Q: It is now April and we have not had a showing in almost a month. Any suggestions how to get more showings? I thought of offering to pay closing costs, lowering the price or offering a flooring allowance. –Frustrated seller
A: All of the above. But in a different order of priority. And that’s not all!
One thing that virtually never changes about real estate is this: When a listing won’t sell and isn’t even getting any showings, a price reduction is the single tweak a seller can make that wields the most potential to get buyers interested and get the home closer to being sold. Is it that buyers are greedy? Not necessarily — several things make this so.
First: the realities of how buyers search for homes. Well, over 90 percent of buyers look for homes, first, on the Web. As such, they are forced to enter some basic search parameters, which normally include a range of bedrooms, a range of bathrooms, a price range, and an area (city/state or ZIP code). If your home’s list price does not fall within a given buyer’s price parameters, that buyer will never see your home’s listing.
Second: the realities of house hunting. The buyers who aren’t coming to see your home are going to look at listings of other homes in your neighborhood, and they’re going to see the other homes in town with similar prices and features. And then they’ll compare them all. If yours is smaller, less upgraded or not as attractive as other homes at the same price, or is priced higher than really similar homes, buyers will take a pass.
Third: Other than their own space and location needs, buyers have very few reasons to feel urgency to buy on today’s market. The buyers that are out there are primarily buying now to take advantage of affordability — i.e., they want a great deal. So, overpriced homes are an A-class turnoff.
In fact, buyers who may see your overpriced home online, and like it, will actually wait to allow the market to educate you into reducing the price, rather than taking on the unpleasant and often impossible task of convincing a seller of their home’s true market value.
While being educated by the market, to a seller, sounds terrible, it’s worse for your home to be lagging and you not taking the lesson away.
Clearly, my top-line advice is to lower your price, below a $25,000, $50,000 or $100,000 cutoff, so that your home falls within buyers’ search parameters.
And my No. 2 recommendation is something you didn’t mention: offer a time-sensitive bonus and/or commission increase to the buyer’s broker or agent. The vast majority of the qualified buyers out there are working with buyer’s agents. Incent these agents to show your home by offering an extra half or full percentage point of commission, or a bonus to the buyer’s agent who brings an offer that closes escrow by a given date.
Ask your own agent about how the agent can publicize this offer to other agents mostly likely to represent your home’s target market.
Buyer incentives, like closing-cost credits, can also help distinguish your home from the competition, but they are not likely to dramatically increase showings of a home no one is currently coming to see, unless you’re going from zero credit offered to a full 6 percent, which might not be necessary.
If you can reduce the price and offer a bonus or commission increase to the buyer’s broker or agent, you will reposition your home, and a buyer’s incentive offering won’t hurt your case, either.
Instead of offering a flooring credit, though, I’d rather see you consider replacing the flooring that is in bad shape. I’m not big on sellers doing much costly repair work these days, but floors are a massive surface in a home — replacing them can create an entirely different experience for those who do come see your home, and it can be done cost-effectively (ask your real estate broker or agent for suggestions of flooring installers and which floor materials to use).
Marketing your price-reduced homes as having new floors vs. having a flooring allowance (which implies that it has old, dirty or otherwise undesirable floors) might be the better boost to viewings.
The more viewings you get, the more likely you are to get your home sold.