This is why dropping your list price can earn you a scarlet letter

Deciding the right price point and time to sell a home can have a significant impact on how well it does on the market.

After all, the online real estate brokerage Redfin claims that home sellers who list their homes online receive up to 3.4 times more online views the day they’re listed versus the day a price reduction occurs.

Redfin Chief Economist Daryl Fairweather said it’s critical for home sellers to price their home correctly from the start to prevent disinterest from potential buyers.

“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,” Fairweather said. “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.”

In fact, Redfin’s data indicates that a for-sale home viewed by 100 buyers online in its first day receives an average of just 17 views per day after 30 days on the market. However, dropping the price only boosts that rate to 29, and the bump only lasts a single day.

Yeah, that’s right. A single day. According to the company’s data, the home’s views fall right back down to just 18 per day immediately after a price drop.

“During the 4-week period ending May 19, 24.2% of homes for sale had a price drop, up from 21% a year earlier, but down from the 30% record high posted last October,” Redfin writes. “As home sellers this spring adjust to a market that’s less favorable to them than it has been in years, it’s increasingly important to make your home as appealing as possible to the most serious buyers whose phones will alert them when your home is first listed. Alerts about a price drop are more likely to inspire skepticism than excitement in homebuyers.”

This image highlights traffic views of homes that received a price drop:

Redfin: Listing Views

NOTE: In order to gather data for this analysis, Redfin calculated pageview counts of 1.2 million listings of homes for sale across the U.S. between January 2018 and March 2019 that had at least one price drop during the period.

Published at Wed, 29 May 2019 21:13:00 +0000