Will Incentives Shorten Days on Market?
I blogged last week about how to properly xeriscape your Texas lawn. I have two listings that are on the market longer than average partially due to the fact that they do not have a lawn in back. Some home owners think xeriscaping means "adding lots of rocks" when proper xeriscaping actually encompasses hardy plants that do not need much water…but I digress.
The purpose of this post is discuss whether buyer or agent incentives can affect your home’s time on the market. For the aforementioned listings, sellers have reduced their prices and offered buyer allowances for decoration, landscaping, etc. but they still haven’t sold. We’ve now talked about the king of all incentives…the real estate agent commission bonus.
Now I know the agent bonus can be controversial, so hear me out!
FACTS OF THE CASE
- The sellers have had many showings, but no offers, which means they’re within at least 6-10% of the right asking price. Although they initially listed higher than my recommended 30-day sales price, they’ve both lowered at least once. Both homes are large for their areas, so they’re a little tougher to price.
- The showing feedback statistics gathered via HomeFeedback.com show that 50% of the buyers like the property, but just do not want to make an offer. They’re choosing other homes instead.
- There’s a great deal of competition in this area from new home builders who are offering incentives to both buyers and agents.
THE RESULT
The conclusion was to offer an agent incentive instead of lowering the price so shortly after the recent reduction. So far, we have noticed an increase in the number of showings but are attempting to track the true reason. In upcoming weeks, the seller can still think about the additional price reduction. At that time, they can also decide whether to keep the agent incentive as well.
Remember that the #1 way to get a home sold quickly is to price it at or slightly below market to invite the greatest number of offers in the shortest period of time. At times, it may be difficult to properly gauge the "right" price, so be responsive to your market conditions.
What do you think? Is the agent incentive a useful tool or does price really make the biggest difference?
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