Why Homes Don't Sell
Disclaimer: I am a Florida-licensed real estate agent. This article is intended for information purposes only and should not be perceived as a solicitation.
“Good luck buying a home in this hot housing market” (CNN)
“Homebuyers living in these cities need to move fast if they find a house they like” (CNBC)
“More Americans think it's a good time to sell” (Realtor.com)
“Manhattan apartment prices hit new high of $2.19 million” (Forbes)
“Life is good for US home sellers” (CNN)
“Housing inventory has gotten worse as demand rises” (CNBC)
Despite these headlines, some sellers still see their homes sit on the market month after month, for sale sign fading in the front yard, showings fewer and farther apart. How is this possible when major news outlets say the market is hot and there isn’t enough inventory? There are two main reasons why a home doesn’t sell - price and marketing.
Not priced correctly
Notice I didn’t say “priced too high”. That isn’t always the case. In rare cases, a home may actually be priced too low. When this happens, buyers and their Realtors may believe there is a problem with the home and simply not look at it. I’ve seen this happen twice. In both cases the home sold within weeks of raising the asking price to its true market value.
More often, however, the property is priced too high for its condition or compared to homes of similar size, style, age, and location. Consider a home listed at $300,000. It has never been updated and needs roughly $40,000 to update and upgrade it. Other homes in the same neighborhood that have been updated sell quickly around $300,000. Clearly the subject property should be listed lower to take its condition into account. Likewise, a 1500 square foot home won’t sell for as much as an 1800 square foot home right next to it, even if all else is equal.
Your home's price range is not hot
In my Tampa Bay market, we see this often. The $100,000 to $250,000 price range is super hot with a supply of about 1.6 months. Overall, considering all price ranges together, we have roughly a two month supply of homes. That’s considered a super hot seller’s market. However, the $900,000-plus price range has a 13.8 month supply, which translates to a very good buyer’s market. The $800,000 to $900,000 price range has an eight month supply, also a buyer’s market though a much more normal market overall. The bottom line is, even if your home is priced right, it may not be in that super hot price range. Those sellers need to exercise a little more patience than the ones in a seller’s market.
The obvious: signage, MLS, Realtor.com, and other sites
Doesn’t everyone do this? Well, no. Also, that’s why it’s called “the obvious”. Why wouldn’t everyone use these very basic marketing tools, you ask. Well, not all real estate agents are created equal. Some are not members of the board or that area’s multiple listing service (MLS). Not everyone puts up signage or the signage they do place in the front yard is small or otherwise not easy to see.
Not everyone places their listings on multiple websites. MLS members can have their listings feed to several sites, depending on their brokerage’s agreements with those sites. The company I work for - Keller Williams Realty - feeds listings to over 350 search engines, including giants like Realtor.com, Zillow, Trulia, and Yahoo. For Sale By Owner (FSBO) sellers have to input their homes one by one on these sites, an extremely tedious and time-consuming process.
Realtors also have access to a service called IDX - internet data exchange. IDX allows participating brokerages to display each other’s listings on their own websites. Back in the days before IDX, I could only display my own listings on my website. Now, anyone who uses my website can see all of the listings on the MLS. While this may mean the buyer for your home comes from a different brokerage, it also means a much wider reach for buyers, and that means a much greater chance to get your home sold quickly and for the most amount of money.
The not-so-obvious: accessibility
This one seems like a no-brainer, too. Of course buyers should be able to easily view your home; however, I’ve witnessed Realtors and sellers who don’t answer their phones. I’ve seen showing instructions like, “Show only Monday, Tuesday, and Thursday between 1 and 3 PM” or “No showings until April 2017” (in December 2016) or “Showings only on weekends”. I get it - sellers have schedules, too. Some things are out of your control, such as giving tenants 24-hour notice. Still, accessibility is probably the second biggest reason, behind price, why homes don’t sell.
The not-so-obvious: photos and descriptions
Have you ever seen a home listing that had one photo and a description which read, “3/2, update”? Didn’t catch your attention, did it? Top quality photos of the home and an accurate, well-written description go a long way to getting buyers in the door.
The not-so-obvious: prospecting
A good Realtor will call or personally knock on the door of all of your neighbors. This is one of the best ways to find a buyer. Who wouldn’t want their brother/sister/cousin/friend/co-worker living right down the road?
The not-so-obvious: staging
Many sellers know by now to declutter and depersonalize the home while it’s on the market. Staging takes it a step further - adding warm touches like pillows or throws, removing paintings, painting the interior to look fresh and cohesive, and moving furniture to showcase a more efficient traffic pattern. Even vacant homes can be staged with inexpensive items like a small and chairs, candles, or towels.
The not-so-obvious: open houses
Maybe this one is obvious. In the first week or so, it’s a great idea to get the neighbors in for a look. In a hot price range or desirable neighborhood, buyers drive around on the weekend to find new prospects. Realtors generally hold an open house to find buyers, for your home or any others the Realtor has listed. Your home may not be a fit (size, price, etc) but another might be a perfect fit, and vice versa.
Bottom line - if a home doesn’t sell in a hot market, take a good look at the price and marketing. Chances are, a small change in one of those areas can bring big results and get your home sold. After all, that’s your goal, the Realtor’s goal, and the buyer’s goal. And the faster you can sell your home, the sooner you can go out and enjoy the rest of your life.