Selling Real Estate: When Should You Cut Your Losses?
Selling your house is a lot harder than many people realize. You could have a piece of property that is perfect in your eyes and you could even have a valuation that is backed by a professional. You may think that finding a buyer under such circumstances will be easy enough; however, this isn't always the case.
A property can stay on the market for a long time with no one either interested or no one willing to match the price. When this happens, the seller may have to make the painful decision to take a hit on their asking price. When should you consider cutting your losses?
When the Property Has Been on the Market for Too Long
It's bad news for you as a seller when your property has been on the market for too long. In the eyes of potential buyers, this may mean that there's something wrong with the house or the deal, and some may not even bother to visit.
A property that stays too long on the market may become harder to sell with time, and cutting your losses early might be your best option.
Maintenance Costs Are Too High
Keeping a house on the market when you don't live in it can be a very expensive affair. There are certain things that can fall into disrepair, and you may also have to worry about security since empty houses make excellent targets for thieves, vandals, and other unscrupulous individuals.
Maintaining such a house to ensure it is ready for every potential customer that visits can be very expensive and time-consuming. If you hold out for too long, you may still incur a loss even if you find someone willing to pay the asking price.
The Competition is Tough
Competing in certain neighborhoods can be very tough. There are times when a lot of houses end up on the market at the same time. If some of these houses are foreclosures, their asking prices may be much lower than yours. It's hard to get a competitive price for real estate in such markets.
Opportunity Cost
If you're waiting on this sale to be able to invest in something else, waiting for too long can cause you to lose other opportunities. The returns from the investment that's waiting might make up for the losses you'll incur from this sale. In such cases, don't wait until the other opportunities slip through your fingers.