Why Homes Stay on the Market for Extended Periods
Why do some homes take longer to sell compared to others that are eagerly scooped up by buyers? In this video we are going to go into the intricacies of the home sale market while shedding some light on the common stumbling blocks that a lot of sellers fall for and that ultimately lead to extended home sale periods.
The value of a good agent is paramount here as they will guide a home seller through the pitfalls of overpricing and the nuances of market conditions as well as create a targeted marketing strategy that is actually effective. If your house has lingered on a market, then an experienced agent will be able to provide actionable insights and proven tactics to get the house sold.
So what are the factors that discourages buyers and make a house linger on the market for longer than expected? One of the most significant reasons is overpricing. Seller’s will set an asking price that is too high compared to similar properties in the area.
Now you will see an agent actually recommend a higher price to try to do what is called “Buying the listing”. In order to get the business, an agent will set unrealistic expectations which will ultimately result in a stale listing and will create a situation where the seller will get less money for their house and worse terms.
Real estate is the ultimate comparison shopping experience. If your property is overpriced, then it will help sell your neighbor’s house. And vice versa, if your neighbor’s house is overpriced then it will help sell your house. What happens is that a buyer walks into your house and sees the house and determines the value to them based on the size, features compared to the pricing. They then walk into your neighbors house and if they feel that they are getting more value in your house, then your overpriced neighbor actually helps you sell your house.
It’s because they are perceiving that you are offering them more value. And keep in mind that this value can be placed in all sorts of different things. From location to space to updates, even layout… and yes… of course price as well.
And then there could also be a misreading of the current market conditions. Pricing a house in the Summer based off of Spring comps could cause some undesired effects.
But it’s not just pricing issues that can contribute to these extended marketing times. Ineffective marketing strategies as well as restricting buyer accessibility can play a large role in extended home sale timelines. If a marketing plan fails to reach or engage the right audience, then it can lead to insufficient exposure and interest.
And marketing matters. Consider this. As a marketer, we have about 6 to 8 seconds to grab someone’s attention. That’s about two pictures in the real estate world. Quality pictures are critical. Heck, even the picture order matters as those first two pictures better be good ones!
But it’s not all on the agent or photographer as a poor home presentation can be pivotal to the marketing of a property. That poor home presentation can affect the views online to showings conversion rate, but can also drastically affect the showing to offer conversion rate. And the home presentation isn’t just staging. Don’t get me wrong. That can be a major part of it all. But also things like smell and light can play a huge role in a properties home presentation.
Quick story. I had a seller who was a smoker. I didn’t smell it when we first met. We listed his house. We had our first showing and the feedback came in that the buyer was in and out of the property due to the smoke smell. The feedback was sent to the seller and he responded with a “Hey Jeff, I don’t know what to say as I don’t smoke in the house”. Okay. Sounds good. Chalk it up to people being sensitive. Second showing goes in with the feedback of the client not even being able to walk into the property as they were allergic to smoke. This feedback gets sent to the seller and I get an all caps lock reply of a “This is really starting to piss me off. I don’t smoke inside”. I pickup the phone and call him. Hey Mike. So obviously you smoke, so where do you smoke? He said the deck. I asked him if he smoked while wearing no jacket… And mind you it was February. And of course he said no. To that. I told him to keep the smoke jacket out of the house and buy the biggest bottle of febreeze he has ever seen. Febreeze the living daylights out of the house before you leave on the days you have a showing.
And wouldn’t you know it. The house was sold to the next set of buyers.
Presentation matters.
Accessibility and market conditions matter a lot as well. If you have your house for sale, but are limiting showings then you are doing it wrong… The second most important thing when selling a house is accessibility. The list of importance goes 1. Pricing. 2 Accessibility and 3. Condition.
If a house is priced right, but no one can easily see it… Then it’s not going to sell. We see this issue as well as the poor presentation a lot when it comes to properties that have tenants living in them.
As I mentioned, the local market conditions can play a big role in all of this as well. A surplus of inventory or a slump in demand can easily prolong the time it takes to sell a house. This is why it is imperative to examine the CURRENT market conditions. Looking at past comps is great. But if the current market has 3 times the amount of competition in your price range… Then those past comps don’t mean jack.
But also keep in mind that adjusting to market conditions is not just about following trends’ it’s also about understanding broader economic factors that influence the real estate landscape. Think shifting interest rates, unemployment rates, local developments and even geopolitical events can impact how long a house stays on the market for.
