6 Signs You Need to Lower Your Asking Price on a Flip
When selling a fix-and-flip property, pricing it right can make or break your success. While it’s tempting to aim high for maximum profit, an overpriced listing can backfire, leading to a lack of interest, longer time on the market, and reduced returns. Understanding when and how to adjust your asking price is key to keeping your flip profitable. In this article, we’ll break down why pricing matters, how long your listing should sit, and six clear signs it’s time to lower your asking price.
Contents of This Article:
- Why Pricing Your Flip Correctly Matters
- How Long Should a Property Sit on the Market?
- 6 Signs You Need to Lower Your Asking Price
- How to Decide on the Right Price Reduction
- Start Your Fix-and-Flip With a Reliable Lender
Why Pricing Your Flip Correctly Matters
Maryland Hard Money Lenders know that pricing a fix-and-flip property accurately from the start is crucial to your success as an investor. After all, overpricing can cause your listing to sit on the market, leading to increased holding costs and reduced buyer interest.
With that, the longer a property stays unsold, the more buyers assume something is wrong, forcing you to lower your asking price by more later.
On the other hand, pricing it competitively from the beginning can spark multiple offers, create urgency, and maximize your profits. It also helps your property appraise at the sale price, reducing financing issues for buyers. Overall, smart pricing is just as important as quality renovations when it comes to flipping success.
How Long Should a Property Sit on the Market?
For fix-and-flip properties, the time on the market directly affects your bottom line. Ideally, your property should attract serious interest within the first two weeks. However, the average time a home sits on the market is generally between 30 and 90 days. That said, if it sits for more than 30 days without any offers, it may be a sign that the price is too high or something about the listing isn’t resonating with buyers.
The longer a property sits, the more likely buyers are going to assume that there’s an issue. Unfortunately, this may lead to fewer showings, lower offers, and extended holding costs. So, to avoid missing out on profits, you’ll want to price your flip competitively from the start and be prepared to adjust quickly if the market isn’t responding as you expected.
6 Signs You Need to Lower Your Asking Price
Not sure if your flip is priced too high? There will likely be signs you need to lower your asking price. Here are a few things to look for when deciding whether or not to make a reduction.
- It’s Been on the Market for Over 30 Days
- Similar Homes Are Selling Quicker
- Your Listing Is Getting Views, but No Offers
- You’re Receiving Low-Ball Offers
- You’ve Already Dropped the Price, But It’s Not Enough
- You’re Getting Negative Feedback from Showings
It’s Been on the Market for Over 30 Days
When buyers search for a property, it can be a red flag if a listing has been on the market for more than 30 days. In a healthy market, real estate should receive strong interest from other buyers within the first two weeks. This doesn’t mean you should be discouraged right away, as sometimes it takes longer, depending on the real estate market. However, if your fix-and-flip property is sitting without offers, it may mean that it’s overpriced or not appealing enough to stand out.
Similar Homes Are Selling Quicker
As a seller, you should do as much research as the buyer to know the market in your area. If comparable homes are closing quicker, it could be a sign your asking price is not aligned with your real estate sector. Buyers tend to compare listings side by side, and if your property doesn’t offer similar value for the price, they’ll likely move on.
Your Listing Is Getting Views, but No Offers
Online views and in-person showing without any follow-up offers can be a strong indicator that something is off, and it’s usually the price. If buyers are interested enough to take a look at the property but not enough to make a move, they may see better value somewhere else.
You’re Receiving Low-Ball Offers
While low offers can happen in any sale, consistently receiving offers far below your asking price is usually a sign that the market sees your home as overpriced. This could also be buyers’ way of telling you that they’re interested, just not at the current price point. So, if you’re consistently receiving low offers, it may be time to adjust your asking price.
You’ve Already Dropped the Price, But It’s Not Enough
If you’ve made a small price reduction and still aren’t getting any traction, it might not have been enough.
You might have to reduce the price even more to change buyer perception. Buyers often watch how long a home has been listed and how much the price has changed, so a small cut may not be convincing enough. A larger adjustment can help bring more attention to your listing.
You’re Getting Negative Feedback from Showings
You’ll want to pay attention to the feedback you get from buyer agents and potential buyers, especially if they’re commenting on the price. Repeated comments like “it’s nice but too expensive” are valuable pieces of feedback that may indicate a price adjustment is necessary to stay competitive.
How to Decide on the Right Price Reduction
If you’ve determined that your flip is overpriced, it’s essential to know the next steps in lowering the price. That said, you don’t want to just guess how much to lower it; it’s crucial to have a strategic approach. For instance, start by reviewing recently sold comparable properties to see how your listing compares in terms of price, condition, and location.
A common rule of thumb is to reduce your asking price by at least 3% to 5% to make a noticeable impact. Smaller reductions often go unnoticed by buyers and are unlikely to spark any new interest in the property. With that, it’s crucial to consult with your real estate agent or listing expert. They can provide insights into buyer behavior and help you choose a price that sparks demand without cutting too deep into your profits.
Start Your Fix-and-Flip With a Reliable Lender
Knowing when to lower your asking price is crucial. That said, pricing is a major part of a successful flip, but so is having the right financing in place. Most investors use hard money loans to fund their fix-and-flips, as they’re approved quickly and funded within just a matter of days.
If you’re looking for a hard money loan for a property near Baltimore, look no further than Maryland Hard Money Lenders. Our team of experienced real estate loan professionals can help you get funded fast. Learn more about our lending process or start our initial loan application today.
