# When to consider a price reduction



## FarmerKat (Jul 3, 2014)

We have listed our house FSBO about a month ago. The average time from listing to sale in our area is just under 4 months - that is from MLS so I am guessing FSBO would be longer (smaller market, fewer buyers without realtors) but I don't have a statistic to back that up. Yet Zillow is already recommending to drop the price. I am somewhat surprised by the recommendation.

I get a couple of calls each day (sometimes more) and we have shown the house. No offers yet but I just don't think that after 30 days it's time to throw in the towel. 

Any comments?


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## Declan (Jan 18, 2015)

FarmerKat said:


> We have listed our house FSBO about a month ago. The average time from listing to sale in our area is just under 4 months - that is from MLS so I am guessing FSBO would be longer (smaller market, fewer buyers without realtors) but I don't have a statistic to back that up. Yet Zillow is already recommending to drop the price. I am somewhat surprised by the recommendation.
> 
> I get a couple of calls each day (sometimes more) and we have shown the house. No offers yet but I just don't think that after 30 days it's time to throw in the towel.
> 
> Any comments?


When I see them lowering the price on properties regularly I think 1) there is something wrong with it they are hiding and or 2) why bother looking at it until they reach their rock bottom price. 

I would say wait at least 3 months or keep the price the same but say that you will pay closing costs or something.


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## FarmerKat (Jul 3, 2014)

Declan said:


> When I see them lowering the price on properties regularly I think 1) there is something wrong with it they are hiding and or 2) why bother looking at it until they reach their rock bottom price.
> 
> I would say wait at least 3 months or keep the price the same but say that you will pay closing costs or something.


I wonder if they use it to send updates to people who saved the property. Not sure about other sites, but Zillow will send an e-mail to everyone who saved the property when the price changes. 

Either way, thanks for confirming what I was thinking. We figured we need to give it at least 3 months before we re-evaluate. Our first step at that point would be to list on MLS and offer a commission to the buyer's agent to widen the exposure as opposed to lowering the price.


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## Laura Zone 5 (Jan 13, 2010)

When you priced your home, did you do comparisons?
Meaning, look at homes similar in size, age, property size in a 5-10 mile radius and see what they have sold for in the last year.

It is a sellers market.....

I am looking at a house that has a crazy price history......

DateEventPrice$/sqftSource
06/13/16Price change$149,900-6.3%$49RYAN Realty
05/07/16Back on market$159,900$53RYAN Realty
05/06/16Pending sale$159,900$53RYAN Realty
04/25/16Price change$159,900-3.1%$53RYAN Realty
04/13/16Price change$165,000-8.3%$54RYAN Realty
04/11/16Pending sale$180,000$59RYAN Realty
04/11/16Price change$180,000+9.8%$59RYAN Realty
04/06/16Pending sale$164,000$54RYAN Realty
04/06/16Price change$164,000+2.5%$54RYAN Realty
03/31/16Pending sale$160,000$53RYAN Realty
03/28/16Price change$160,000-8.6%$53RYAN Realty
02/29/16Listed for sale$175,000-30.0%$58RYAN Realty
09/26/15Listing removed$250,000$82ERA Real Estat...
08/04/15Listed for sale$250,000$82ERA Real Estat...

First listed almost a year ago at 250K now, 149,900.......
Maybe the agent talked them into listing it for a ton?
Looks like it went pending @ 164,000 but didn't sell?
Why?
Now it's 15K less than the pending offer?
They just did a 10K price cut on June 13.

I listed my home at 285,000 cause that is what the comps said that's what homes like mine in a 5-10 mile radius sold for.
It sold for 255,000 (after I put a new roof on it)

It's a sellers market. Make sure you are advertising like a boss.
I have no idea how to find FSBO homes in my area......


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## FarmerKat (Jul 3, 2014)

Laura Zone 5 said:


> When you priced your home, did you do comparisons?
> Meaning, look at homes similar in size, age, property size in a 5-10 mile radius and see what they have sold for in the last year.
> 
> It is a sellers market.....
> ...


Laura, that example you posted is crazy! I am surprised it is listed with a realtor - surely a realtor would know how to price a house. 

I believe our house is priced properly. I looked through prior sales and also what else is on the market. It is hard to do "comps" as houses are so varied around us (you can have a property worth $20K with an old singlewide on it and a $500K house on 80 acres right next to it). So you really have to look at each property in detail. 

