How Long Should You Wait To Reduce Your Home’s Price?

Keeping an eye on your competitors’ sales and your area’s inventory can be more important than measuring your days on market (DOM) to the local average.

NAR’s 2023 data shows buyers nationwide looked at an average of seven homes, four of which are viewed online, before settling on a purchase. So, if your area has a large inventory, the DOM may be higher than if fewer homes are available.

“You should be concerned if you’ve got a lot of competitors and everyone else has been on the market for less time than you,” Ruiz says.

So, really, whether your house has been sitting on the market too long boils down to offers and engagement compared to similar properties.

Many times, the obstacle is overpricing and/or sub-optimal marketing. The good news is that savvy sellers may quickly see their sales potential soar once they correct these problems.

How long should I wait before reducing my house price?

Although there are regional fluctuations based on the local market, data shows a seller’s greatest chance of receiving their listing price — or above — is during the first two weeks the home is on the market.

In the fading wake of the pandemic-era housebuying frenzy, experienced agents like Kauffman and Ruiz are now tempering seller expectations for high asking prices by providing data on changing interest rates and a smaller buyer pool. “Most people want to start [up] here, and I know exactly what’s happening with this ball rolling downhill, and we’re going to wind up here,” Kauffman says.

If you suspect you’ve overpriced your home, a swift price correction is better than waiting additional weeks. Statistically, the longer your house sits on the market, the lower the price you’ll fetch.

What’s the best day of the week to reduce my home price?

Because many buyers schedule weekend trips to Las Vegas specifically to view homes, Ruiz prefers to post new properties and make price reductions on Thursdays.

“I want to make sure my listings are refreshed to go live on Thursdays,” he explains, “ to get max traffic going into the weekend.”

Are price reductions more common as the market shifts?

Interest rates, inventory, and buyer demand frequently fluctuate and influence the market, including the selling price and the sales pace.

“Every market is different,” says Ruiz. For example, as interest rates spiked a few years ago, he recalls the Las Vegas market experienced a downturn in the seller’s market with massive price reductions, fewer transactions, and higher inventory.

In 2023 as inventory decreased and transactions increased, “The supply-and-demand curve is moving in favor of the seller,” he reports. “We’re not seeing any reductions in our market at all unless something’s been sitting on the market for a really long time — which means it’s grossly overpriced.”

The changes in prices vary depending on the market conditions of a location. Bright MLS’ 2024 National Housing Market Outlook report outlines certain metro areas that will see price declines this year, with construction activities ramping up and more homes being added to the supply. These include Miami; San Diego, California; and Nashville, Tennessee.

On the flip side, some property hotspots will see an increase in real estate prices as inventory remains low and incomes soar. These locations are Buffalo, New York; Chicago; and Cleveland.

How many times should I drop my home’s price?

No seller ever wants to reduce their home’s price. That’s why professionals place so much importance on making sure your home is priced correctly in its premiere listing.

However, if an adjustment is imminent, our experts suggest that making a single, well-timed, meaningful reduction is better than making a series of smaller cuts over time. Since a reduction can be the catalyst for multiple offers, you may even consider it to be another component of your sales strategy.

“If you’re on the market for 90 days and there’s a decent amount of inventory,” Ruiz says, “you’re probably going to drop the price at least one time.”

“A home can only sell for so much,” Kauffman agrees. “They can only go so high on appraisals, and honestly, you’re only going to bring in so much cash over value anyway.”

When sellers agree a price reduction is necessary, Stephanie Termine, a top real estate agent in Cleveland, often recommends an 8% to 10% decrease. “If we’re not getting any traffic on showings those first few days, then we probably missed the mark by that much,” she says.

Ryan Lundquist, a certified residential appraiser in the Sacramento area, says there’s nothing wrong with a 5% reduction; however, dropping your price by 1% may not be worthwhile. It’s ‌not enough to attract buyers searching in a different price range but could grab the attention of buyers and their agents who have been tracking the market, looking for room to negotiate.

“It’s really tough when you miss the mark on price in the beginning because buyers are very savvy, and they get alerts that your price has dropped,” Termine explains. That’s when buyers ask sellers to include home warranties and closing costs.

