(NEW YORK, NY) – As many properties go ‘on sale’ once listed, few are lowering prices enough to attract buyers. Although sellers are willing to make small price cuts, these are not enough and often too late to generate a significant new buyer interest. Thus, NYC homes are lingering longer on the market and fewer homes are finding buyers.
Although many sellers are tempted to list their properties aggressively at first, by relying on price cuts to draw interest if the buyers fail to come through only weakens the listing. Even at negotiation, few sellers are willing to make the concessions needed to make the deal.
With many new homes coming to the market on a regular basis, modest price cuts are not enticing enough to draw new interest, nor deep enough to lead the few willing to make a deal.
Data shows that holiday weekends are the most popular times for sellers to cut prices on their listings. Though we all love a deal, looking at the spread of discounts that hit just after this year’s Memorial Day weekend shows the challenges of this tactic. On Tuesday, May 28, 2019 nearly 200 sellers cut prices on their homes. According to StreetEasy, 62% of those listings received additional interest. Therefore, it seems that price cuts only marginally reinforce post-holiday weekend bumps that would happen anyway.
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But let’s cut to the chase. Price cuts signal a willingness to negotiate. This is an opportunity for buyers to make a deal due to the compliance with the seller. And with these price cuts buyers are saving quite a bit. The median total discount from first listing price to closing price was 10.5%, according to StreetEasy.
Ultimately, this is just another reminder that buyers hold the power. Those tempted by price cuts should feel empowered to negotiate, particularly on homes that have already has a price cut.