To look in your area, check craigslist and Zillow. Since Zillow is free to list on, many FSBOs are there. You just click on "Listing Type". Interestingly in my area (just searching using the town name), there are 79 listings by realtors and 9 FSBOs. You can check Fizber, infotube.net and 10realty.com for FSBO listings too.


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## Declan (Jan 18, 2015)

My house was price lowered every month. it was a bank REO property so I waited til the 4th month to make an offer. They then decided to auction it and I got it for several thousand below my first offer they declined. Makes no sense to me, but hey, I ain't complaining about their decision making process on this one LOL.

The thing is if I look at a piece of property and am interested in it, I already know what I am willing to pay. If I make an offer it will be about that. What is asked for it doesn't matter to me. I will still make my offer and if they say no, they say no.


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## FarmerKat (Jul 3, 2014)

Declan said:


> The thing is if I look at a piece of property and am interested in it, I already know what I am willing to pay. If I make an offer it will be about that. What is asked for it doesn't matter to me. I will still make my offer and if they say no, they say no.


Would the asking price not matter in the determination whether to look & make an offer? Say, someone is asking $500,000 but you only want to spend $20,000. Would you even bother looking at the property and offering $20K?


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## po boy (Jul 12, 2010)

Laura Zone 5 said:


> I listed my home at 285,000 cause that is what the comps said that's what homes like mine in a 5-10 mile radius sold for.
> It sold for 255,000 (after I put a new roof on it)
> 
> It's a sellers market. Make sure you are advertising like a boss.
> *I have no idea how to find FSBO homes in my area*......


Do a search like this..


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## Tobster (Feb 24, 2009)

If you have the property priced correctly, I would not lower the price after 30 days. Remember there are new buyers entering the market all the time. It is true most activity will result when a property is first listed. But, new eyes are out there and will find you.

I did a FSBO about a year ago, a modest house in town in a decent neighborhood, listing price was $110,000. I had a couple of buyers who backed out and one could not secure financing. It took almost 4 months to sell it. Instead of lowering the price, I offered to pay closing cost up to $3000, this was attractive to those who were interested in that price house. By the time I accepted the buyers' counter offer and paid the closing cost, it amounted to about a $5000 discount. It is much easier to go that route if you have equity in the house.

EDIT: Also, in my area for $300 I was able to get the property in the MLS listings. I spent another $100 to have a lock box so realtors could show the property. If the buyer had been one from the MLS with a realtor I would have paid 2.5% to that realtor, keep that in mind when accepting a counter offer.


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## Maura (Jun 6, 2004)

Zillow is not the last word in housing value. Look at what houses similar to yours are selling in your own area.

Make sure the house has road appeal: from the road does it look pretty and well kept?

Check your marketing strategy. Do you have a sign near the road so people can pop out of their car and take a flyer? Do you have a sign with a little plastic container for sheets that describe the house? Is your house online?

We had our house FSBO for a month and just as I picked up the phone to call a realtor, someone stopped at the house. Cash sale in a slow market.

One month is not long. While realtors want your house on the market in May when people start looking, more sales happen later in the summer. We are coming into the heavy buying period. People are tired of looking, they may have already sold their current home, etc. I would wait until August 1 before going through a realtor.


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## Declan (Jan 18, 2015)

FarmerKat said:


> Would the asking price not matter in the determination whether to look & make an offer? Say, someone is asking $500,000 but you only want to spend $20,000. Would you even bother looking at the property and offering $20K?


If I thought $20K was a fair price, then yes, but that absurd example is really a non-starter that adds nothing to the conversation. It is not about what I want to spend but that I want what I do spend to be representative of the value of the property. If someone wanted to offer a crack town property for $500K and it was only worth $20K, I would keep my $20K in my pocket because I have no interest in cracktown unless I had inside information that made me think I could realistically flip it to a development and get much more.


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## FarmerKat (Jul 3, 2014)

Declan said:


> If I thought $20K was a fair price, then yes, but that absurd example is really a non-starter that adds nothing to the conversation. It is not about what I want to spend but that I want what I do spend to be representative of the value of the property. If someone wanted to offer a crack town property for $500K and it was only worth $20K, I would keep my $20K in my pocket because I have no interest in cracktown unless I had inside information that made me think I could realistically flip it to a development and get much more.


