Why Homes Don't Sell
Why Not Every Home Listed for Sale Sells
“While most properties will sell in any almost any market, not every agent has the expertise or skill set to sell every home. I specialize in listing and selling the properties that may have some unique attributes or have lingered on the market.”
In any real estate market - whether there are a lot of homes for sale or very few, selling a home is not always a guarantee. The harsh truth is that not every home listed for sale will sell, and there are several reasons that contribute to this unfortunate reality. There are some factors that sellers and agents have control over and others are beyond their control.
Here are the top reasons listings don’t sell:
Price
Presentation
Location
Condition
Representation
and here’s a few other factors to also consider….
Market Conditions
Exposure
Seasonality
Non Co-Operative Tenants
Personal or Title Issues
PRICE
Pricing plays a crucial role in the success of a home sale. Inflated or unrealistic listing prices can deter potential buyers from even considering a property. In low inventory markets, buyers will come to open houses to take a look and maybe even wait for the price to drop. Others simply won’t even look.
There are two reasons that some homes are over priced and both come back to the same source: agents have not been direct and candid with home owners about the true value of the property in an arm’s length transaction on the open market. This sometimes happens because sellers just have an unrealistic price in mind and their agent isn’t willing or able to help them understand the market.
It also happens because some agents will “buy” a listing - meaning that they will promise they can get a price that will get them the listing but that won’t get the home sold. Agents will do that because they are hoping that later on they can convince the seller to lower the price or they are simply wishing that the property sells.
So what are the “best practices” for pricing?
Best Practices for Pricing a Home to Sell
Consider Comparable Sales: On your own or with a knowledgeable agent you trust, look for comparable properties that have recently sold in your neighborhood. You should review their original listing prices, any price reductions, the final sales prices, any seller concessions, and the time spent on the market including being in and out of escrow or re-listed. Depending on where you are selling, some of this information may only be available to a licensed agent with MLS access. It is best to avoid “what about that one” because an appraiser won’t. An appraiser will look at all the relevant sales and make adjustments. You should too.
Evaluate Unique Features: Your home may have some truly unique features and upgrades that set it apart from other homes in the area. It is totally fair and good real estate practice to determine how these attributes may impact your home’s value and adjust the price accordingly.
Here’s some examples of unique features that may positively affect your home’s value:
Views
Recent Cosmetic Updates
New Components (ie roof, HVAC. windows, electrical)
Larger square footage or bedroom / bathroom count than nearby properties
Larger lot than surrounding homes
Extensive home automation
There are many more unique features and most of them are very subjective. There are also features that may make your home more desirable but do not translate into a higher appraisal value.
Consider Market Conditions: No sale happens in a vacuum so you have to take into account the prevailing market conditions and buyer behavior and adjust your price accordingly. This goes beyond whether whether it's a buyer's or seller's market. This is where median sales price, absorption rate, and days on market of all the homes for sale in your neighborhood comes into play.
The most important market condition to focus on is how many homes similar to yours in the same price range have sold in the past 3-6 months and how long did it take then to sell. Did they sell for more or less than the list price. How many competing properties might be on the market at the same time as you are. After that, it may be productive to look into the broader issues such as whether mortgage interest rates are high or low, whether you are competing against foreclosures or new construction, is employment in your area growing, is your neighborhood going through gentrification, how is new construction priced, etc.
Be Realistic | Avoid Overpricing or Underpricing | Stay Competitive
While you may have sentimental value attached to your home, that does not increase its desirability for prospective buyers. They don’t care that you raised your kids there (sorry), that it has been in your family for generations or about other life events that may be important to you. It's essential to be realistic when pricing it for sale. Setting a price too high can deter potential buyers, resulting in a slower sale process or lower price. For each home there really is a balance between attracting buyers - which is the goal of the list price, and receiving fair market value.
For most properties and in most markets, if your home isn’t under contract within the median days on market for similar homes, you really have to review and reassess your pricing strategy. Often, homes on the market for 21 days will still be on the market at day 60 without a price adjustment. How much to adjust and when is beyond the scope of this article and an art in and of itself - just like your initial pricing.
PRESENTATION
Presentation includes both how the listing appears on the internet as well as in real life when prospective buyers come to the property.
Online
These days, most prospective buyers are first going to view your home on their phones and you have less than 2-3 seconds to get their attention. Your online marketing should include:
Professional photos
Drone shots where possible
Twilight shots when applicable
3D Virtual walkthroughs
Videos
Floor plans
There is a world of difference between professional photo shoot and well lit photos and ones that aren’t. And there is a difference in photographers - make no mistake about it.
