Relevant empirical findings
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A study found that homes sold within the first 30 days had only ~1 % off list price, whereas homes on market longer saw larger discounts: e.g., 4.75 % off for 30-60 days.
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Another dataset from Indiana REALTORS showed that homes priced 3-5 % under ultimate sale price typically went under contract in 2-9 days, versus homes priced near or above sale price taking much longer.
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A “discount group” analysis found properties sold at deeper discounts had a much higher likelihood of spending 90+ days on market: 45 % of the discount group vs 25 % of the rest.
These findings suggest that small discounts can accelerate sale, but larger discounts may be symptomatic of or correlated with longer DOM (because they signal problems or poor pricing).
Scenario Model: Listing at 2%, 4%, 6% Below FMV
Below is a hypothetical model showing expected DOM for comparable homes (same location, condition, marketing effort) when listed at different discount levels off FMV. These are estimates based on data-informed reasoning, not measured statistics.
| Discount Level | Listing Price vs FMV | Estimated Days on Market | Key Rationale |
|---|---|---|---|
| 2% below FMV | Slightly under market value | ~ 5-15 days | The home appears attractively priced but not distressed; buyers see value and act quickly. (Matches data for 2-9 days for 3-5 % under scenario) data.indianarealtors.com |
| 4% below FMV | Moderately under market value | ~ 10-30 days | Still good value, but larger discount may trigger extra scrutiny (buyers wonder why); slightly longer DOM but still strong. |
| 6% below FMV | Noticeably under market value | ~ 20-50 days (or more) | A larger discount may raise buyer/agent questions (condition, motivation, hidden issues); may slow showings and extend DOM. Also, sellers might end up engaging in negotiation drag, causing delay. Data shows deeper discounts correlate with longer DOM. Redfin+1 |
Why the differences emerge
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2% below FMV: Signals “correctly priced, motivated seller” but not desperation. Attracts strong immediate interest, multiple showings, faster offers.
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4% below FMV: Signals value, but some buyer caution may arise — “What’s wrong?” “Why the discount?” Some delay but not excessive.
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6% below FMV: Starts to trigger behavioral red flags: buyers may wait for further reductions, agents may down-prioritize, listing may linger as seller waits for “market catch up,” which may push DOM upward.
Implications for FSBO Sellers
If you’re selling by owner (FSBO) and can list 2%–4% under FMV, you’re in a “sweet spot” where you maximize lead interest and minimize perceived risk. But if you go 6% or more under, you must work extra hard on marketing, credibility, presentation to offset the cautionary signals that discount sends.