If your home stays on the market for the full length of a traditional, six-month Realtor’s contract, Ruiz says you might expect to drop the price two or three times.

How can I get help to price my home right?

Our experts say comps — or recently sold nearby homes with similar characteristics to yours — should be the North Star of your pricing strategy. “If you’re seeing similar properties getting into contract in your neighborhood and you’re not generating any activity, you want to start asking yourself what the problem is,” Lundquist says.

Here are a few tools to help check the comps and whether your price is in line:

Get an online home value estimate

To find out what your home might be worth, you can get a quick online estimate from an automated valuation model (AVM) tool such as HomeLight’s Home Value Estimator. Based on your answers to a few questions about your property, our tool combines your home’s last sale price with recent sales records for other properties in the same neighborhood.

Once you enter your address and fill out a short questionnaire, the platform provides a preliminary home valuation in less than two minutes. That quick estimate provides a starting point for determining your home’s value in today’s market.

Consult with a top local real estate agent

Because they are constantly engaged in local markets, top real estate agents are invaluable resources for determining price, marketing a home, and managing all aspects of a sale.

Experienced Realtors® complete a comparative market analysis (CMA), which compares the price of recently sold properties in your area with similar square footage, overall condition, and the number of bedrooms and baths.

They factor in special features such as a renovated gourmet kitchen or a lake view. They also consider a mountain of other market trends, including price per square foot for similar homes in your area and the total supply of unsold homes.

HomeLight offers many resources to help you learn about everything that goes into a comparative market analysis and how it can help you adjust your asking price if needed.

Get an appraisal

Mortgage rates dropped to around 6.6% in August, reaching their lowest since May 2023. As purchasing power grows stronger, sellers must adjust their pricing strategy. Otherwise, you risk having the property sit on the market for a long time or having fewer prospects.

A HomeLight survey found that 67% of top real estate agents say ineffective pricing strategies in the listing hinder property transactions. In addition, 64% claim that not heeding agents’ guidance can break a potential sale.

“The best thing sellers can do is listen to their agents and listen to the market,” adds Lundquist. If the seller and their agent differ by 15% on price point, paying for a pre-listing appraisal can mediate the discussion.

“An appraisal can be a valuable tool, providing tons of additional insight,” Lundquist says. The third-party evaluation can both determine value and predict how much a buyer’s lender will underwrite.

How can you tell if my home price might be off?

It’s a good idea to periodically revisit your agent’s marketing plan to consider whether your home is being promoted properly online and if you’ve accurately assessed your home’s condition. If you’ve accounted for these factors, the problem is probably price.

“A lot of sellers are not super realistic about what they can get for their homes today,” Termine says. “When I sit down with a seller, and my comps and my data don’t match what they think they can get, we have to have a very honest conversation.”

Kauffman agrees. “The more honest you are when I’m sitting here in front of you, the more I will know how to take care of you,” he says. “That realistic perspective is key.”

That conversation will explore finding solutions to these common issues:

Your listing has exceeded the ‘days on market’ average for your area

Days on market refers to the time between when a house is listed to when it goes under contract with a buyer. Federal data shows the property listings remained on the market for a median of 43 days in May 2023, up from 30 days in May 2022 but significantly down from 74 days in January.

Solution: Days on market metrics vary by area. Check with your agent about how fast other nearby homes are selling compared to yours.

Your home value has been impacted by a change in the market

Mortgage experts predict that rates will continue to drop through the rest of 2024, especially as the Federal Reserve cuts interest rates in September.

Even with lower loan costs,  a large percentage of buyers’ monthly payments will be devoted to interest, so they are likely to scrutinize the value and features of your home versus similar properties.

On a local level, factors such as the opening or closing of a major employer or a blue ribbon school in your neighborhood also impact prices in your area.

Solution: If the comps you used to price your home are three to six months old, you may need to revisit your decision using more recent or even pending sales data. Your listing agent can also reach out to the other agents as their comparable homes enter escrow to find out the sales price before the information is available publicly.

