Your House Didn’t Sell – Now What?
“… The first thing to do is take a step back and analyze the situation…”
You put your home up for sale and it simply didn’t sell. Undoubtedly, this has created a lot of stress, inconvenience and anxiety for you and your family. Perhaps you already bought another home. Maybe you needed this home sold because of a job change. Regardless of the reason, it’s certainly a burden! What Should You Do?
The first thing to do is to take a step back and analyze the situation. Try to assess what factors led to your home not selling. Below are the top four reasons why homes tend to languish on the market:
Is The Property Overpriced?
Overpricing your property is usually the number one reason it did not sell. Assuming your neighborhood or area has homes with similar features (number of bedrooms and baths, lot size, etc.) on the market for a lower price, buyers will naturally buy those properties first. The price of your property should be competitively priced with these other homes. That means if you want to sell your home, price the home at or slightly below the comparables. Your real estate agent will help you establish the best price based on the competition. Again, pricing your property above comparable properties can easily cause it to languish.
Another problem with pricing higher than competitive properties is the price reductions. Most homeowners will reduce the price once they realize their home is priced higher than the competition. When your real estate agent enters the price reduction in the MLS® System, the property is probably at or near where it should have been priced in the first place. The problem now is you missed a lot of the buyers the first round that bought comparable homes for the same price you have just reduced your home to.
To overcome this situation, you are going to have to make sure your new, reduced price is extremely competitive. If your price reduction still leaves the asking price of your home higher than any comparables, your home will probably continue to languish. Your real estate agent will help you assess the competition and help you establish an asking price that will get the home sold.
Condition Of The Property
All of the cosmetic things, such as paint, landscaping, window coverings and flooring should be in good shape. The house should be spotlessly clean inside and out! It’s amazing how most buyers refuse to see “through” superficial, cosmetic shortcomings. To illustrate this point, most buyers can walk into a “perfect” home that is priced below market. However, if the house is cluttered, the carpet is worn, or the house has a strong pet odor, they move on to look at the next house. And making these cosmetic improvements costs little… mostly your time! To get the house sold, make a small investment in:
- Landscaping: Make sure lawn is in good shape and trees and shrubs neat and trimmed. Make sure gutters are clear. If you don’t have the time to do it, pay someone.
- Exterior of home: Make sure there is no chipping paint, dirty windows, or clutter in the yard. Most importantly, remember that most buyers will notice the condition of the front door when they walk in.
- Interior: Make sure the carpets are clean and attractive, the walls painted (if it needs it) and clean (no smudges!), the kitchen clutter-free and the windows are spotless. Also, remove excess furniture (rule of thumb is put half the furniture in storage or the basement). Excess furniture makes rooms appear much smaller. Make sure all clothes are off the floor and organized in closets. And finally, make sure the smell of the home is appealing. Vanilla scent works very well with most buyers.
Was Your Property Aggressively Marketed?
Another primary reason for homes languishing on the market is a simple lack of exposure. In a very hot market, a listing in on realtor.ca alone should generate an adequate number of buyers. However, if your market is anything less than red-hot, the amount of inventory will increase and your home needs aggressive marketing.
Most buyers work with real estate agents. A good real estate agent will make sure your property is exposed to the active real estate agents in your areas by presenting your property to many of the area offices. Also, most active real estate agents have a strong network of other agents, and they’re usually on the phone pushing the property to the other agent’s buyers.
Well over 80% of buyers use the Internet to look for homes so make sure your agent also has a marketing plan to get it exposed on-line.
Finally, and Most Importantly, Did You Hire The “Right” Real Estate Agent?
Like any profession, there are very effective and ineffective agents. Many agents work hard and employ strong marketing techniques. Many agents have a strong network and access to buyers. Many agents work hard to get your home sold. However, many do not. Did your agent simply place the house in the Multiple Listing Service? Ask yourself, was your agent passionate about selling your property? If not, now is the time to find the agent who will get your home sold.
Why It Is So Important That Your Home Is Correctly Priced and Marketed Properly
“… Your home is your castle–even when it’s for sale…”
Let’s say your terms are competitive: your timing’s clearly set. Now, what about your asking price? Without question, price is your most important sales tool. Here’s why:
The period of best opportunity for selling a home at a reasonable price is the first four weeks after it is put on the market. Buyers who have seen most available listings are waiting for just the right house to come on the market. If your house is priced right from the beginning, you are in the best position to attract the maximum number of buyers able to pay the price your home is worth – and to sell your home within your timetable.
- If your house is under priced, you may be swamped with lookers and perhaps get many offers. But you could lose thousands on one of your family’s largest investments.
- If your house is overpriced, lookers are apt to be few and far between, with little chance of any offers to pay your unrealistic price. You may lower your price later, but by that time you will have missed many of the most interested buyers.
How do you Set the Right Price?
Arriving at an asking price involves up-to-the-minute research and experienced judgment. Besides enlisting my help in checking out the current real estate market conditions the basic steps include:
- Measuring your home against similar neighborhood homes that have recently been sold or are currently on the market.
- Determine what features make your house stand out among others currently on the market. After all, buyers are comparison shoppers. Weighing the spending of a reasonable amount of money on cosmetic fix-ups that might enhance the marketability of your house and earn the highest possible sale price.
The right price is usually within 5% of market value (a constantly changing factor) and usually results in a fair-dollar sale within a reasonable amount of time. As we say, “price sells.”
Why is overpricing risky?
