Keep Cutting Till Offers Come

We always say that every home has a range of possible values. 

Only a buyer can tell you what it's really worth. 

Part of listing a property for sale is deciding on a pricing strategy, once a general value range is considered or established.

Do you want to list at the upper end, risking extra time on market?

Do you want to list at the lower end – or, gasp, lower than the low end? 

If you're going to start high, you ought to have a plan to bring the price down until buyer activity picks up. 

A rare case of the mark-it-down-till-they-come strategy is rather publicly under way at 1505 11th (5br/4ba, 3219 sqft.) in East Manhattan. (1505 11th is listed by Aaron Klapper, eXp Realty of California, Inc.)

The 1981 original home features plenty of modern upgrades, and a traditional floorplan that should work easily for most.

The listing began in mid-July at $3.695M, but has now made 6 cuts totaling nearly $500K.

Here's a look at the cuts, one at a time:

The cuts are mostly spaced about 2 weeks apart, with a little pause before this week's $96K reduction.

Several cuts are almost 3%, and the listing is now down 13% from its starting point. 

Family-sized homes in MB are always in demand, although as we look at some recent stats for East Manhattan, it doesn't seem like there's been a lot of recent trading of homes that might be comparable in some way to 1505 11th. 

1304 Harkness (4br/4ba, 3620 sqft.) closed for $3.479M shortly before 11th St. listed, in late June – after just 12 days on the MLS.

A pretty remodel near Pennekamp at 1310 Gates (5br/4ba, 3178 sqft.) needed just 10 days to get near to its asking price, closing for $3.390M in late July.

Fixer 1440 8th (3br/3ba, 2701 sqft., with a 7500 sqft. lot) sold pretty speedily (26 DAM) and got $3.046M (-$304K) several days later.

And just 2 weeks ago, a bold early-80s house at 1467 18th (4br/4ba, 3774 sqft.) made a deal in its 5th month. The list price at the time was $3.350M, but they actually reduced the price by $200K while in escrow, to $3.150M. (You don't see that often.)

Harkness, Gates and 8th were all under contract before 1505 11th listed. So really, only 18th has gone under contract since 11th started looking for buyers.

Besides those closings, the other sales or new escrows on SFRs don't really line up as competitors or comps for 11th. 

Today on the market, 1505 11th is underpricing its two most direct competitors:

1760 9th (4br/3ba, 3406 sqft.), now at $3.425M after 7 weeks, and

1635 19th (6br/4ba, 3428 sqft.), now a $3.449M after 2 months.

So, 11th St. should be getting all the looks, and offers... whenever they're at the right point.

Maybe this is the week. 

If not, will they mark it down again to get some action? 

It should be noted that the risk in making frequent markdowns is that it might create an expectation from buyers that they can wait it out longer – more cuts will just keep coming. 

That can be a foolish strategy for a buyer, however, because you'll miss out when others take action. 

As a seller, what would you do if 6 markdowns haven't done the job?