Why do some houses sit on the market for months at a time? And why isn’t your house selling? In our latest post, we will help you to understand some reasons why your house isn’t selling, and what you can do about it!
Selling any home takes a lot of work. Whether it’s a Sellers Market, Buyers Market… it doesn’t matter. Selling a beautiful, well priced house is challenging enough when you consider there will be inspections, repairs, appraisals, buyers demands and contingencies. But when your house is challenged in some way or needs a lot of repairs and not up to the “market standards”, your approach to your pricing and your target market better be spot on otherwise get ready to wait a long time without any offers.
What Does “Market Standards” Mean?
Today’s buyers want value and houses that are move in ready. Sellers need to be realistic about their houses condition and know that if it needs a lot of repairs, has location challenges or faces some other issues, that will cause buyers to pass. It’s ok that seller’s have preconceived opinions and expectations (realistic or not) about what their houses are worth, it is not ok for those expectations to be fanned by the very professionals that they hire to help them understand their options. It is a common approach by inexperienced agents that would rather sign up a new listing than deal with the unrealistic expectations of the seller. Real estate agents make their living listing houses and collecting commissions after they sell. The sellers pay both sides of the commission and every other cost along that journey. The product is the house and if the house itself is not up to “market standards”, (what the market’s buyers are looking for) then that house will be rejected.
It is just a fact… In today’s world, 95% of buyers want move in ready. That does not mean a fixer upper. I think that we can agree, that the way to market a fixer upper is NOT to market the house to the 98% of the buyers that want move in ready and yet that is what happens all of the time. You would think that in 2019 with all of the advances in technology that real estate agents could be a bit more selective and targeted in their marketing and yet these houses become the logjams in the real estate agents Multiple listing Service until they fall by the wayside as an expired listing 6 months later.
The truth is… all any homeowner wants to do is to sell. And when represented by a real estate agent, they wanted their hired gun to be honest with them and give them the straight scoop on their specific pricing and marketing alternatives for their house.
Real Estate Agents By the Numbers in Sacramento?
People are big on conventional wisdom. It keeps most people out of trouble and gives them at least a semblance of a plan. The problem in real estate is that the conventional wisdom is wholly manufactured by Realtors and their Brokers (great marketing) that a one size fits all approach will work for all houses. But the nasty little secret is that it only works for the top 60% of the market. That is a problem for the other 40% that think a real estate agent is going to provide them with a sale.
So even though all houses are NOT created equal, most homeowners at the bottom 40% of the market dont necessarily understand or believe that it’s their house that has a big a problem. It’s generally when their house just sits that they begin to understand that their real estate agent could have been a little more honest and assertive with them about the pricing. But most homeowners of these houses were part of the problem as well. Nearly 78% of all sellers hire the very first real estate agent that they talk to. Sometimes, sight unseen, others with just one interview and others use friends and family.
Maybe they wouldn’t be so generous with their hard earned equity if they really understood the numbers. I know the real estate agent numbers because I buy and sell a lot of houses and I make my living by knowing who the best is. I have done the research and the numbers scare me. According to the National Association of Realtors 2018 Member Report, there are 1.3 million Realtors in the United States. Of those, 20% of them, 260,000 reside in California and nearly 52,000 of them are within their first year as a real estate agent. Of those agents, 87% will wash out within the first 5 years?
It means that sellers need to do a better job at both screening and hiring.
So, how can the average homeowner decipher all of this and make sure that they hire the very best real estate agent? By doing their homework. By far, hiring the right real estate agent is the hardest part of selling a house. But hiring the right team to get the job done is the best approach and will get the best result.
As the Seller, You Need to Take Control.
You need to be the conductor of your own train if you are going to arrive where you intend to go. Don’t you think that before you hire someone to sell what is arguably your largest asset, you should at least understand the criteria that will allow that plan to succeed. The truth is it’s all about the marketing and your house. The marketing will get the people in the door. The house will sell the buyers. If you understand that then your next job is to understand how you can continue as the seller to influence that process towards selling and closing.
Let this sink in your House, its location, its age, the amenities and its condition that will drive the price and dictate the marketing strategy. Whether or not you use a real estate agent is entirely up to you but the statistics are clear… if you do hire an agent and they do not understand your target buyer you will spend 13% more than if you just sold your house on your own.
Do I even Need a Real Estate Agent?
That really depends on your house and how you want to sell it. If it’s the prettiest house on the block, many would argue that you’ll be able to charge more and can absorb the cost of the commissions into the house with a higher price. I am not so sure about that and my research confirms that it might not be true.
The question then becomes “for my individual home, does the use of an agent lead to a significantly higher sale price?” A 2009 study by researchers at the University of Wisconsin found that “After controlling for house and seller heterogeneity, we find no support for the hypothesis that listing with a realtor and appearance on the MLS delivers a higher sale price (before subtracting commissions) than the FSBO transactions.”
In other words, using a real estate agent will not increase the sale price of a home. A study by Stanford University researchers Douglas Bernheim & Jonathan Meer agrees: “We find no evidence that the use of an agent significantly affects either the selling price or the initial asking price,” they wrote, “though it does lead to a more rapid sale.” The researchers studied a neighborhood of Palo Alto controlled by Stanford University. Despite homes with an agent selling faster, they weren’t sure if that justified the price:
Why do some homes sell right away?