A price more than 5% over market value may have these results:
- Buyers may resist inspecting your home because they can find better values elsewhere. (Overpriced houses tend to sell the competition first.)
- Potential buyers who can’t afford the price don’t bother to look–or to make offers.
- A buyer willing to pay an over market price may have difficulty getting financing. Lenders may not approve a loan if the appraisal is lower than the contract price. (The delay from a failed sale can mean missing out on the critical first 30-day marketing period.)
- Your unsold home will begin to get “stale,” as the marketplace assumes there is “something wrong” with the house.
- To make up for lost time you might be inclined to lower the price below competing houses in order to move it.
Is it Ever Smart to Under Price?
Setting a price below market value usually isn’t preferable because you may be losing money. If time is more important than money and you need a faster-than-average sale, you may consider setting a bargain price to attract the greatest number of prospects. Market value delivers the optimum number of prospects at the best price for a quick sale.
When you’re ready to sell your home, take advantage of my real estate expertise to help you price your home to sell.
How a Market Analysis Helps Price it Right
Only a professional market analysis can give you the accurate, reliable foundation you need to price your home right. When you ask me to make a fair-market analysis of your home, here is what I do:
- Evaluate your home’s location and lot size; your home’s age, size and condition; the number of bedrooms, baths, total rooms; the kinds of extra feature you have (such as improvements, built-ins, garage, tool shed, spa).
- Examine the condition and appearance of your homes exterior and interior. I can help you determine what repairs or refurbishing may be needed to sell your home at its best price.
- Review the assessed value of your home, its previous sale prices, your maintenance and utility costs and your local taxes.
- Compare your home with similar area properties currently for sale or recently sold.
- Note current real estate market conditions with a practiced eye; also current interests rates and lenders’ criteria.
When Smaller is Sweeter – How to Take the Money and Run
Your house is quiet except for the hum of the refrigerator or the voices from the TV. The rooms are filled with pictures and memories, but the children have grown and gone. You spend hours each week cleaning rooms you never use. Are you an “empty-nester” who needs a house for the future? Is it time to downsize or to move into another home more suitable for your retirement years? Here are some tell tale signs:
- Your current home is too large for your lifestyle. Rather than close off the extra rooms or rent out the excess space, you may opt to move to a smaller home.
- You are retired and your income is lower than it was during your prime working years. You may want or need to sell your current hoe and move to one with a smaller mortgage payment or less upkeep. Maybe you could live more comfortably in a lower cost-of-living area. If you have loaded up a home equity loan, selling the home could give you welcome cash to eliminate those payments.
- As you approach your golden years, your wish is to have a home with hew, if any, stairs, or one which could easily converted to be handicap-accessible if the need arises.
- You prefer a location where the weather is more to your year-round liking and where there are activities you like – golf, tennis, boating, or socializing with seniors – during your leisure time.
- There is no capital gains tax on the sale of your principal residence. The profit on the sale of your home is tax free, which can provide you with an additional nest egg amount to use for your pleasure and leisure.
Getting it Sold
Once you have decided to sell and move, take a critical look at your current home. Even the best-maintained homes begin to show age.
Before you list your home for sale, be sure it’s in “move-in” condition. Make needed repairs and replacements so the house will show at its best.
Remember, homes that sell fastest and for top dollar show like a model home and are merchandised like a model, too. How does your home compare with other homes for sale, including new homes? Do you want to undergo major renovations, or would you prefer to make price concessions to help your home compete?
Here are some specific questions to ask yourself:
- Are kitchen appliances up to date and in good working order? Does the kitchen have popular features like a microwave, or and island?
- Up-to-date homes often have a master bedroom suite. Does yours? Does the master bathroom have a spa or soaking tub or dual-shower heads?
- Do you have a home office? Is telephone wiring adequate to support an office phone, computer modem, fax machine?
- Have you built any additions – a deck, patio, carport, sunroom – without first obtaining a building permit or without passing inspection?
- Do carpets and tile need to be replaced? Will a professional cleaning make them look like new?
- What do the walls look like? Do they suffer from puppy-bite or kitty-scratch? Should old, tired wallpaper be removed? Do walls and woodwork need repainting?
- Can you make closets and counters look larger? Are there items you can pack away and do without until after you move?
- Are shrubs and trees neat and does the yard look well kept and attractive?
- How does your home compare to others currently for sale now? What can you do to make it say, “Buy me!”
Price is one answer. If you’ve owned your home for years, chances are good you’ve got some serious equity. Perhaps you can afford to be flexible on price in order to get it sold. After all, to get the best possible sale today, a house must be in tip-top condition in every way: price, condition, terms and exposure. That’s where we come in. Give us a call.
How You Know it’s Time to Move
Reason #10: When you first bought the house, you were out in the country, but now that same house is part of the city scene.
Reason #9: You can’t get anything repaired because “they stopped making those parts years ago.”
Reason #8: The swing set out in the backyard has grown roots.
Reason #7: The plumber’s phone number is on your speed dial.
Reason #6: You’re on a first-name basis with the handyman.
Reason #5: The children’s rooms have all been turned into guest bedrooms.
Reason #4: The newspaper lining the guest room dresser is dated July 4th, 1976.
Reason #3: You have to move the furniture to see the carpet’s original colour.
Reason #2: You can’t do anything to the exterior of your home without getting approval from the “Board of Historic Places”.
Reason #1: You haven’t visited half the house in the last six months.