If my commercial property hasn’t sold or leased, when should I consider reducing the price?
Every owner expects their property to sell or lease quickly, especially in a fast-moving real estate market. But what should you do if the offers don’t start coming in as quickly as you expected — or at all?
If you’re thinking about reducing a price, consider this: the longer a property is on the market, the lower your chances are of selling or leasing it for the list price.
If a property is overpriced, it gets stale. Potential buyers will see the time it’s been on the market and scroll past your listing without even looking at it. That is why it may be best to lower your price before your listing gets to the stale stage.
So when is that?
According to experts, this happens usually somewhere between two weeks and three months.
It can also be a good idea to reach out to prospects who may have toured the property first and let them know that there will be a price cut. The potential buyer might make an offer that is a little above your intended cut.
Price Reduction Strategies
If you are thinking about a price cut, first research the neighborhood to see how long it takes most properties to sell. Then look at properties that sold after a price cut.
Also, calculate the average price cut over the previous three to six months to get an idea of how much you may have to lower your price.
Reduce the Price Only Once
Nobody likes to lower a price, so sellers often tend to make multiple small adjustments. Avoid this strategy, since it can take multiple smaller reductions before buyers even take notice, so you’ll only end up losing time and prolonging the process. Instead, make one cut that’s big enough to awake interest in your property.
Consider Seasonal Factors
The most popular time to sell a property is during summer or spring. On the other hand, fall and winter can be the right times to sell because there are fewer properties listed and less competition.
Property Cycle Factors
Property values tend to change in cycles — from upturn/boom to downturn/stagnation. The trick is to sell the property while prices are increasing and before the market peak is reached.
Whatever the reason may be, it’s vital to get your timing right, and this is where looking for advice from a local real estate agent can be helpful. You may be able to sell your property at the original price simply by waiting until market conditions become favorable.