I’ve talked about the four principles of marketing your home – PACE. If you home hasn’t sold, it is most likely because it hasn’t adhered to some of those principles of home-selling. Reviewing those principles and comparing them to your time on the market are key to adjusted tactics to get results.
“What is a long time to be on the market?”
Firstly, what is a long time? For the Fort Hood market, the average days on market for 2014 was 125 days, or about four months. That is from going live to closing, so reasonably you would probably be hoping for a contract at the two to three month time period.
No surprise, the #1 reason agents suspect a home might not be selling is that is is overpriced. Overpricing your home can hurt getting offers and negotiating a deal, but where it really hurts is even just getting people to see your home.
For example, if your home is really worth $125,000, but you decide to list it at $135,000 to see what you can get for it, there may buyers looking at $125,000, but they don’t even see your home. That is because, maybe, they are looking at homes under $130,000 for example. Or maybe their budget is $120,000, and they are just seeing what another $5000 can do. What they don’t see is your home in the search results, even though they may have loved your home and thought it worth the fair market value of $125,000.
“Now’s not a good time to show the home, because…” Per the ActiveRain Infographic above, a shockingly large number of agents have apparently had problems getting their seller to even make the home available to buyers during showings.
Think about these numbers. The average buyer looks at 10 homes, meaning, if everything else is right, you might expect to show your home 10 times before finding a buyer. Empirically, I’ve found that a home is doing well to get a showing once a week or so, though it depends on the home. That means you might have 10 weeks, over two months, to find a buyer. Unless you happened to decline showing the home when that One buyer was looking, in which case you can reset the clock.
“Oh, but, they can just reschedule for another day.”
Working as a buyers agent, my clients go back to see homes they missed 10% of the time. Instead, they usually make an offer on one they did see that day. They’ve already seen a handful of great homes, and yours wasn’t one of them.
Four of the six items in the above ActiveRain infographic are related to the condition of your home. The pictures may be great, the price perfect, and the buyer gets to see your home with short notice. But compared to the clean, refurbished home or, perish the though, the brand new builder home with zero worries about repairs or imminent home maintenance costs, your home stinks (maybe literally).
Sometimes it can’t be helped. You know the carpets need replacing, but you just don’t have the money to do it. That is not an ideal situation and you will be selling at a discount (more than just the cost of new carpets).
What does hurt is the stuff that can be helped. Buyers make emotional decisions, and even though smells can be taken care of with new floors and paint, or a roof fixed, or a dirty floor cleaned, there is still a tiny “there’s stuff wrong with this house” thought reverberating in their heads that may mean you are losing out to other turnkey or better maintained alternatives.
This shouldn’t be a problem if you are using an agent. There’s great extra stuff that a high-speed agent might do, but putting your listing into the MLS is the main one. Just get it into the MLS. Local agents and websites should all pick up on it.
Extras like open houses, “Just Listed” mailings, and Craigslist might help, too. But the MLS is the thing.
So possible exposure problems might be that you don’t have an agent. Listing your property For-Sale-By-Owner is a great way to get low-ball investor offers, and phone calls from agents who want to list your home. but it is not a great way to get the exposure your home needs.
Also, using an out-of-area agent might hurt. They may be putting it on the MLS, but which one? If it is not the local MLS, then local agents won’t see your listing, and your agent isn’t doing you a lot of good. It is especially common for foreclosures in our area of Central Texas to be listed with agents in Austin or Dallas who don’t even have access to the local Fort Hood MLS, and therefore none of the agents in our area even see these homes.
Maybe there just aren’t a lot of people at any one time looking for a home like yours, and so it takes a little longer. In my previous post, “How Many Buyers are Looking for Your Home”, I look into how many buyers are looking at different price points in different areas in our city. For homes in the $120,000s, for example, there should be few reasons you can’t sell reasonable quickly in most of Killeen if you are competitive on the other three principles (Condition, Accessibility and Exposure). But a $300,000 home only has a few buyers a month. So you may just be competing for just a few buyers. More expensive homes generally are on the market longer than more affordable homes, even when priced right.
Investors are often advised to buy “conforming” residential properties, that is, homes that are not too dissimilar from other properties in the neighborhood. That is because conforming properties rent and sell better and faster than odd-ball homes, or homes that are wildly nicer than the neighborhood as a whole. If your home is a $250,000 home in a $100,000 neighborhood, then buckle up.
It doesn’t mean you can’t sell. But it does mean you will probably have to be realistic either about the time on market (months or years) or make some concessions to the buyer (likely price concessions). A good agent should recognize the danger and at least make sure you are prepared for it.
You Have Had Offers
Maybe you have already had reasonable offers, but the didn’t work out or you turned them down. And now you are wondering why you are still on the market. It is possible you already declined your best chance at a deal. Remember that the value of anything is not it’s advertised sell price, but what a buyer is willing to pay. Maybe that amount does not meet your bottom line, and that is fine. You don’t have to sell. But don’t be surprised your home is still on the market.
It might just be bad luck. Hard as it is to admit as an agent, part of selling a home really is luck. No two homes are alike, nor are any two buyers alike. So part of selling is trying to get as many buyers through the door and cross your fingers that one is the “right one”. Some buyers love what other buyers hate.
I’m not talking about if prices are up or down – that is part of pricing your home that we talked about above. Rather, it is just what are buyers looking for and expecting from your area. For example, in my experience, 2 bedroom homes in Killeen are very hard to sell because of the rampant availability of affordable 3 bedroom options.
“Is it time to fire my agent?”
You may be coming up on your six months or whatever listing term you originally agreed with your agent if you are listed. If you haven’t sold yet, it is only natural to wonder if your agent is the great choice you were sure they were when you started listing your home. It is possible some of these issues are agent related. Have they been honest with you about what they thought needed to be improved, or maybe they did and you ignored it? Did they significantly overpromise what the value of your home is, or did you insist on trying a higher price first? Have they gotten you feedback from buyers on showings and done everything else you would expect from an agent?
Be honest with yourself and your agent, and if they’ve been working hard for you, stick with them to see it through. If you have been dissatisfied, or perhaps it’s even just something else like a personality clash, trying it with a new agent can’t hurt, either.