This September brought an early sign of what is to come in a few weeks, the onset of the dormant real estate market. The cold weather, snow, and the busy holiday schedules make both the sellers and buyers focus on other priorities. For those who did not succeed in selling their house this summer, it is a good time to sit down and determine why their sale failed.
1. Price: A correctly priced house will sell regardless of its condition, location, or market fluctuations. Sounds easy, yet the appraisers charge good money to be the experts in property valuations. For Realtors, advising on a listing price is an exercise in diplomacy between the sellers’ desire for highest possible price and the reality of hard figures of recent sales of comparable properties in the neighborhood, the condition of the property, the desirability of the area, and the competition at the time of sale. In order to sell, a house needs to pass the scrutinizing eyes of the buyers and present an adequate value to price ratio. Balancing out all the variables is like fine tuning the tipping point of getting the best possible price, or leaving money on the table. That said, the main culprit of failed sales is overpricing. Or as the real estates agents say it: price fixes everything.
2. Property condition: It is not a new notion that property condition, staging and curb appeal are major qualifiers on buyers’ shopping list. Given a choice, buyers always go for the property that is move-in ready and does not need any additional work. Putting a house on a market that has not been prepared the best it can is akin to going out on a date without changing into your best. The chances of making an impression or a lasting relationship decrease dramatically.
Some items that need special attention are safety issues or roof condition. Lending programs such as VA, RD, FHA , which are most widely used by first-time home buyers, will not lend on homes with such defects, thus narrowing the buyer pool and decreasing the chance for good offers. If not willing to invest in preparing the house for the sale, make an adjustment in asking price upfront, or expect to lower the price, as the buyers will bypass the property.
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3. Buyer expectations: Houses are a commodity and knowing what is in demand will take it ahead of the curve. A dated property, or the one has not gone through updates in finishes, or kitchen and bath remodeling will not do well in competing on the market. The original kitchen may be in mint condition and owners may love it just the way it is, but the buyers may disagree. The lovers of mid-century charm are few and far between. While addressing the updates, consider modernizing the floor plan. Open areas and master suites have become standard expectations.
4. Marketing: Plunking a For Sale sign is not marketing. The majority of buyers are online buyers. Reaching those buyers with professional photography and catchy captioning is step number one. Converting them to actual people on the doorstep with open houses and direct marketing is step two. Regardless of the marketing efforts, a property that has not taken the three points from above into the account will not sell well. Buyers do not care how big the advertising billboard is. Or who is the listing agent. Good marketing will bring the property to buyers’ attention. A correctly priced property will get good offers.
Getting feedback from other real estate agents and potential buyers should be a clue to the reasons of a failed sale. It is common to blame the listing agent and to hire a new one, just to continue with the same failed tactic. Given enough time, market prices may rise and catch up with the asking price and the house will sell, or the seller will need to adjust the price. A proactive approach to a sale will be a less stressful and a more satisfactory experience. And that is worth something too.
Alex Ceaicovschi is a Realtor who works locally with Elkhorn Mountain Realty and can be reached at Alex@elkhornmt.com.