You’ve had showings but no offers

You’ve dropped everything to clean up your home and accommodate a showing request more times than you can count. But each tour ends up being fruitless, leaving you wondering what could be wrong. “If we don’t have an offer within 48 to 72 hours — and we’re getting a ton of traffic and showings — then we’ve probably missed the mark on price,” says Termine.

Solution: Rule out other potential culprits, such as a defect like a weird smell or a damaged kitchen counter that could be surprising buyers when they visit the home. As a next step, you might bring in a friend to view your house with an objective lens and provide feedback or tour neighboring listings for a fresh perspective. Doing so may provide clarity as to whether your price is accurate.

What else could be wrong with my home price?

Here are a few other pricing traps where real estate experts advise caution:

You’re looking for a unicorn buyer

In some hot local markets, buyers may be willing to pay any price and agree to any terms to get the property they want. But, “you don’t want to price for those unicorns; you want to price for the market,” says Lundquist.

Ruiz advises his clients that pricing for a unicorn buyer is likely to backfire. “Too many people point to the outlier in the evaluation report — the one person who sold for a record price — and sellers get attached to that number,” Ruiz explains.

He says that pricing strategy typically results in less foot traffic and even fewer offers in line with your expectations. Furthermore, as we’ve noted above, the longer your house sits on the market, the less likely buyers will be motivated to offer the asking price. “So by overly pricing your house — especially in a market that’s not hot — you’re setting yourself up for disaster,” Ruiz says.

You’re straddling price brackets

For decades, shoppers have affirmed the power of 99 as a pricing strategy in retail. Staying under a threshold even by one unit — paying $9.99 instead of $10 — makes consumers feel like they’re getting a deal.

However, that tactic rarely works well in real estate. Most real estate search engines use preset parameters of round numbers that range from $100,000 to $1.8 million.

Last year, the first step 41% of buyers took to find their new home was searching for properties online. Understanding the price brackets and pricing your home correctly allows your listing to pop up in the searches of the greatest number of potential buyers.

“If you price your home at $299,999, you are missing the folks who are searching in that $300,000 and up range,” Termine says. Her experience also shows that buyers explore homes within $25,000 increments. For example, they may consider homes within the $300,000 to $325,000 range.

You’re confusing sentimental value with market value

Since you’re selling a home where you’ve invested significant money and created many cherished memories with loved ones, you may make the mistake of carrying that sentimental value into your asking price. However, note that buyers don’t have the same kind of affinity towards your home. They may not even value the upgrades you loved about your property.

While selling a home is an emotional journey, you must bear in mind that it’s a financial transaction at its core. This is where agents become especially beneficial. Since they don’t have an emotional attachment to the property, they can make an objective assessment of how much your home is worth. 

Still convinced your home is priced correctly?

Before lowering your asking price, make sure your marketing and home presentation are hitting the mark. If you follow your agent’s advice, your home will probably be in a prime position when it hits the market.

To further enhance your chances of a sale, be certain:

1. Your home is accessible to buyers and their agents

Since a home is usually a family’s largest investment, most buyers want to get a feel for the property firsthand. They may even walk through multiple times before they make an offer.

If you have limited hours for showings or open houses, or you listed the property before it was ready to show, then lack of access could be the problem. “Access is a big deal,” says Ruiz.

Even in the seller’s market, properties with limited access due to tenants, owner health issues, pets, etc., are likely to have less foot traffic, more days on the market, and fewer offers.

“If you’re in a buyer’s market and there’s no or little access, plan for your home to sit on the market a long time,” cautions Ruiz.

2. Your home looks move-in ready

When buyers visit a home with overgrown landscaping, bizarre paint colors, or outdated features, “all they see is additional money they have to spend,” Termine says.

To get the best price and appeal to the greatest number of buyers, you should:

• Paint with neutral colors
• Replace dated and dirty carpets
• Deep clean and declutter
• Spruce up your landscaping

You might even consider making upgrades that impress buyers.

“Sellers are upgrading the kitchen, bathrooms, flooring, and paint. They understand many of today’s buyers are looking for homes that don’t need work,” reports top Chicago agent Courtney Monaco in HomeLight’s Top Agent Insights.

