Market Insights: Price drops stimulate sales
Special to the Daily
photo had a $400,000 price drop this week. Yes, nearly a half million dollars. Got your attention? Let me take a wild stab in the dark; the answer is yes.
The original price was $3,399,000 which was a very fair price that generated several showings and plenty of buyer interest. Today, the price is $2,999,000. Over the past few months a total of six different buyers have expressed strong interest in this house. Due to the price drop, they are now really interested.
Price drops of over 10 percent, like this one, stimulate sales and that, I can assure you, is a good thing for both buyers and sellers. All of us in the real estate industry would be pleased to see the number of transactions increase. Here are the three main reasons large price drops (over 10 percent) make an impact.
Buyers take note of large price drops. Whether the price drop is $400,000 down to $3,000,000 or $40,000 down to $300,000, both are big and just as important. The only difference is that one has an extra zero.
Buyers, be involved. Make sure you are getting automatic emails every time a property you might like comes on the market or when a price is dropped. Contact me if you want to learn about how this service works. The automatic emails are important because we often see properties sell quickly after a large price drop.
Large price drops often mean the property is now priced a little bit below the current market value. And that makes buyers jump. I have seen it happen many times. The buyer saw the property three months ago and loved it, but just could not justify the price. Then they get an email with the price drop. Now they fear if they wait too long somebody else will snap it up. So they write a contract. Pretty straight forward logic.
Full-time Realtors, the ones to work with, are on the ball. They track the market watching and waiting for changes that will impact their clients. And when they see a large price drop which makes a property attractive, they get moving quickly to sell the property. This is one of the amazing benefits of the Summit Association of Realtors’ multiple listing service, sellers have several hundred Realtors working to get their property sold. And in the current market what are the eagle-eye, top-notch Realtors looking for? Great value.
Buyers: Work as a team with your Realtor and stay on top of price changes. Sellers that make large price drops are often telling you they want to sell quickly, which means you might buy at a very, very good price.
Sellers: Small price drops overall rarely generate additional buyer interest. You are better to wait and make one large drop rather than a half dozen little ones.
Daniel Webster Johnson has earned the national Quality Service Certified Platinum award, recognition of 100 percent client satisfaction. He is a broker associate at Resort Brokers Real Estate in Breckenridge. Call him at (970) 393-3300. To receive his concise weekly ‘pulse of the market,’ email drop him a line Daniel@YourMountainBroker.com.
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