May 29, 2024
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May 29, 2024
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Linking Northern and Central NJ, Bronx, Manhattan, Westchester and CT

Why Is My House Not Selling?

Even the most wonderful, accurately priced homes in the best locations do not always sell quickly. Sometimes, the reasons are beyond the seller’s control because a local market may be experiencing the impact of economic forces over which the individual seller has no control—for example, if the economy is in recession or if a major employer has left the area. These considerations aside, there are a few factors upon which most experienced real estate agents Agree.

First, the home must be correctly priced. When a property is on the market for a long time, buyers naturally ask why it has not sold. My honest answer is almost always that the owner initially insisted upon an asking price that was too high. Homeowners who become emotionally attached to their properties tend to overvalue their homes and forcefully proclaim that they will not “give them away.” Often, these owners do not listen to bids that are below their inflated expectations and do not take the strong hint when a number of bids cluster around a certain (lower) price point; this point is, in fact, the true market value of the home! Another odd fact known to agents is that the first offer is often the best offer—so consider it seriously and negotiate sensibly with the prospective buyer.

Even if the home was correctly priced at the outset, if the home has been on the market for a long period of time then the owner should ask his/her agent to periodically examine comparable sales so that the asking price of the home can be adjusted if necessary. Area events that impact the value of the home should also be considered—did the local airport suddenly change the flight patterns to fly over your home? If the market has changed from fast to slow, then buyers will now expect bargains. An overpriced home will not attract buyers. Some owners over-price the home in order to allow for negotiation by buyers, but buyers, seeing the inflated price, may be discouraged from visiting the house in the first place.

Furthermore, the owner who has installed expensive upgrades should not necessarily expect to recoup his/her expenditures, especially if these upgrades are of little or no importance to buyers—in other words, don’t price the house according to what you need to sell it for; price it in accordance with the comparables. And, if you do need to reduce the asking price, then do not do it by small amounts; a drop of $1,000-$2,000 will make no impact, so drop the price by the necessary amount, and remember that you are not losing money by doing so because the house was not selling at the higher price so it was not worth that price to begin with.

Also, remember that even if your buyer agrees to pay an above-market price, then the lending institution’s appraisal will not support the price and the lender will reject the loan unless the selling price is lowered or the buyer increases the amount of the cash down payment. How many buyers would do that, after being told that they would be paying too much for the house if they did so?

You need not take the real estate agent’s word about pricing. Hire an independent appraiser before you list the house. And while you’re at it, have an engineering inspection so that you are aware of what needs to be done so that you can correct problems or at least be prepared when the buyer’s engineer identifies the problems, for the buyer will surely use this information to negotiate the selling price downward. Also, have you made certain that there are no legal impediments to the sale? Do you have clear title to the property? Are there any liens—tax liens, mechanics’ liens, unrecorded payoffs of mortgage?

Another problem related to pricing occurs when a stubborn seller insists on initially pricing the house too high and then refuses to lower the price as the market changes. Or, he/she lowers the price to conform to the previous market cycle and is not current. Or, he/she decides upon a price and insists that it is non-negotiable. Foolish and self-defeating, you think? There is at least one home in Riverdale that has been on the market for years because the sellers have behaved in this manner. One of the results of this behavior is that agents no longer want to list the house.