If the photos attract buyers, they will then look at the other media. But if they scroll past your listing because the lead photo isn’t enticing, forget everything else. You’ve heard it said many times, “a picture is worth a thousand words”. Speaking of which…..
Your Verbal Description Is Important Too
Even if IRL almost no one reads anymore, for those that do, descriptions that evoke emotions and tell a story enhance the listing as long as the media also is great. Phrases like “entertainer’s delight”, “executive home”, “gourmet kitchen” etc are meaningless. Instead tell a story. How can you entertain in the house, what makes the kitchen “to die for”, how is the property used, what will the new owners most enjoy about living there?
CHECK YOUR MEDIA ON MULTIPLE PLATFORMS
While most buyers are using their phones initially to view homes, many will look at the property again on a tablet or with a full browser. The media must be compelling on all screen sizes and devices and across multiple social platforms. Not every agent is thorough enough to check how the property is presenting online.
In Person
Your listing looks amazing online and now buyers want to see it in person. That’s great but how well does it show? You should carefully monitor the following during the time your home is on the market:
Decluttering
General Cleanliness
Curb Appeal
Your pets (if any)
Lighting
Showing Off the Best Attributes
Chances are that your agent had you move a lot of your possessions into your garage or off site for the photo shoot. Leave it there. Buyers will expect your home to look like it does in the photos and in most cases that means decluttered.
The same goes for general cleanliness. Many sellers will have their home deep cleaned before it goes on the market and that’s the right move. But if your home is lingering on the market for a while, you want it to remain clean. Buyers often misconstrue messy or dirty with deferred maintenance even though those two are often unrelated.
Curb appeal counts. The property has to look good when the buyers arrive. Unless you are living in a condo where you don’t have control over the exterior, make sure the first impression is great. That includes not only lawns and plantings but exterior paint and even the front door - which many people might repaint before the home goes on the market.
Not everyone is a pet lover (unfortunately) and pet smells or hair can be a turnoff for many people.
Lighting is also important. Most buyers will view properties during the daylight hours. If you have good natural light, don’t block it with window coverings when the home is being shown. Conversely, if you have great light, don’t have the lights on in well lit rooms during the day. But, if there are rooms that are dark, there’s nothing wrong with having the lights on during showings. Just remember to replace any old yellowish lights with newer LEDs.
LOCATION
You’ve heard it a million times: location, location, location. That’s because it is the one thing you can not change about a property.
The location of a home can heavily influence its price and even whether a property sells or not.
Location cuts both ways, though. Factors such as proximity to desirable schools, convenience to amenities, or accessibility to transportation can significantly impact value. And if you are lucky enough to have a view, show it off.
But even in a seller's market, homes in less desirable locations may face more challenges in attracting buyers. Tough locations usually are homes on main streets, properties adjacent to commercial buildings or electrical structures, under flight paths, near freeways, etc. Those are the obvious ones. Sometimes less obvious are the surrounding properties. For example, a single family residence surrounded by apartment buildings will sell for less than the same SFR in a neighborhood of other SFRs. That’s known as the principle of “conformity” in real estate.
CONDITION
A home's condition greatly impacts marketability and sales price. Outdated interiors or exteriors, major maintenance issues, or poor curb appeal can make potential buyers quickly lose interest or negotiate for extensive price reductions.
There are times when investing in repairs, renovations, and updating makes a lot of sense. Not only can you increase your home's chances of selling, it might sell for a higher price as well. In some instances you will recoup your investment and even make a profit. Other times, it is simply a waste of time, money and resources.
Before you make any major investments, best to do the same analysis a flipper might to see if the updates pencil out. The smaller and easier updates usually have a bigger bang for the buck. For example, your lighting fixtures (including ceiling fans) may be outdated. A few hundred dollars up to a few thousand dollars can really make a huge difference. The same goes for painting. You may have liked that deep burgundy color when you picked it out but just repaint a neutral color. You can usually get a good idea of what’s popular today by looking at new construction homes.
Another less costly seller hack that can really pay out is repainting - but not replacing out of date kitchen and bathroom cabinets. Most boxes can be sanded and repainted or resurfaced for a lot less than it will cost to totally redo the kitchen.
If you have worn or stained carpet in some rooms that can’t be cleaned or stretched, there are some low cost options for replacement that will show well.
And when you paint and put in new carpet, the home often has that new construction smell.
Think of this process as flipping your own home.
REPRESENTATION
Team or Individual Agent?
Over the past ten years we’ve seen rapid growth in real estate teams. These broadly take two forms. Some real estate teams are quite large with upwards of ten agents plus transaction coordinators, marketing specialists, and other staff. There are some great teams with this structure but many buyers and sellers often comment about the lack of personal attention. Additionally, most large teams are staffed with agents of different experience levels and more than a few inexperienced people. As a seller you might think you signed with the top agent in your area but on a practical level you’ll most likely have limited interaction with that big name and may never even see them again.
