Price your home right from the start to maximize the homebuyer interest it will get on day one
Homes get 3.4 times more online views the day they are listed than they do the day the seller drops the price. So if you’re thinking about testing the waters with a high price and then lowering it a few weeks later to drive more interest, we advise against it.
“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.”
A home for sale that is viewed by 100 buyers online in its first day receives an average of just 17 views per day after 30 days on the market. Dropping the price only boosts that to 29 views, and the bump only lasts a single day. The day after a price drop, the home’s views fall back down to just 18 per day.
It is critical to put your absolute best foot forward the moment your home hits the market. Price it right, include the best quality photos, and make sure all the details are just right. You’ll never be able to replicate the surge of attention your listing gets on its first day on the market.
Online views of home listings drop off steeply after the first day, with half as many visits on day two and a quarter as many after a week on the market.
During the 4-week period ending May 19, nearly a quarter (24.2%) of homes for sale had a price drop, up from 21 percent a year earlier, but down from the 30 percent record high posted last October. 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.
“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,” explained Seattle-based Redfin listing agent Dorothee Graham. “If we have to drop the price, I’ll run a new comparative market analysis (CMA) 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,” continued Graham. “We also keep in mind price intervals and how homebuyers tend to search on Redfin and other real estate sites. A seller might want to reduce their price by just $10,000 to $15,000, but we advise that this won’t work unless it puts them in a different price bracket on real estate sites. When you do a price drop it has to be meaningful.”
For this analysis we collected Redfin.com page view 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. We averaged the number of views listings got each day on the market, relative to their listing date and the date of their first price drop. The data was indexed to 100 views on day 1 of the listing in order to clearly show the volume of listing views relative to day 1 of a new listing.
Source: Redfin: Written by Tim Ellis on May 24, 2019: https://www.redfin.com/blog/listing-views-new-vs-price-drop/