Now the role of pricing in a home sale can’t be overstated. Pricing is the major part of a marketing package. Think of it this way. How many cars would Chevy sell if they put a Ferrari price premium on their cars.
When it comes to pricing, you want to price the property at or slightly below what you perceive is the current market price. A well-priced home can generate immediate interest and drive competitive offers, while an overpriced property is likely to languish which will make it a stale listing that will ultimately sell for less than its true value.
There is a “but” to this though. Sometimes the market isn’t just there. Sometimes it isn’t all about price. You need to ensure that you are looking at your competition each week and seeing if they are selling. If the homes that you perceive as your competition is selling then that is telling you… Actually, it is slapping you in the face that buyers are finding more value in your neighbor’s house then yours. You need to reduce your price.
Now if your neighbors aren’t selling and they are just sitting on the market as well. Then that means you haven’t lost any buyers in the market. And there is a good chance that a price reduction may not do what you are hoping.
Now the consequences of overpricing a house can be big and extend beyond a lack of interest from homebuyers. The overpricing can result in a cyclical reductions in price. This is what we call, “chasing down the market”. This can cause buyers to question a property’s desirability.
Now there is another “but” to that. Don’t get too engulfed and think that price reductions are bad. If you get a little aggressive with a price and then quickly adjust to what you perceive that the market is telling you… Then a buyer isn’t going to look negatively on you. They will actually look at that as a positive as it shows that the seller is realistic and is willing to listen to the market conditions. My general rule of thumb is a price reduction depending on price range and market conditions within the first two to three weeks.
Let’s talk a little more about the importance of home presentation and staging. Professional staging can play a pivotal role in enhancing a home’s appearance. And I am not saying staging where a person comes in and removes all of your current furniture to add staging furniture. Stagers will use design techniques to highlight a house’s strengths and downplay any weaknesses. This can include, but aren’t limited to rearranging furniture in order to maximize space, choosing a neutral color scheme, adding light and even adding simple decor to appeal to a broader audience.
The biggest bang for your buck when it comes to staging however will always be decluttering and depersonalizing spaces. Rule of thumb. If you aren’t going to take it to the next place, then get rid of it now. Donate it or junk it. Another rule of thumb is to remove a third. A third of the furniture in the room. A third of the books. A third of the clothes in the closet. You get it. But also use some common sense here. If a book shelf is jammed to the gills with books, then you need to remove more than a third!
It’s important to know that presentation doesn’t always matter however. The homes that have seen years of neglect or the houses that are in desperate need of repairs are going to sell at a discount. It’s in situations like these that homeowners may want to sell to a cash home buyer that will purchase the house in as-is condition. When you are trying to sell my house fast Boston, it is important to work with experienced investors.
When it comes to marketing, know that it can make a difference.
Most agents stick to the put it on the mls, stick a sign in the yard and pray method. The marketing game for real estate has changed. It used to be that pretty much the only medium for marketing was putting an ad in the newspaper. Believe it or not… But I actually remember those days! And they were good days. Because there were really only one or two places you had to be. And your marketing materials didn’t have to be on point… Remember what we said about the importance of those photos?
Well today it consists of amazing photos, 3D tours, Floor plans, Drone photos and even incredible ad copy make a huge difference. It’s not just one place where you need to be today… You need to be plastered all over the web. You need to be on all of the online platforms and be utilizing social media. You need targeted ads and engaging posts which will help generate more interest in the property.
Side note… Brokers opens and Open Houses are holdovers from the past. They both used to be vital in the sale of the house. People would dedicate their entire Sunday to going from open house to open house because that was the only way to see inventory that is on the market.
That is why the pictures are so important. When a consumer walks through a house, that is the second time they have seen it. They have already seen the house, possibly walked through the 3D tour, google mapped how far away it is to work and their parents and even checked out the school feeding patterns while checking out the closest nearby trendy restaurant.
Buyers today are armed with more information than ever before. We don’t get the “oh, i was just driving by and saw the open house and figured I would come in and then fell in love with it types of buyers” anymore.
It’s important to partner with the right real estate team. I can’t stress that enough. You do not want some green behind the ears, just licensed newbie representing you in what is most likely your biggest asset. You need a seasoned professional. Because everything we just talked about is only half the battle. The negotiation for the offer, the home inspection negotiation and even possibly an appraisal negotiation are major battles that are lurking around the corner.
If you are here in Massachusetts, then I would love to chat with you and talk about how We Buy Houses in Massachusetts. But I can also help you with an introduction to other top agents and home buying companies all around the country. At no cost to you of course!