Why Won’t My Property Listing Sell?
The current inventory of homes throughout the Sacramento – San Juaquin Valley is at the lowest level in nearly a decade while the number of reported sales each week continues at a pace of a normal market. Buyers are often competing against each other for the few homes within their price range, causing a spike in home prices as demand exceeds the supply. So, why won’t your listing sell?
It is without a doubt a sellers’ market, but that does not necessarily mean that every home on the market sells quickly. In fact, you may be one of the unfortunate sellers that has been on the market for 30 or 60 days with no offer in hand. As a real estate broker, I often sit in counsel with both clients and other real estate agents lamenting over long listing periods and lack of offers. Recently, a home seller was relating his displeasure with the lack of an offer on his home even though it had over 100 showings in the 8 months the home had been listed. After reviewing the listing material, it was clear the listing agent had done his job and done it well. The photographs of the home were outstanding, the description was inviting, and the home was mass marketed on all the major websites. The problem, however, was obvious; the house was overpriced by $10,000. When I explained this to the seller, he shared that his agent has been begging him to lower the price, but the seller wanted to hold firm to his listed price. In spite of the advice from both the listing agent and myself to lower the price, the seller searched for other reasons to blame the lack of a sale on the agent. Less than two weeks later, the seller called me to share the good news. He accepted an offer on his home! The seller excitedly explained that he fired his old agent, hired a new agent, and after only 5 days on the market, he had an offer in hand.
Why the sudden movement on this house? I was quite shocked to see that the new agent literally used the same photos and posted an inferior description of the home. So, what did this new super-agent do differently? He lowered the price by $10,000.
This story is not unique. In fact, this identical scenario has been brought to my attention several times this week alone. As difficult as it can be to hear for home sellers, the number one reason why their home is not selling is price. While it may be easy to blame the listing agent, a home that has been even remotely marketed properly will sell very fast in this market. Conversely, any home that is overpriced, no matter how great the marketing, will sit on the market. The reason for this is relatively simple. Buyers quickly become an expert in their price range. Buyers, especially in a seller’s market, often look at dozens of homes and may have even been outbid on several properties. These buyers know the market and are rarely ever willing to overpay for a home. Savvy buyers will often identify an overpriced home and take a “wait and see” approach, waiting out the seller and watching for price reduction.
While some may argue better marketing or agent “networking” is to blame for a lack of offers, I could easily cite dozens, if not hundreds of examples of poorly marketed homes that sold in less than a week simply because the price was correct. Remember, in a seller’s market, buyers are scouring the internet daily in search of a home.
Obviously, as a seller you want to maximize the return on your investment, which means setting a listing price as high as possible. As a real estate agent, I share your goal of selling the house for the highest possible amount. There are certain tasks that must happen to get top dollar. These tasks include making sure the house is show ready. The home should be decluttered, clean, and pleasant smelling. Unruly pets, and dirty litter boxes are one of the biggest turn-offs for buyers. Newly listed homes get special attention, so it is critical to hit the market on day one with professional quality photographs of the house. Follow up is important. A good real estate agent will follow up with potential buyers after every showing because you want their feedback. Sometimes minor items can be easily fixed to achieve a sale. Be cautious about listing high to leave room for negotiating. Some sellers think a good strategy is to list higher than what they want to sell for. This leads to an overpriced listing that will sit on the market, eventually leading buyers to embrace the “wait and see” mentality instead of acting now.
My advice is to hire a real estate agent that has a proven track record of sales and high customer reviews on trusted sites like Zillow or RatedAgent.com. Stay away from any agent that promises to sell your house for more than any other agent – we call this “buying the listing” in the business. Keep in mind that marketing the house is probably the easiest job your real estate agent will have, a good agent will spend a great deal of time and energy counseling you on the strengths and weaknesses of the offer, negotiating repairs and credits, and helping you complete disclosures. If you did your homework upfront and picked a trustworthy agent, listen to their advice. This is what you hired them for.