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Why a home doesn't sell

Nov. 7, 2012
Categorized in: For Sellers

6 most common reasons a home doesn't sell

 

* Your home is over priced

* Your home doesn't show well

* You're in a bad area

* You have an unrealistic listing agent

* You're battling competition or market conditions

* You have ineffective marketing

 


1) Your home is over-priced
Home sellers who are optimistic love the old adage, "There's a buyer for every home."


The fact is that buyers (not sellers) ultimately determine the value of a home in any market. You can set your listing price well above any comparable properties in your neighborhood, but at some point it will be up to you as the seller to accept what buyers thinks your home is worth.

Overpricing is one of the most common reasons a home doesn't sell. When you ask an unrealistic price, it often works against you. Here's why:

Most real estate agents, and hence most qualified buyers, will see your new listing within 30 days. If it is overpriced by as little as 5%, it will be duly noted and interest in your property will wane, especially if you show no intention of coming off your asking price. You likely already priced out buyers who might have qualified for financing at a more reasonable price. Even if you manage to find a buyer at your inflated asking price, the property may not appraise at that figure and the financing will fall apart.

Your real estate agent may have approved or even suggested the inflated asking price to secure your listing. Conversely, other agents often use overpriced properties like yours to help sell their own listings ("Here's what they are asking. Now would you like to take a second look at that first house I showed you?")

If you have a house that really should be priced at $600,000 and you've got it listed at $660,000, you are trying to compete against homes that really are worth close to $700,000 and all of a sudden your home really is not competing well. You want to compete with what is available out there among homes similar to yours.

If your home remains on the market for too long, agents and buyers may begin to wonder if there are other, perhaps more serious reasons why it isn't selling.

It becomes shopworn, the same as a jacket hanging in the store week after week. People are aware that it has been on the market a long time and agents stop showing it.

2) Your home doesn't show well
Your home is competing against shiny new houses in those pristine subdivisions out in the suburbs with their attractive prices, incentives and community amenities.

Face it: Even the best old house needs a little makeover if it hopes to attract a qualified buyer.

The good news is most of the work will be cosmetic and relatively inexpensive: a new coat of paint, a few attractive window boxes, a thorough cleaning of floors and carpets. Voila! The place may look good enough to reconsider.

A good real estate agent can advise you on where your time and money are best spent.

Price and condition are two things that the seller can do something about. I always give people my 'honey-do' list. I think paint is probably a seller's best friend because it makes things smell fresh and look fresh. If it's time to paint, it's time to paint. It's the best return on investment.

3) You're in a bad area
Nothing has a greater effect on your home's value than its location. Your humble abode might be worth a king's ransom were it located in
Palm Beach, Aspen or San Francisco. It might even jump thousands in value just two streets over in the next (and far superior) school district.

The point is, location rules in real estate.

If your home's location is less than desirable, your options are somewhat limited. A good real estate agent will do her best to help you accentuate the positive and eliminate the negative of your circumstances, say by using foliage to screen off offensive adjoining properties or dampen traffic noise.

The best way to compensate for a poor location is to reduce your asking price or offer attractive incentives such as seller financing or closing costs.

4) You have an unrealistic listing agent
Yep, they exist: Real estate agents who mislead, misfire and misbehave.

Their bad advice can cost you plenty in time, money and the sheer hassle of keeping the place show-ready 24/7.

This bad agent will allow you to overprice your home ("Here's what I can get for you if you list with me!"), not market it properly, fail to screen for qualified buyers, be unresponsive to interest from other agents, and keep you totally in the dark throughout the process.

What's more, if your agent is abrasive, arrogant or otherwise difficult to work with, other agents may not want the hassle of showing any of his listings to prospective buyers.

5) You are battling competition or market conditions
We've all heard the terms "buyers market" and "sellers market".  In real estate, market conditions are affected by any number of external forces, some of them predictable (the weather, sort of), some of them unpredictable (the local economy, interest rates, public optimism or pessimism).

In a hot sellers market, homes go fast. Inventory (homes on the market) may be low, meaning less competition for you. Chances are better that you will get your asking price in a hot market; in fact, it is not uncommon to even be offered more than your listing price.

But in a flat, cold or buyers market, sales slow to a trickle, inventories grow and buyers can find bargains, especially when they know the seller is motivated (i.e., paying on two mortgages).

If you're trying to sell in a flat market, you're not only competing against all that vacant new construction, but against rentals as well. In this case, be prepared to settle for less than top dollar, or wait to sell until the pendulum swings once again in your favor.

6) You have ineffective marketing
Gone are the days when an agent could simply place your listing with the local multiple listing service, and stuff the flyer box.

Today's top performers launch a multi-level marketing plan that includes promotion to area agents, newspaper ads, internet open houses, listing fliers, placements in local real estate publications … and full internet exposure, which is proving to be the biggest bang for the buck.

Computers and the internet have changed the face of real estate. According to the National Association of Realtors, today 82% of all home start their house hunting on the internet. The best real estate agents are computer-savvy. They have your listing in color on their laptops to show clients and communicate frequently via e-mail, a particular boon when working with out-of-town buyers or giving listing presentations to other sellers who are wanting to move.

Suffice it to say that if your real estate agent isn't listing your home online through multiple internet sources as well as with the local MLS, you may not be getting the exposure necessary to find a buyer. Not only should your listing be in the top 84 real estate search websites (such as Realtor.com and Homeseekers.com), but it should also be in the top 12 classified searches such as Craig’s List, Edgeio and Oodle.

There are those who just put the listing in the MLS and pray it will sell, and those that put a lot of effort into marketing their listings.

To search for homes right now, visit: www.GoFindRealEstate.com

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Open House Cafe

Blog by Remy Chausse
Irvine, California

You can search for homes for sale anytime at www.GoFindRealEstate.com I'm a southern California real estate agent, working with buyers and sellers who often say ... I've never done this before ... I have no idea what I'm doing! ... and we get through it together, as we both look forward to a successful transaction! I created the Open House Cafe to provide a warm and cozy format with tips for buying a new home (or selling the existing home). Every day is open house day for you to ask your real estate questions!

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