"Nurse! I Need a Price Reduction, Stat!!"

How Big a Price Reduction?

If an otherwise well-staged, well-marketed home isn't selling after a reasonable interval on the market, a price reduction is invariably indicated.

How big?

It all depends on how overpriced the home appears to be.

Toss Out the CMA

Once a home is actually on the market, interest from prospective Buyers -- or lack thereof, if there are few or no showings -- trumps pre-market research.

So, even if the listing agent's Comparative Market Analysis ("CMA") suggests that a given home is a good value, if there are dozens of showings and no offers (or even second showings!) . . . cold, hard empirical reality would strongly suggest otherwise.

How much to cut is very much a subjective call, and based on experience. Practically, it also depends on the Seller, who may not be willing to reduce the price at all.

However, in my experience, just like every deal negotiation has its own rhythm and feel, so does every listing.

How Strong a "Pulse?"

At one end of the continuum are listings that just feel primed to sell.

Interest is strong and immediate, first showings quickly progress to second showings, and second showings progress to . . . offers.

At the other extreme are homes that, for lack of a better term, lack any perceptible pulse (that's never happened to me personally, mind you, but so I hear from other Realtors).

Showings are few and far between, and follow-up interest is zip.

In between are listings that are attracting good attention, but just can't seem to elicit an offer.

Cold Splash of Water -- or Defibrillator Paddles?

For a truly lifeless listing, a dramatic price concession ("paddles") is usually in order.

Depending on the aforementioned factors, that can be anywhere from 5% to 15% or more.

For a listing that just seems to need a reviving nudge, a less extreme price reduction is obviously appropriate -- call it a "cold splash of water" (it certainly feels that way to the Seller!)

That can be as little as 2%, or, if the Seller wants to "bite the bullet" and significantly raise their chances of selling quickly, as much as 5%.

"New Rules": Sales Ads

Holiday "Sales" That Aren't

Comedian and talk show host Bill Maher has a segment called "New Rules" where he rails at hypocrisy and stupidity -- especially when practiced by large organizations. Maher's "New Rules" substitutes his own, more sensible standard.

In that spirit, I've got a "New Rule" for stores that advertise sales, holiday or otherwise:

New Rule -- stores can't advertise that an item that's normally $25 is "on sale" because it's marked down to $24.89 (or a grocery store item that's normally $3.89 is "on sale" for $3.79). If you want to scream "sale" to Holiday-weary shoppers, the "sale item" must be marked down at least 5%.

In fact, Edina Realty has long had an internal policy designed to cut down on the number of agent "blast" e-mail's heralding price reductions on their listings.

To be forwarded to agents company-wide, the price cut must be at least 5%.

P.S.: Don't know if this is an "urban myth," but I just heard a plausible explanation for why air fares seem to magically increase the closer you come to booking your tickets (while on an airline site recently, I had a quoted airfare increase in between the time (30 seconds?) when I selected the flight, and input my credit card for payment!)

The explanation?

Software on your computer, called, "cookies," lets the airlines track you, so they can guess -- or literally know -- when you're about to buy. Call it high tech "bait-and-switch" (advertise one fare, substitute another when you're ready to pull the trigger). Assuming, of course, that it's true.