may be a good idea to lower the price early and get out of the falling market as soon as possible, taking a quick, cheap sale before the average prices drop further than you are willing to go. Smart sellers lower their prices during a falling trend and complete their deals quickly before too much damage is done. Prices of properties in newer subdivisions might fall lower than they are worth, so selling for less than you might like is still a better option than selling for an actual loss. If several neighbors’ properties in the region owe more than what they are worth and are on the verge of foreclosures in the near future, that scenario might affect your property value, too. This is because most homes like this are resold at bargain rates. Under this scenario, you must also think of lowering the price on your home to preempt and compensate for the drop in area values that is likely to follow in the wake of foreclosures. Do not be misled by the statistics that project only a modest decline in the sale prices. Many sellers might announce some attractive incentives and credits in order to sell their properties. Therefore, when the statistics are showing only modest price drops, sellers end up netting more than what they would otherwise lose due to the drop. In cases where higher end homes are selling better than starter homes, the median sales prices could give false readings. Under such circumstances, the drops in median sales prices reported will understate the degree of the downturn. Know that in some areas, it is possible for the median sales price to rise even when the home prices are falling. When your home price has dropped by about 15% and the price of your replacement house has dropped equally, the market is in your favor if you are selling the property in order to trade up. You might even consider lowering the price if your mortgage payments are actually bleeding and you are seeing considerable losses month after month while the sale is delayed. Be cautious and skeptical with the advice of unethical real estate agents who offer to buy your listing on the claim that you have quoted lower than what you could have. It is not uncommon for less scrupulous agents to claim you’ve set your price too low, then later ask you to lower the price once you have paid them for the listing.
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