A second area of concern is the condition of your home. If you know that certain items need fixing, did you attend to these before you put your home on the market? If you are not going to make the repairs, then expect that the buyer will determine the price of repairs and will offer you less than the asking price for the house. You want buyers to focus on the house, not to walk around mentally adding up all of the costs of fixing up the place. If you are certain that the house needs an expensive upgrade—say, a new kitchen—and you are determined to install it, then don’t put in a cheap job for which the buyers won’t want to pay. Before you show the house, did you declutter it as much as possible? Buyers don’t need to be distracted by your personal effects—photos, magnets on the refrigerator, etc.—because buyers want to picture themselves in your home. I have also observed buyers enter a home and focus more on the photos than on the property! If you can do so, give the home a fresh coat of paint where needed: not white, but a nice, neutral color, especially if you have walls that are painted in bold, jarring colors. Also, do not show the property in its messy state; did you clean your home, remove the dirty, old carpeting and polish the floors, prune the bushes, mow the lawn, etc.? Did you get rid of odors from mold and mildew and animal droppings? Do you open the blinds; turn on the lights and work on curb appeal, because that’s the first impression of your home? In other words, try to see the house through the buyer’s eyes. (My buyers seem to particularly notice the floors, the paint job and the view from the windows.)

When the house is being shown, did you get out of the way? Don’t follow the buyers around. It’s the agent’s job to show the house, not yours. You want the buyers to feel free to look for as long as they need to do so, to imagine themselves in the home, to make comments, to ask questions and not to feel inhibited by your presence. Comments made by buyers in the agent’s presence give valuable information about your home’s shortcomings and good points—but these comments would never be made in your presence! So make yourself scarce until the end of the visit when the buyers may have questions that the agent can’t answer. And while you’re at it, make certain that your pets are not in the house. Pets are a distraction and some of your prospective buyers may have allergies or may be afraid of certain pets.

Perhaps your home is not selling because your real estate agent is not paying sufficient attention to your listing and is not keeping up with pricing trends in the area. Interview a few agents and beware of the agent who says he/she can get you a high price without his or her having done a market analysis. If you choose an agent based on an unrealistic price then the house will not sell and you’ll end up dropping the price anyway! But remember that you can’t blame the agent if the house does not sell because of factors beyond the agent’s control, and that you must do your part by keeping your home attractive to buyers and by being available, even on short notice, when the agent wants to show. You should have enough confidence in your agent to follow his/her advice; don’t hire a good agent and then disregard the advice! Also, before you hire an agent, try to check out how the agent operates—is he or she honest (you may also be held liable for any misrepresentations that the agent makes about your property), does he or she get along well with other agents who want to bring buyers (if not, then other agents may decide not to show your property), does the agent willingly co-broke, have a pleasant personality, is a good salesperson, is enthused about your property, knows your neighborhood, writes good advertising pitched toward your target market and updates your ads if you have made improvements to the property, etc.? In other words, will your agent represent you and your interests as effectively as possible? Also beware of some discount brokers who offer you a low commission. This may be a legitimate way to get your business, but be careful and ask the agent exactly what services the brokerage will be performing for you. And remember that while commissions are negotiable, an agent will want to work harder for you if you agree to pay the prevailing rate in your area. For example, if an agent has several roughly equal properties to show, do you think that yours will be first if the agent can earn more money by selling the one with the lowest commission? Yes, the agent will show your property—last!

Location, location, location goes the old saying. There is not much that you can do about this and it is especially vexing if aspects of the location have changed since you bought the house—for example, the peaceful country lane in front of your home has now become a noisy county road. If your location is less than ideal, then remember: one way to compensate for a non-optimal location is to reduce the price!

Let’s say that your house is priced correctly and has all of the right attributes, but that the market is now slower than it was. What can you do to move a sale along? You might offer concessions to the buyer. You might, for example, pay some of the closing costs or pay the property taxes until the end of the year or offer a home warranty. If you have a superbly qualified buyer then you might hold the mortgage and offer the buyer an attractive rate of interest that is lower than what the bank charges. You might make a significant upgrade—how about reducing the price of the house by the cost of a new roof?

In a slow market and without a prospective buyer, you may believe that your house is becoming stale if it is on the market for too long a time. So, if you don’t need to sell immediately, remove the house from the market and put it back on when market conditions have improved. When you do so, change the ads with new text and new photos. You can also follow this advice if you had put your house on the market in the dead of winter—take it off until spring.

By Vivian J. Oleen, Associate Broker, Sopher Realty

 

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