House Still Not Sold? Common Home Buyer Complaints
The first two weeks of any new listing are critical. It’s during those two weeks that you will be given a clear indication of just how attractive your home and your pricing is in today’s current market.
Lots of activity (7-10 showings) is an indication that your location is attractive, there are plenty of buyers looking for a house like yours.
Lots of activity but no offers made is another indication that although your location and the type of house is attractive, you’re pricing may be at issue or there’s something about the property that is putting buyers off.
Low activity (1-6 showings) typically means there are issues that need to be addressed. They could be…
- pricing is not competitive enough to draw in buyers
- location (which you really can’t do much about)
- the condition of the property compared to others
Getting your pricing right from the start is so critical because it sets the stage for your future negotiations. Pricing too high places you at a disadvantage. Kind of like shooting yourself in the foot because at some point, you’ll have to make a change. Stubbornly holding out on a high price is foolishness.
What Drives The Real Estate Market?
The real estate market ebbs and flows. Sometimes its a buyers market and other times it’s a seller’s market. What drives these changes? A number of things such as the economy. When the economy is doing well, people have good-paying jobs, IRA’s are growing, etc. That leads to more people looking to buy a new home or upgrade to a larger home.
Low-interest rates is a very good driver in real estate. New home buyers are eager to lock in their rate now while it lasts. These young homeowners are often unaware of the 18% -24% interest rates their parents and grandparents were paying for their first home. When I mention it to them they usually give me the “stunned deer in headlights” look. They can’t believe homebuyers were paying such outrageously high rates in the 1970s.
Another big factor is inventory. Over the past three years, housing inventory for sale has been far below normal levels. 2017 was crazy! Real estate brokers were struggling with inventory levels at half the normal rate. Normal inventory is six or more months worth of homes for sale. New construction was not keeping pace and as such, was unable to fill the gap.
It was during that time and into 2018 in southeast Michigan, that I saw homes sell in 24 hrs for more than the list price. I’m not kidding! It was incredible. Nearly every listing within the $150-$300K range received multiple offers.
Homeowners were emboldened to ask for top dollar and they often got it. The rate of home appreciation was climbing faster than normal as a result of the high demand.
As of late 2018, things have slowed down considerably now. There are more houses on the market now although still slightly below normal. Home prices are beginning to level off now and the rate of home appreciation has slowed down a bit and seems to be holding steady at around 5%.
While the starter home market was hot, hot, hot, the luxury home market was in a big slump. These beauties just sat on the market month after month with little activity.
Sitting or Selling, The Choice Is Yours
Your list price will determine how long your property will take to sell. The longer it sits on the market, the less likely you will find a buyer willing to pay full price. Price reductions will inevitably follow until you find the “sweet spot” and a buyer steps forward.
“The buyer has to perceive the value to be there. If not, no offers. How do you stand up to the comparables in the neighborhood? Be honest in your assessment, because vanity or pride could be costing you money,” –Beverley Hourlier, Realtop Chateau San Diego
When determining a list price I run what’s known as a “market analysis” through the Multiple Listing System that only Realtors have access to. It’s where Realtors in a given region are required to input all of their listing information.
Think of it as a central database. There are strict requirements we have to follow as well. Realtors pay quarterly membership fees to gain and maintain access to all this data.
Conducting a market analysis gives me the data to determine the best price point for your home by taking into account similar homes nearby, what they sold for, which ones didn’t sell and which ones are now under contract and at what price.
Ask your Realtor to run another market analysis before you decide on a price adjustment so that your new price is closer to the mark and you’re not wasting any more time. Which homes have sold nearby since you listed your property for sale and at what price? How long were they on the market?
A common mistake homeowners make in determining list price is to assume that the house down the street sold at full price. Unless, you know them personally, basing your price on someone else’s list price is not the best idea.
Back in 2016-2017 chances were high that the property sold at or very close to list price. But that’s no longer the case today because the market is softening now as we shift from a seller’s market to a buyer’s market.
Although list prices in a given neighborhood may be similar, the public is mostly unaware of the sold price. It’s not until after the property has changed hands and the new neighbors moved in that the sold price is revealed on the Multiple Listing System. So if the home is marked as “Pending” meaning it’s under contract and waiting to close, there’s no clear indication of a sold price.
What Are Homebuyers Saying?
With each home showing, your Realtor should be asking for buyer and Realtor feedback. You’ll want to look for a pattern of common possible issues that homebuyers are noticing. By the end of your first two weeks on the market, you should have at least 10 showings. That’s enough to uncover a pattern of issues you may need to address.
Most issues can be addressed one way or the other. However, issues such as location and square footage can only be addressed one way…lower your price.
Think about it, homebuyers today are far pickier than they used to be. Are there other homes in better locations within your community and/or a 5-mile radius that are offering more space at the same price point?
Common issues and buyer complaints are:
- Floors need repair.
- The rooms are too dark.
- Old outdated lighting.
- Rugs need to be replaced.
- Walls and trim need to be freshened up.
- Rooms look too small (too much furniture?).
- Windows have lost their seals (buyers won’t deal with it).
- Unpleasant odors (litter box, pet hair, cigarettes, curry spices)
- Needs too many repairs.
- Colors are too bright (reds, yellows, oranges) or too dark.
- Evidence of water issues on the ceiling and/or wall.
- Basements are damp and musty.
- Missing closet doors.
- The home’s exterior needs some work.
