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Why Homesellers Should Think Twice About Reducing Prices

Redfin reports that homes get 3.4 times more online views the day they are listed than they do the day the seller drops the price.

“It’s critical to price your home to sell from the start,” said Redfin Chief Economist Daryl Fairweather. “Fair or not, buyers judge a home by how many days it has been on the market. A home that has been on the market for more than a few weeks has a scarlet letter on it, and buyers will wonder why no one else wanted to buy it. Dropping the price can help get your home onto the radar of some buyers who are searching for homes priced just below the original price, but you likely won’t be able to regain the appeal of a newly listed home.”

According Redfin, new home listings on its website received 100 views on the day they are listed. Daily views declined to 17 by day 30.

The amount of daily views saw a decline once the price was dropped. Daily views fell to 29 on the first day of a price reduction, and continued to decrease to 13 by day 30.

Redfin states that during a four-week period ending on May 19, 24.2% of homes for sale drop their price, which is up from 21% last year but down 30% from the record high last October.

“Especially in a market where bidding wars are not the norm, it can be tempting for a seller to price their home a little high to avoid leaving money on the table,” said Dorothee Graham, a Seattle-based Redfin listing agent. “If we have to drop the price, I’ll run a new comparative market analysis so the seller can see how much similar homes nearby are listing and selling for, then I offer to take them in person to tour those properties so they understand where their home should be priced.

“I also pull a list of everything available in that price range I’m recommending so they can see what else is out there, regardless of property type, size or condition, because this is how buyers are searching,” said Graham.

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.
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