First .... I think my reply to you yesterday came out a bit snarky. I am sorry about that ... I was having a weird day and my wording did not come out polite. Please accept my apology.

Yes, it was an absurd example. But I was just making a point that asking price matters - it should put the house on the radar of potential buyers. If the price is way out of my range, I am not even going to pull it up. If the price is way lower than what it appears to be worth, I am going to suspect some major issues and not look either.


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## Declan (Jan 18, 2015)

FarmerKat said:


> First .... I think my reply to you yesterday came out a bit snarky. I am sorry about that ... I was having a weird day and my wording did not come out polite. Please accept my apology.
> 
> Yes, it was an absurd example. But I was just making a point that asking price matters - it should put the house on the radar of potential buyers. If the price is way out of my range, I am not even going to pull it up. If the price is way lower than what it appears to be worth, I am going to suspect some major issues and not look either.


It matters to some people. It just depends on your market, your experience, and your method. I don't waste mine or other people's time looking at houses and making lowball offers. I already know before I look at it what the assessed value is, how much the current owner paid for the house and when, and how much I am willing to pay. I already know what other houses in that area have recently sold for and what their values are. The local online tax assessor information (GIS) provides a wealth of information to look at before you go in.

Now I do have some personal rules of thumb, for instance:

1) I won't look at HUD properties because the local realtor who lists those has a reputation for being the one to gut the house of its appliances and pipes and such; and even when they don't, people in my area who had HUD-financed homes for any period of time tend not to take care of them and just default when it comes time for a major repair.

2) If the listing says "Serious offers Only" I won't even bother researching the value of the home. It means they want too much for it and are inflexible.

3) If the listing says "Possible Owner financing" I scratch it off the list because it means the house needs a ton of work and the seller knows the buyer won't be able to get a standard mortgage for it.

4) I won't look at houses that have large tree near the house because those are expensive to take down and the roots are probably invading the sewage lines and foundation.

5) While it is racist I suppose, I avoid looking at houses in which I think the current owners are black and have owned it in a 10-15 year time frame for the same reason I avoid HUD houses--more times than not in my experience they have deferred maintenance until the house needs major repairs like a new roof/new heat/AC, plumbing issues, etc.


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## mnn2501 (Apr 2, 2008)

FarmerKat said:


> I am surprised it is listed with a realtor - surely a realtor would know how to price a house.


The Real Estate Agent has to do what the customer says or lose the listing. Many RE agents will take the listing even knowing it'll never sell for that amount hoping the owners will come to their senses after a couple of months and price it correctly.


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## FarmerKat (Jul 3, 2014)

Declan said:


> 2) If the listing says "Serious offers Only" I won't even bother researching the value of the home. It means they want too much for it and are inflexible.


That is an interesting perspective. When I read that, I read it as "if you are just thinking you may want to buy a house and have not even considered how you are going to pay for it, please don't call."

To me a serious offer is one backed up by cash or a pre-approval letter (and a deposit once the price is agreed on). I have been honestly surprised how many people have called about our house that have not even given one thought to financing. Or don't have a slightest idea how to go about getting financing. (Just yesterday someone called "I am really interested in your house. How do I get financing?") I screen them out. I do not want to spend time showing the house to someone who has not at least done some financial homework. I have a number for a local mortgage broker that I refer them to. I also find it surprising how many people are not able to get a mortgage just because they are not able to come up with a small down payment. I know that coming up with 20-25% is very hard, but if you cannot come up with at least 3%, you probably should not be looking at that price range.


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## Declan (Jan 18, 2015)

FarmerKat said:


> That is an interesting perspective. When I read that, I read it as "if you are just thinking you may want to buy a house and have not even considered how you are going to pay for it, please don't call."


I see it more often on listings in which the house appears to be over-priced for the size and area in which it is located, usually on houses that will periodically show up in listings and disappear after only few months. Again, may be different in your area, but it is not a phrase I see used often, and when it is, it is usually an omen that the owner is a pain to even try to work with.

Some higher end properties will be "by appointment only to pre-qualified buyers" to weed out the people you are speaking of.


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## Teej (Jan 14, 2012)

A friend of mine listed hers through a realtor. He suggested lowering the price by $5000.00 after 30 days with no offers. She agreed because she thought he over priced it to begin with. She now has an offer and pending closing date (knock on wood that all goes well).


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