Homes can be on the market for a few days, and the next day, you might see a price reduction. Many buyers assume there might be something wrong with the house, but that’s not necessarily the case. When a house on the market drops in price, the industry term “priced reduced” is used on the listing. Here’s what it really means when a home’s price is reduced.
MOTIVATED SELLERS
Seeing a price reduced on a listing could signal that the sellers are motivated to get rid of their home. If the seller has a job transfer or already purchased another home, there might be some hastiness to get rid of the home faster. It doesn’t necessarily mean that something is wrong with the house.
Oftentimes, a seller will price their home higher to get a little extra money. But if a buyer doesn’t bite at the higher price and the seller needs to get rid of the home, they’ll reduce the price. This is great news for buyers because it means the house will be a great deal.
TIME ON MARKET
In 2021, homes certainly flew off the market. It was a sellers market for most of the year, and the shortage of inventory made bidding wars a common ordeal for buyers. But this wasn't always the case. Sometimes, houses sit on the market for several weeks or months. When that happens, the sellers typically decrease the price just to make it more attractive to buyers and hopefully push the sale along. If a home sat on the market for a while, you might see a price reduction appear.
If a home had zero offers, it probably meant it was way overpriced. As a result, a seller might reduce the price so buyers aren’t scared away, and the home doesn’t accrue days on the market. As a buyer, be sure to check how long a listing has been on the market. If it's been on for a while, a price reduction likely doesn't mean anything sinister. The sellers are just tired of waiting for a sale.
POOR MARKETING
A home that isn’t selling could be the victim of poor marketing. MLS listings that have poor quality images or descriptions might affect how the house sells and result in a price reduction. A house that looks cluttered or has dark and gloomy pictures might make the house appear less desirable. The sellers could reduce the price simply to move the sale along, but that doesn’t mean there’s anything wrong with the house itself.
If a home catches your attention but is price reduced, be sure to talk to your agent and take a visit to see what the home has to offer for yourself. If a home isn’t selling because of its marketing, it still might hold lots of potential just waiting for your special touch!
HIGH COMPETITION
If multiple homes are for sale in a popular neighborhood, they have to compete with each other for buyer attention. Especially if it’s a buyers market, where there is more supply than demand, a home might have to reduce its price to attract more offers over other homes in the area.
Seeing price reductions in popular neighborhoods is a common occurrence. In most cases, it doesn’t mean there’s anything wrong with the property. The sellers are just trying to catch a little extra attention over the other homes in the area. If you see a price reduction in a neighborhood, check if other homes in the area are also for sale. If there are, it’s a good indicator that the reduction is simply the product of some “friendly” competition, nothing more.
FIND YOUR PRICE-REDUCED HOME TODAY
Just because you see a “price reduced” badge on a listing doesn’t always mean something is wrong. It could be a great opportunity to scoop up a property at a discount!
Now is the time to find your perfect priced reduced piece of paradise. With some minor investigation skills and a great real estate agent (call me!), a price-reduced home can be a big win and provide all the luxuries of island living at a great price.
Aloha, and welcome to Hawaii.