John Adams
Q: I’ve had my home on the market for several months now, and we get plenty of lookers, but no offers. Our agent has tried open houses, agent luncheons and ads in the local paper. He even scheduled an open house on Saturday morning for the neighbors to come look.
I hear stories about how hot the market is, and was wondering why my house isn’t selling?
A: I suppose there are many reasons that might prevent a house from selling.
If you put all those reasons into categories, they pretty much seem to boil down to just three overall themes, so let’s review them here.
1. Condition of the building and grounds.
Mark my words — if the condition of the property is such that the buyer suspects a renovation will be needed prior to occupancy, your potential pool of purchasers drops dramatically.
I understand that you are aware of the worn-out carpets and that many windows are permanently painted shut. But in today’s market, buyers will pay a premium to get a home that doesn’t need lots of redecorating and repairs.
In contrast, buyers are shunning homes that will need a project, even my own.
I’ve heard sellers justify a poor condition by claiming that the buyer will get to choose their own color scheme. The truth is that most buyers would rather pay a slightly higher price and be able to move right in.
There is another downside to this sales strategy. The few buyers who are ready to make an offer know that demand is low for homes that need work, so they are more likely to make a lowball offer and see if you’ll take it.
2. Marketing
The dictionary defines marketing as the activities that are involved in making people aware of a company’s product, in this case, your house.
Suppose your home were newly built. Surely no potential buyer could object to that. And suppose you were willing to sell for just over half what it might truly be worth. How quickly will it sell?
Well, with a complete lack of buyers who are aware of the product (your house), an offer might never come to the table.
If no one knows it’s for sale, it’s extremely unlikely to draw any offer to purchase.
That’s why I typically advise those wishing to sell quickly to list their home with a full service agent. A good agent has in their toolkit a full suite of marketing ideas, each specifically designed to help spread the word about this particular home.
Finally, we come to the one reason that a house won’t sell that is lauded over and above the other two reasons.
3. It’s price.
This is where most people start, because it's so easy. But I believe it should be the last place a seller should tinker.
That’s because a seller should never be put in the position of negotiating.
Instead, the seller should say: “Frankly, we didn’t know how much to ask for our house, so we had it appraised. Here is a copy of the appraisal. We didn’t think it was fair to ask you to pay more for a home than it’s worth, and we’ve decided not to accept less.”
By handing out appraisals, you retain a position of strength and reason, not emotion and defensiveness.
My advice is to have your home appraised by a Senior Residential Appraiser and hope for a number you can live with. Remember that even if you COULD sell your home for more than it will appraise for, you’ll never get the purchase closed because the buyer won’t be approved for the loan. As we all know, loan approval is contingent on full price appraisal.
So these three remain: condition, marketing and price. And the last place to adjust when your home won’t sell is price.
Make sure your home is in excellent condition. Make sure your agent is marketing the home properly, both locally and nationally. And offer the house at a price you can justify.
If you’ll do these things, I believe your house will draw reasonable offers from reasonable buyers.
