Spring is the traditional peak sales season for houses andcondos. Summer is also usually very good until the traditional August slump,especially for families who want to relocate before school starts. Moreprospective home buyers are in the market at this time of the year than duringany other season.
But 2006 is proving to be a bit different. Although 2005 wasa record home sales volume year, the number of residence sales has slowed thisyear. There could be several reasons, such as adverse weather in many areas andslowly rising mortgage interest rates. In a few communities home sales priceshave taken a slight dip so prospective buyers might be waiting to see ifdesperate home sellers reduce their asking prices. Another reason for waitingto buy a house or condo is the inventory of available listings is slowlyrising, thus offering more homes available for sale. In summary, for mostcommunities it is definitely a “buyer’s market.” That means there aremore homes listed for sale than there are qualified home buyers. The result canbe bargain prices for savvy home buyers.
Purchase Bob Bruss reports online.
TOP FIVE REASONS SOME HOMES DON’T SELL.
If your house or condo is listed for sale with a successfulrealty agent in your vicinity, there are five key reasons your home might notsell although nearby comparable residences are selling:
1. THE ASKING PRICE IS TOO HIGH. By far,this is the top reason a home doesn’t sell. Although you might be just testingthe market, prospective home buyers are very smart and they know an overpricedlisting when they see it. Worse, their buyer’s agents won’t even bother showinghomes with asking prices above recent sales prices of comparable nearby homes.
For this reason, if you want to get your home sold duringthis peak sales season, it is vital for your listing agent to keep you informedon a weekly basis of recent comparable home sales prices. Perhaps it’s time foran asking price reduction.
To illustrate, I was recently in Minneapolis. On my drivesaround the city and its suburbs, I was amazed at the considerable number of”price reduced” hangers on home-for-sale signs. That shows motivatedhome sellers (and their listing agents) are becoming more realistic.
2. THE LISTING AGENT DOESN’T MAKE THE HOME EASY TO SHOW. Wellover 50 percent of home sales involve a listing agent and a buyer’s agent. Ifthe listing agent makes it difficult to show a home, such as requiring thelisting agent be present for all showings, this discourages buyer’s agents.
Unless there is a security reason, listed homes shouldalways have a multiple listing service (MLS) lockbox key easily available forbuyers’ agent showings on short notice. As an investor, I’ve often bought ahouse with for sale signs I saw on the way to inspect another house. Lock boxesare especially important for buyer’s agents with out-of-town transferees whohave a short time available to inspect homes for purchase.
A related problem can be the listing agent wants to”double end” the home sale by getting both the listing portion andthe selling portion of the sales commission.
Although rare, some listing agents refuse to put theirlistings into the local MLS, thus preventing showings by buyer’s agents. Orthey might not put their listings on the Internet at
3. CONDITION OF THE HOME. Most home buyers want topurchase a residence in near “model home” condition where all theyhave to do is turn the key in the front door and move in. However, if theresidence requires considerable work, that turns off all but the most die-hardbargain hunting home buyers.
Fixer-upper homes appeal to a very limited market of homebuyers. Sometimes known as “bottom fishers,” they will purchase suchhomes only at bargain prices, well below what can be obtained with modestfix-up work such as painting (the most profitable improvement of all),repairing, and cleaning.
Word quickly spreads among local real estate agents when ahome “doesn’t show well.” Buyers’ agents will only show thatresidence to their bargain hunters, usually investors, who want to purchase farbelow market value.
4. “AS IS” HOME SALE CAN BE A RED FLAG TURN-OFF. Closelyrelated to homes that don’t show well are those listed for sale in “as is”condition. The term “as is” means the seller offers the residence inits current condition and will not pay for any repairs. However, the sellermust still disclose in writing to buyers all known defects, such as a leakyroof or a bad foundation.
Personally, I’ve bought many “as is” houses atbargain prices. But I always include in my purchase offer a contingency clausefor my professional inspection approval. If I don’t approve the written reportof my inspector, then I can cancel the purchase and get my good faith depositrefunded.
Whenever possible, home sellers should not offer their homesfor sale “as is” because it is like waving a red flag in the buyer’sface. A better alternative is for the seller to obtain a professionalinspection report and have the recommended repairs made before listing the homefor sale.
Of course, when a home needs a major repair that the sellereither can’t afford or doesn’t want to make, then an “as is” sale ata reduced price is advisable.
5. INEFFECTIVE MARKETING METHODS. Intoday’s home “buyer’s market” in most communities, listing agents anddo-it-yourself “for sale by owner” home sellers must use everymarketing resource available. Most effective is the for sale sign on the frontlawn. A close second is weekly newspaper advertising, especially for a weekendopen house. In third place is Internet advertising, especially at
In addition, listing agents have the local MLS and theirspecial networking among agents who represent prospective buyers for the typeof house or condo listed for sale. The local Association of Realtors is anespecially effective resource to spread the word about a desirable home listedfor sale. A key part of this sales technique is the “broker’s tour”where only local agents are allowed to inspect a home for possible latershowing to their buyers.
The best listing agents also use additional marketingmethods, especially for their more expensive listings, such as color brochuresand postcards mailed to nearby homeowners who may have friends who want to moveto the area. Very expensive homes warrant the listing agent spending “bigbucks” advertising residences in real estate magazine ads and offeringInternet virtual tours.
CONCLUSION: Selling houses and condos in thecurrent buyer’s market requires hard work by successful listing agents. If yourhome has been listed for sale with a successful realty agent over 45 days andwithout any purchase offers, it’s time to discuss the five key reasons somehomes don’t sell with the listing agent and make adjustments to get your homesold.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
Copyright 2006 Inman News