- The driveway is cracked and broken.
Unless you have some fantastic feature, chances are you won’t be able to compete with them. Your ideal pricing is to offer the best value among your competition. That’s when you will sell.
Flash In The Pan
Often times, new homes listed for sale will have lots of showings right away then they quickly die down to a trickle. This is another red flag that an adjustment is in order.
It generally means that your neighborhood is attractive to homebuyers, which is positive. However, there is something else that’s turning them off.
Did you know that homebuyers on average will look at 10-15 homes before making a decision? Therefore, your home is constantly competing with 9-15 other homes in the area just like yours. What makes your house stand out from the rest?
If newer listings in your neighborhood are selling before yours, it’s a good indication your pricing is not competitive enough. Keep in mind that consumers buy based on perceived value for the money.
We do this all the time. When comparing product X with product Y we often will choose the one that offers some extra bonuses, right? What kind of bonuses do homeowners offer?
Some bonuses can include a 12-month homeowners warranty, updated appliances, new or newer roof or furnace, new carpets, fresh paint, etc. Something that takes the major worry off the buyer’s mind. Generally, it shows when a home has been well maintained and those are the ones that sell first every time.
How Is Your Realtor Marketing Your Property?
Being a Realtor is tough. You’ve got high overheads to contend with every month. Until a house is sold, there is no guarantee of income. So, it’s not hard to understand why many real estate agents stick to the same old methods of marketing a home for sale. It’s cheaper.
The same system of selling homes that were taught back in the ’70s is still being used today. Basically, it’s a linear system of marketing. Where you have five independent tools working separately rather than cohesively.
Since the explosion of the internet, marketing has taken on a whole new persona. That applies to real estate as well. All Multiple Listing Systems will syndicate listings to some public sites such as Zillow, Homes, Trulia and Realtor.com to name a few. So you get your listing showing up on these sites along with a few hundred others. What makes your house stand out?
The problem with real estate public search engines from a seller’s point of view is that your listing sits and waits for the buyer to find it. But what if you could push your listing out to where homebuyers are outside of those search engines?
A savvy Realtor who is up to date on today’s marketing tools will be able to accomplish that and keep you abreast of where your listing is showing up online.
I get my client’s listings showing up all over the internet such as HGTV, FORBES, MONEY MAGAZINE, DECOR, CSPAN, MSNBC and other news sites. Using cookies, your listing follows a potential buyer all over the internet, reminding them of your house for sale over and over again.
Real estate agents come from many different backgrounds. Some are teachers, former insurance brokers, sales, students and more. Few of them have any actual understanding of expertise in marketing. Those of who do, have far more tools in our toolbox and utilize them to push our client’s listings, ahead of the pack consistently.
If you’ve ever done any online home search, you’ll know that the newest listings are the ones that always show first. Therefore, you should also understand that the longer your house sits on the market, the lower and lower your listing will drop toward the bottom of search results.
First Impressions Count!
The houses that get the most showings and the quickest offers are the ones that make the best first impression online. How is that accomplished? In a word…photos. What else does a buyer have to judge it on? Your property photos have got to wow buyers and that requires professional photos. Now, to be honest, there are a few exceptions to this, but by and large professional photos are a must.
Don’t settle for cell phone pics! Make sure your Realtor is willing to pay for a professional photographer before the house goes on the market. It’s your home’s online debut and it must show impressively.
A good place to start is to make sure there is no clutter in any of the rooms to be photographed, replace your light bulbs so they are bright and clear your kitchen and bath countertops completely.
Pricing To Sell
A good buyer’s agent will pull comparable listings for their clients before making a purchase offer. If they determine your house is overpriced, their purchase price will be lower. Some homebuyers like to low ball their purchase offers knowing full well that the chances of your accepting it are slim anyway. That’s why I always encourage homeowners to always counter these type of offers. It gets the conversation started.
Take heart, you may not be too far off. Sometimes a small price adjustment is all that’s needed to motivate homebuyers to make an offer. Making a price adjustment shows homebuyers that you’re willing to negotiate which is a very positive sign. Homebuyers today are more well-informed about the market than in previous generations thanks to the internet.
I often encourage homeowners to go take a look at the competition and see how their house measures up. This isn’t always easy as we sometimes find it hard to be objective. Which is why I would encourage you to ask your real estate agent to go with you and ask as an unbiased observer. He/she should be able to point out some features about the property homebuyer’s are looking for that you would have otherwise glossed over or missed.
What’s It Costing You?
Almost half of the homeowners move out before listing their homes for sale. Sometimes it takes a little longer to sell vacant homes but I totally understand there are many valid reasons behind it. If you’re still unwilling to make a price adjustment, consider what it is costing you to sit on the market.
Are you now paying maintenance, taxes, mortgage and insurance on two properties? What other holding costs are adding to your monthly expenses? Be honest with yourself and make a list of all added expenses to the property while it’s on the market. It is always in your best interest to do all you can to sell sooner rather than stubbornly holding out for a certain amount.
Wrapping It Up
The best approach to pricing takes into consideration the condition of the property, location and any reasonable home improvements that can help you stand out from the crowd.
If you are thinking about listing your home within the Green Oak, Hamburg and Oakland counties in southeast Michigan, I’d welcome the opportunity to sit down with you over a cup of tea.
I’m available to answer all of your questions and offer up some suggestions and will put together a comparative market analysis that will show you the ideal price range to get it sold quicker.