Durham: Review price to keep house competitive

Q: When should I consider a price adjustment when my home is on the market for sale?

A: In today's market, it is important to frequently monitor comparable homes that enter the market and watch for comparable home sales to make sure your home is priced competitively in the market. Overpriced homes for sale just sit on the market. Realtors and buyers forget about them. There was a time when a price reduction tainted a listed property for sale. That was several years ago when listings in our area sold more quickly. At that time, it was sometimes assumed that there was something wrong with the listing if it needed a price reduction. Now, price reductions are common.

Sometimes a seller is not content with listing the home for sale unless he or she tries a price that's higher than what the comparable sales data indicates. This is a reason for re-evaluating the price of the property after a few weeks on the market. In most instances, showing activity proves that the new listing that entered the market overpriced is getting overlooked by potential home buyers or the showing feedback indicates a need to look at the list price.

However, sometimes it is difficult to price the home right for the market in any neighborhood if few or no homes have sold recently. And in this case, you have to gauge the reaction of the market to get a sense of a correct listing price. It can be difficult to price homes correctly if the nearby housing inventory is varied in size, condition, age and style. Don't delay in re-evaluating your listing price if showing activity is not in line with other homes in the price range. Your Realtor can assist in monitoring this activity.

As difficult as it may be for a seller to consider a price reduction after only three or four weeks on the market, this is often the best strategy. Realtors and their buyers focus on the new listings entering the market. If your home enters the market overpriced, but it's otherwise a nice house in good condition, a price reduction early in the marketing stages is likely to attract the attention of Realtors and buyers who still have the listing fresh in their mind.

Although most areas of our market have appeared to have stabilized, there is no guarantee that prices won't slip. Buyers who realize that they can't time the market and who want to take advantage of low interest rates are diligently proceeding with their home search. Current buyers are savvy, selective, buying for the long term and won't pay over market value. With current home inventory for sale at much higher levels than homes being needed for current sales levels, it become paramount for a home seller to be positioned at a price that screams it's a good deal. With an abundance of competing listings for sale, a home must be in the market and not just on the market.

Constant review of the market is necessary as long as your home is for sale. Staying competitively priced is your competitive edge in most cases. Price reductions gives your listing a renewed marketing effort to generate enthusiasm about the property. More than 90 percent of today's home buyers use the Internet to search and assist in their home search. Most serious buyers have signed up for services to be notified when a new listing enters the market and when there is a price reduction.

In other words, when your home is posted in the MLS and other Internet home posting sites and the price is changed, an e-mail is sent notifying the buyer that the price of a home matching their home search criteria has changed. Generally, this will cause the buyer to take a look at a home listed that may have been previously overlooked or priced outside of their price range defined in their home search criteria.

You may have to lower the price more than once, particularly if you have waited weeks or months to make a price adjustment. If market values have moved down since your home was listed for sale, you could find yourself out of line with the market again. Don't rely on what your neighbors are asking for their homes. If they aren't selling, they are probably overpriced for the market. Place your attention on comparable properties that have sold after your home has entered the market. Making sure your home is priced right is the most important element to getting your home sold.

Get answers to questions you might have about real estate from Randy Durham, who is president of the Greater Chattanooga Association of Realtors and a broker with Keller Williams Realty. His column appears on Sundays. Send your questions to Business Editor John Vass Jr. at jvass@timesfreepress.com.

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