According to agent survey responses, the most popular upgrades that increase ROI include:

• Open concept kitchen with family room
• Kitchen island
• Energy-efficient and/or smart appliances
• Ample drawer and cabinet storage space and
• A walk-in pantry

3. Your listing includes professional photos

Many real estate agents work with professional stagers and photographers to ensure each room looks inviting when promoted online. Our experts have also compiled a list of DIY design and staging tips to help your home look its best for buyers.

“Effective marketing starts with great consumer-facing experience with an online presence featuring professional photos,” says Ruiz.

4. Your listing highlights neighborhood charm and walkability data

Your listing should be a love letter to your home — telling buyers about everything that makes it special. Be sure your description includes not only the best features of your property but also nearby schools, parks, theaters, restaurants, and other attractions locals love.

5. Your listing mentions your home’s trending features

A little research into what’s trending in real estate can pay big dividends. Search home and design blogs for the hottest amenities and highlight those assets in your home.

For example, Lundquist says the pandemic prompted a rise in the popularity of larger homes and properties with patios, pools, and other outdoor living areas. Given the new normal of remote work, a staged home office is also a plus.

Be sure to mention these bathroom upgrades, which a recent HomeLight survey identified as being important to buyers:

• Double-sink vanity
• Modern lighting
• Rain or dual-head showers
• Vanity with extra storage and
• Soaker tubs

6. Your marketing plan targets the right buyers — particularly if you have an unconventional property

“Even the greatest marketing materials won’t reap results unless they reach the right audience — whether that’s by digital, phone, mail, or other channels,” says Ruiz.

Homes with quirky features, unique layouts, or unusual locations aren’t for everyone.

For example, a split-level home might take longer to sell than a ranch-style layout in a neighborhood attractive to older buyers. But the right buyers — maybe a multi-generational family — will be thrilled to find the perfect place.

If an unusual property is priced right but not selling fast, Lundquist advises sellers to have a little patience and listen to the market. “Your unique property might just need more exposure time,” he says.

In addition, HomeLight experts have several ideas about how to make your home and your listing more attractive to buyers.

If your price is perfect, your home looks stunning, and your marketing reaches its targeted audience, showings should increase, and hopefully, offers will follow.

7. Your pricing strategy anticipates where the market is headed

“Whether it’s an inclining, declining, or steady market,” says Ruiz, “ you want to have a constant awareness of not only where the market is, but where the market is headed.”

He cautions sellers to keep in mind that when looking at sales data and comparables that closed in the last 30 to 90 days, you’re actually seeing a snapshot of properties that went under contract 45 to 180 days ago. It may not reflect today’s market.

To price effectively, “You want to consider competitors’ pricing, foot traffic, consumer confidence, transactions in the last seven to 30 days, and what’s expected to happen in the market in the next six to 12 weeks,” Ruiz says.

Are there other home-selling options?

Even if the reduced pricing doesn’t yield the ideal buyer, sellers still have other options.

Because the market is in constant motion, you can avoid many pricing and other pitfalls by partnering with a professional. HomeLight can connect you with a trusted top agent in your area in about two minutes.

If you’re determined to market the property yourself, another alternative is to remove the property from the market for a while. After a little reflection, a few improvements, and maybe even a market shift, you can list the property later with a plan that makes your home more attractive to the target audience.

Another consideration is selling the property “as is” through HomeLight’s Simple Sale platform, which provides all-cash offers for homes in almost any condition nationwide. If you’re frustrated by the traditional listing process and don’t have the time or energy to monitor the market or work with an agent, Simple Sale allows you to skip repairs, staging, and showing and offers the opportunity to close in as little as 10 days.

Even if your home hasn’t sold in record time for a record price, you always have additional opportunities to devise a strategy that results in a sale. Since monitoring your local market can take a lot of resources, time, and effort, partnering with a professional may be your best option.

Fortunately, no matter where you live, HomeLight has all the information you need to get real-time estimates on your home’s value, tips on marketing, and even connect you to a top agent in your area in less than two minutes.

With HomeLight’s resources and a pricing strategy from a top agent, a successful sale is on the horizon.

Writer Nicole Wisniewski contributed to this story.
Header Image Source: (Roger Starnes Sr / Unsplash)