I came across this article from "MarketWatch." I agree with the writer's list of five signs that it is time to trim the asking price on your home.
1. Not Enough Showings. A home is likely overpriced if it doesn't get any showings in the first couple of weeks it's on the market. Even more proof a price cut is need: people are interested enough to take information from brochure boxes in front of the home and there have been a substantial number of hits on its Web site listings but buyers still aren't scheduling showings.
2. Some Showings, but no contract. Perhaps the number of showings isn't a problem, yet there still have been no offers. "If you're getting showings but not getting a contract, that means you're still not quite low enough," says Susan Jacobs, realtor from Manassas, Virginia. Consider this guideline from Becky Flores, a real estate agent in San Antonio. "10 showings and no offer or two weeks with no showings, you are probably overpriced for the current market. This is true especially in this very competitive market," she said.
3. Similar homes are now selling for less. "In markets where the median price is falling, it's important to regularly monitor what homes are selling for," says Mike Golden from Chicago. "Historical data isn't quite so powerful anymore. You have to look at what is selling now, and what it is selling for."
4. Repeated negative feedback. "If buyers who do walk through the home have the same negative reactions to it, that could be another red flag the the price needs to be dropped," Jacobs said. Buyer feedback, collected from a real estate agent, may reveal that other houses in the same price range have updated kitchens or bathrooms and the home in question hasn't kept up the the times. To address the disparity, sellers can either remodel or cut the price. "You can sell anything anywhere. If the price is right it will sell," Jacobs said.
5. You've cut the price, but not by enough. If a price cut is in order, don't cut by small increments. Several smaller decreases could make a seller look desperate, but a larger decrease will generate more interest, Flores said. "A $2,000 price reduction is nothing in the grand scheme of things. Even on a $100,000 house, I'd lower by $5,000 at least, if it isn't moving," she said.
Again, a big mistake is pricing the home too high from the start, real estate agents said. Not only could overpricing lengthen the time on the market, but it could also cause the home to sell at a greater discount in the end, agents said. That's because prospective buyers often get the impression that there's something wrong with stale listings or, worse, buyers assume the seller is desperate and willing to accept a much lower price.
"Your first three weeks are critical-you'll have the most showings with the msot potential, qualified buyers, those that are out there waiting for something that matches their needs to come on the market," Flores said. "Don't blow it by overpricing."