» "Price reduced" or "New Price" Real Estate Signs, Which is Better ?

"Price reduced" or "New Price" Real Estate Signs, Which is Better ?

The front page of last week’s Puget Sound Business Journal had an article written by Barbara Clements about the abundance of new signs decorating homes for sale. According to the article, of the 7000 homes on the market in the Tacoma area, 1000 are reduced and displaying a sign that states: “Price Reduced”.

Dick Beeson, an owner/broker at Windermere Real Estate voiced his opinion:

“Beeson’s plea for the area’s real estate agents to ditch the signs, first issued on a Tacoma real estate blog three weeks ago, has ignited debate over the topic that touches raw nerves among professionals trying to earn a livelihood selling houses in a showing market.”

“If agents were to stop posting those “reduced” signs, Beeson said, buyers would feel more positive about making an investment, and it would change the dynamic of the market.”

Another agent, Kari Scott, with John L. Scott, believes in signs which read “New Price”. In her view, buyers see the change in price posted on a sign and it draws interest.

Matthew Gardner of the Gardner Johnson real estate advisory firm weighed in with a third opinion and stated: “Many buyers have been online already and have an abundant amount of information. That might make the yard signs useless.”

My vote goes with Matthew Gardner. I believe so much information is available on the internet in today’s world, it’s redundant to put the reduced or new price up on a home.

What do you think? Are “price reduced” or “new price” signs a motivating or de-motivating force in the real estate marketplace? Do these signs help or hurt buyers and sellers? Do the signs make you want to buy or run for the hills?

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http://www.TheHairFarmer.com Hair Farmer Joe

I don’t believe that the yard sign is useless – far from it Debra. That said, consumers are increasingly smart and know what they are looking at. Saying “New Price” vs “Price Reduced” doesn’t fool anyone – although it does sound a little more positive. The fact is that there will be thousands of more local properties in the next year whose seller or agent will also need to make this decision.

For Realtors to be asked to refrain from using these signs – I hope they do what they feel is right. I know when I have a property listed that I will do many different things to make it stand out from the crowd.
http://www.debrasinick.com Debra Sinick

Hi Joe,

You are right. Yard signs are still important because so many buyers drive around their favorite neighborhoods to see what is for sale. I still wonder if signs about price, price reduced or new price, motivate buyers to buy.

There was an interesting post on Sellius about how people perceive value. Dan Ariely has written a book called “Predictably Irrational” Sometimes people will pay more for something because of its perceived value
.
http://blog.sellsiusrealestate.com/marketing-tips/the-next-book-i-must-read-predictably-irrational/2008/02/06/

Michael Shermer, whom I wrote about previously and who also spoke at Inman News, wrote abhttp://eastsiderealestatebuzz.com/2008/01/24/why-people-are-afraid-to-buy-real-estate-in-a-buyers-market/out “Why people have weird ideas about money.”

Your response got me to thinking about how their ideas play into the sign issue. Hmm, I may have to write another post about all of this!
http://www.motioncloud.net pureum kim

Hmm…good question. I think “New Price” is better. “Reduced Price” may have some negative stigma. Not putting anything would not catch potential buyer’s experience. It would be an interesting study to conduct, see how many homes are sold at what price depending on the type of sign.
http://www.debrasinick.com Debra Sinick

I agree. I think new price is better. I think this works better for pricing on all kinds of things.

Hmm, maybe we should talk to some psychologists to see if they are interested in a study!

If you check out the article I wrote above about why people are afraid to buy real estate in a buyer’s market, I quoted from research Michael Schermer had done regarding buyer psychology.

It is that old “fear of loss” thing. People are afraid to buy if they think they are going to lose more. They are willing to buy in a seller’s market as prices go up because they think they will lose more if they don’t jump in.

Price reduced sounds like losing, rather than winning with a “new” price to me.