There are also smaller team most often made up of two or three agents who have partnered together to pool their resources. The smaller teams often retain the personal touch.
By far, most agents work on their own although some have licensed (or unlicensed) assistants to help with the workload. For many buyers or sellers working directly with one agent directly provides the highest level of personal touch and accountability and the most satisfying experience.
There is a Difference in Agents
Just as each home is different, there is a difference in agents. Simply put, not every agent can sell every property. Or if they do sell it, they may not get the highest price, may take too long, or worst of all, make mistakes that get you as the seller into a lawsuit.
Some agents are better at different price points than others. The “luxury agent” may not put the time or effort into lower price homes - even if it is still your greatest asset. Conversely, those agent who sell at the median price for their market may not be comfortable with the higher priced properties in their area.
The average agent does little more than put your home into the MLS which then syndicates the listing to all the major portals. They may do an open house and post the listing on social media - but that’s it.
Here’s why the disconnect happens between who you thought you were hiring and the client experience.
There are agents who are great at doing listing presentations but not at selling. Their stock in trade is getting you to sign the listing contract but not getting you into and closing escrow.
So if your home has not sold, best to possibly re-evaluate how you made the decision to list with the agent / team / brokerage you chose. It may have been the right decision based on what you knew then but armed with more data and knowledge, you might find that different representation will get better results.
MARKET CONDITIONS
Market conditions were briefly touched upon earlier relative to pricing but more broadly remember that a rising tide raises all ships. In over heated markets like we saw during the peak pandemic years, any property at any price was selling because of the unusually low mortgage interest rates, lack of inventory, and unprecedented buyer demand. Conversely, when rates more than doubled in less than year’s time, many sellers missed the high water mark.
Conversely, in a buyer's market, where supply outweighs demand, homes may stay on the market longer, and competition among sellers is fierce.
Just bear in mind that economic fluctuations, interest rates, and lending policies can all play a role in the pace and success of home sales. Or as stock traders say, “the trend is your friend”.
Ultimately, your home’s value is a function of the macro market.
EXPOSURE
One of the biggest mistakes sellers make is not adequately exposing their home to the market or in some cases going in the other direction and over exposing it. No one is going to buy your home by just viewing it online. Real Estate is still a very physical business and buyers have to experience homes in real life.
Unless you are a celebrity, have an extensive and art collection hanging on the wall, or someone living in the home is ill, you want as many people as possible to view your home in order to sell for the highest price.
That means the listing should be syndicated in the MLS, easily available to show, and open for at least a few weekends.
Open Houses
Open houses can definitely be effective in not only getting potential buyers in to see a property but also creating a selling environment. While the thought of dozens of people - including nosy neighbors, traipsing through your home over the weekend can be less than exciting, it is a necessity to the sales process in most instances.
Lockboxes
Many homes listed for sale have lockboxes on them to make showings easier. With a lockbox on a home, the buyer’s agent can schedule a showing more easily. Lockboxes come in two varieties - combo or electronic. In Southern CA the electronic boxes are typically blue.
While it is extremely common to see lockboxes on vacant properties and new construction, it is understandable that for privacy and security reasons many sellers don’t want lockboxes on their homes. However with electronic lockboxes the listing agent can more readily control access by adding a code that buyer’s agents can only get from the listing agent. Electronic lockboxes can also be set to only allow access at specific days or times. Lastly, agents can determine who was in a home and at what time with electronic boxes which are only accessible via software available to licensed agents.
TENANTS
Selling tenant occupied homes can be challenging at times. In almost every instance, it is preferable to wait until the tenant is no longer in the home. If you are fortunate enough to have co-operative tenants that will allow showings and inspections, consider yourself fortunate.
PERSONAL OR TITLE ISSUES
If you are going through a transition in your life such as a divorce, a distressed sale, or a sale upon death and have to sell, it is important to not let the circumstances cloud the sales process. This can take many forms. The best practice is to seek help from knowledgeable professionals with the temperament and empathy to understand and manage through the process.
Another impediment to sale could possibly be title issues that as a seller you are not aware of. These often track back to personal issues such as inter family quit claim deeds, people on title who have passed away or ex-spouses who may have to provide an affadavit.
While not every home listed for sale sells, understanding and addressing the various factors that contribute to this can increase the chances of a successful sale. Accurate pricing, impeccable presentation, desirable location, favorable market conditions, and strategic marketing are all essential ingredients in achieving a successful home sale. By leveraging these elements effectively, homeowners and real estate professionals can enhance their opportunities for a swift and satisfying transaction.