, we can easily gauge response within seven to 10 days. It’s almost a certainty that if we don’t get an offer within that first 10-day period, then we’ve missed the mark.”
If the home doesn’t sell in two weeks, Rice said, she then considers a price cut.
As an agent, you can reach out to agents who have had potential buyers tour the home and let them know a price drop may be in the offing. The buyer may make an offer that is slightly above your client’s intended cut.