The past 2-3 years have been an interesting ride in the Northern Colorado real estate market. As soon as interest rates went from the pandemic era 3%, to the 6%+ range, many buyers were sidelined while they either saved more, contemplated a more affordable market, or continued to rent until timing was better. After 2 or 3 years, conditions have largely remained unchanged - home prices have essentially been flat since 2022 and interest rates have hovered anywhere between 6.5% and 7.5%. But, right around springtime this year, we noticed that inventory began to rise, and fewer and fewer buyers came to the market. This has led to some of the highest inventory levels we've seen in over a decade, and a market in which sellers need to make hard decisions to incentivize buyers. Because of higher inventory levels and fewer buyers, sellers (and their agents) are now using price reductions to motivate buyers to bring offers. Price reductions, or how we frame them in the business: "price improvements", provide great opportunities to put your home back in front of interested buyers. Here's a breakdown of how they work:
THE CRAFT BROKER
NORTHERN COLORADO HOMES
Price Reductions Are Back
Jared Reimer - The Craft Broker
They Show Prospective Buyers You Are Motivated
Price reductions are a great way to prove to buyers that you are willing to concede some in a tougher market. If your home has been sitting for 100+ days and there has been no price reduction, some buyers might be hesitant to bring you a fair offer because of the perception that you are unwilling to negotiate or drop your price. With a thoughtful and well timed price reduction, it shows that you want to sell your home and are willing to do what it takes to find a fair value.
A Price Reduction Refreshes Your Listing in All Systems
The process of reducing your price is easy, but has a big impact! It takes two clicks to update your price, and when a reduction hits, it is syndicated out to all the popular portals and systems. When a buyer has a saved search and your home has a change, they receive an update of the price reduction. It is common to see a hefty bump in online views when a listing has price reductions. The real trick is having a large enough reduction to inspire showings and offers.
Price Reductions Allow You Another Opportunity to Tweak Marketing or Presentation
Because you are likely to get a fresh set of eyeballs on your listing when you reduce your price, it is a great opportunity to make tweaks to your marketing or presentation of the home. If showing feedback has suggested any items that you can make a change on, be sure to make those changes and point them out. Offering further concessions? Be explicit so when buyers get a second look, they can take that into consideration. Additionally, this is an opportunity to include/remove/change any pictures that might be more impressive. Change the "home base" picture on the listing to lure in a new buyer. Revise the listing description to appeal to a different buyer. There are endless amounts of tweaks you can make, and these changes won't make an impact if they aren't paired with a price reduction.
Things to Remember
Price reductions are not a silver bullet to get your listing sold, but price reductions never hurt! The adage "price solves everything" is very true when it comes to selling your home, because final sales price is what a buyer is willing to pay for your home, and not what you wish it would sell for. You do need to be tactful with your reductions as well. A simple $1000 reduction will refresh it in the system and provide the benefits of the items above, but, $1000 does not really move the needle if you are overpriced and buyers will likely write you off for a cheap price reduction. Get real with your pricing. The properties that move the quickest are well priced when they first hit the market - this is not a market to test how much you can get above fair market value.
I provide the expert guidance, resources and confidence to easily make a move in Northern Colorado. Every real estate transaction is unique and I work closely with you to develop a plan, strategy and approach to get the most out of your next sale or purchase. If you, a friend or a neighbor have a real estate need, please get in touch with me | Jared@TheCraftBroker.com or 970.222.1049
About the Author: Jared Reimer is a native Coloradoan and an Associate Broker at Elevations Real Estate in Old Town Fort Collins. He’s a community advocate, business champion, blogger, leader, tireless volunteer, innovator, thinker and expert on all things real estate in Fort Collins and surrounding Northern Colorado. You’re likely to find Jared spending quality time outside with his wife, Kacie, and kids, Hudson and Isla, or visiting with friends and clients throughout Fort Collins and Northern Colorado. Call or text Jared at 970.222.1049 or email him at Jared@TheCraftBroker.com