Pinpointing the exact reason a home doesn't sell is not too difficult but it does require a lot of information and experience. Each situation is different and requires an in depth understanding. If you're require assistance locating the exact reason why your home hasn't sold feel free to contact us today for a more in depth review.
Typically when a home doesn't sell it can be traced back to two main reasons:
- There are no buyers in the market place, or
- The property isn't positioned correctly
Although we won't cover it here, I can say for sure that the reason your home didn't sell is because of:
- Your Realtor, and
- Not enough exposure
Of course, when a home doesn't sell there has to be someone to blame and the Realtor is the obvious choice. Unfortunately, Realtors cannont create markets or control markets. It's similiar to a stock broker. When the market is up they make lots of money. When the market crashes, everone is struggling.
Believe me...Realtors get paid on commission. In most cases they'd like your home to sell more than you do.
Let's discuss the two main reasons a home doesn't sell in detail.
THERE ARE NO BUYERS IN THE MARKET PLACE
This one is pretty obvious and mostly common sense. If you're selling ice in the middle of the artic you might notice a lack of buyers. If no one is looking to buy ice then it won't sell.
It's the same thing in real estate. If there are no buyers then there are no sales.
The challenge with most home sellers is how do you figure out if it's the home or the market?
Suprisingly, the answer is quite easy to find. Call your Realtor and ask these questions:
- How many homes have sold in my subdivision in the last six to twelve months?
- How many homes have sold outside my subdivision (within same city and price range) in last six to twelve months?
In reference to the first question, if the answer is 'none' then it's an indicator that there's no market. If the answer is 'a few' or 'a lot' then there is market. The issue is the property. It's not positioned correctly in the marketplace.
As for the second question, if the answer is also 'none' then it's surely the market and little can be done unless you're willing to make some drastic changes (give up home to the bank, short sale, rent, not sell, etc.).
On the other hand, if properties similiar in price and within the same city, town, village, etc., have been selling then it, once again, indicates it's not a market issue...it's the property.
Basically, if there is no market then it only makes sense your home won't sell. However, if there is a market, evidenced by other similiar homes that have sold, then it means your property is not positioned correctly. Unfortunately, 'your' buyers are overlooking your property and purchasing a different one...and that's not good.
THE PROPERTY ISN'T POSITIONED CORRECTLY
Finding out whether there is a buyer's market is pretty straight forward. This section, however, is a bit more complex because we need to figure out what your current position is and how to correct it. In the game of real estate there is no second best. If a home is not in the No. 1 position, from a buyer's point of view, it won't sell.
Remember, every home and situation is different. If you are still having difficulty understanding any of this, it's ok. Pick up the phone and contact us for help today.
We'll start out with a simple scenario. Let's say I helped sell your property and I'm helping you to purchase your next one. For whatever reason, you ask me for a dollar bill and I present the following. Which one would you pick?
Dollar A
Dollar B
Dollar C
Most people, when given the choice, will choose Dollar C. Try this yourself with a friend or co-worker. Nearly everyone wants the 'nicer' dollar. But, why? They're equal in value. One isn't neccessarily better than another....they're just dollars.
What if I only present these two?
Dollar A
Dollar B
Most people, when given the choice, will choose Dollar B. It's the same reason as before - we want the nicer dollar.
This is all about positioning. In the first example, Dollar C was best positioned even though all the dollars are the same. Maybe it looked new, it was crisp, it looked fresh & clean or whatever.
In the second example, the better positioned dollar is Dollar B. Even though it has some black marks, it is still nicer than Dollar A.
The question here is what had to happen before Dollar B became the best positioned dollar? Dollar C had to become unavailable!
Ok, now what happens when only Dollar A is presented?
That's easy...you'll take it. Sure, you'll notice the poor condition but it's still a dollar and it's the only one available.
When it comes to selling property it's not much different.
Let's say we have just finished looking at our tenth home. By default, one property will be viewed as the best, one the worst and the remaining somewhere in between.
If you had to make a decision today, which one would you buy? Well, the one you liked the best. If you weren't able to buy the first one then you'd buy the second. If you couldn't buy the second one you'd buy the third...and so on.
The point is, buyers look at many homes and only pick the one they like the best and it's usually decided on three factors - price, condition and location.
Is your home in the best position based on price, condition and location from a buyer's point of view?
NO!
Otherwise, you'd have already sold.
FINDING YOUR POSITION
By now you might have a breif understanding about positioning and that you're property isn't positioned properly.
So how do you find out what position you're in and what do you have to do differently to become first? Simple! Answer the following questions and provide me with the results. To print the questions click here.
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What is your current or most recent MLS number?
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How many total homes have sold in your subdivision in the last 6 months and 12 months respectively (regardless of type or style)?
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How many homes (in your approx price range) have sold in your town or city over the last 6 months and 12 months respectively (regardless of type or style)?
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How many homes are selling per month on average?
(This can be figured by calculating the number of homes sold divided by the amount of months. For example if 10 homes sold in the last six months homes it would be 10 ÷ 6 = 1.66. Homes are selling at a rate of 1.66 per month.)
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How many total homes (in your approx price range) are active in your subdivision (regardless of type or style)?
- How many total homes (in your approx price range) are active in your town or city (regardless of type or style)?
- How many months worth of inventory is on the market?
(This is figured by taking how many homes are currently for sale divided by how many homes are selling per month (answer #4). For example, if there are currently 15 homes on the market and they are selling at a rate of 1.66 per month then it's 15 ÷ 1.66 = 9.03 months worth of inventory on the market.)
- Of all of the active homes (properties you're competing with) in both your subdivision and town or city, how many have you physically been inside? (Selling 101...you MUST know what you're competing with. If you have't been inside ALL of the competing homes schedule an appointment to get inside. It only takes a few minutes get what's needed.)
Yes, there's a lot of information and some legwork but it's all neccessary. Once I review the information and ask a few questions we'll look at the MLS together. With the information supplied to me from the questionnaire and your knowledge of the competition you've viewed first hand, it's a simple matter of deductive reasoning.
Basically, we'll compare your price, condition and location to that of your competition.
When comparing positions we have to answer a question, "If a reasonable buyer looked at your property and another property, which one would they buy based on price, condition and location?".
If we find that a reasonable buyer would buy another home then adjustments need to be made. Since we can't change the location the only remaning options are price and condition.
In this current buyer's market it might not make sense to spend money on a depreciating asset. It's much easier and practical to lower the price. Of course, if it makes more financial sence to improve the condition then this would be the best adjustment.
Once adjustments are made to the condition or price and there isn't another home on the market that a reasonable buyer would choose then you are now in the best position to sell.
LET US HELP
For further help in determining and correcting your market position be sure to contact us today and get your home sold.
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