This shouldn’t be a mystery at all. These houses are the creme de la creme and they are always the first to sell. They are inspection and appraisal ready and fly through the approval process. There are these houses at every price point in every neighborhood that just jump out and scream their quality. The marketing for these houses is is very easy with very few surprises and when they hit the market the activity goes viral. Their maintenance records are impeccable and the owners spend thousands of dollars on them year in and year out. Yes, even mediocre real estate agents with very little marketing experience tend to get these houses into escrow.
By now everyone knows that not all houses are created equal. We also know that not all houses are cared for in the same manner. Some have deferred maintenance and others are pampered any time anything goes wrong. From one end of the spectrum to the other these houses have completely different profiles and quite frankly buyer.
As the seller it is your responsibility to be honest about your house, its condition, its location, its amenities and its price. It is up to you to make sure that it is competitive with the other houses at the same price points in the neighborhood. There really is no room for cheating here because the inspections and or the appraisals will ferret that out. Your job is to be honest and if your house is not up to the task, then you need to address those issues and then you can answer the question…
Why Isn’t My House Selling in Sacramento?
Is Your House Priced Too High?
So many people are quick to list a property, without really considering thow competitive there house is. They look around the neighborhood and rush to a price point without taking into consideration that the house around the corner with the similar floor plan was remodeled 18 months ago and has a new gourmet kitchen and a completely new master suite with expanded bathroom. I see it all of the time… the price and the profile dont match. Buyers walk in and quickly leave.
Pricing a house is an analysis of the market and what it can bear. If you take a guess at what it’s worth, you might get lucky and mark it up a bit for commissions and other costs. If only it were that easy. Before you list, run some comps for properties that have recently sold in your area. You might even consider having an appraisal done.
If you need to lower the price of your house then do so based on your analysis. It doesn’t matter that they can see that. Sometimes sellers price themselves outside the view of potential buyers by asking creating a price point over a certain threshold. If buyers are searching for houses between $250,00 and $299,00 then your house listed at $300,00 just became invisible.
Does Your House Look and Feel Clean?
No matter how cute you think your stuff is, it’s still YOUR stuff. How can someone imagine your extra bedroom as an office if there are your daughters teddy bears everywhere?
- Put away any personal items.
- Clear away paperwork from tables and desks.
- Take pictures down.
And while you’re at it, give it a thorough cleaning. To be blunt, your typical cleaning habits may not be on par with some of the people viewing your home. Now is the time to channel your inner neat freak.
Your House is the Product… Is it Competitive?
Do you know what you’re up against? Take a good look at properties for sale in your area. Know what your neighbors are asking for their homes, and what comparable houses have recently sold for. Do you know what amenities they have, whats in demand? I am not suggesting that you put in a pool but if every other house in the neighborhood has one than shouldn’t your price reflect the fact that yours does NOT? Check out listing sites, go by open houses and talk to the real estate agents that are there… Ask them what they would do. Invite them over to look and offer advice. Be honest. Tell them you are looking for ideas and not guaranteeing them a listing if the come. Call your local Title Company for any cash sales in the neighborhood…. Don’t look at what people are asking, look at what houses have actually SOLD for.
This is a BIG number here… 98% of all buyers want move in ready while nearly 20% would consider buying a house that needs work if there were substantial price reduction involved. That might sound like Great News, but point me to that lender that will finance that house because its called a conventional loan and requires 20% down and a higher interest rate or a hard money lender that charges between 10% and 15% interest and wants to know how your buyer is going to fix the house.
Honesty is key here. There are things you might have been overlooking for so long, that now they just seem normal. Get an outside opinion on what repairs should be made. Ask friends for candid opinions. Ask an agent or a real estate investor. Consider ordering a professional home inspection on your own. Fixing the things in need of repair will improve your selling opportunities, and lower your potential buyer’s wanting concessions.
Use Professional Photography.
People use the internet to shop for homes. In our opinion, nothing can destroy a listing faster than bad photography. On the flip side, professional photos can make your listing jump out to the buyers. Don’t settle for an agent who takes pictures of your home with their smartphone. Great photos will make or break your listing.
Did Your Your Agent Drop the Ball?
Some agents will do the bare minimum to market a house. Let’s be honest, the numbers bear this out. Most real estate agents background in Marketing is about as long at their sales training. Sure they can get a listing agreement but the stats say that 78% of all sellers sign a listing agreement with the first agent that they talk to. That is not a recipe for success, its a recipe for your house NOT selling.
What is sad is that most sellers believe they hired great representation and found out otherwise much later. To most real estate agents your house is subject to the whims of marketing and the universe. Your house is part of a larger numbers game and they rely on the buyers real estate agents to show their listing and to bring in the offers. It is an common practice today and a primary reason why the 40% of the houses at the bottom of the market are remain unsold.
Your Real Estate Agent Does Not Know that Sales and Marketing are Not the Same Thing!
Sales as a profession is universally misunderstood and often confused with marketing. In real estate, the confusion is common because in general there are just so many people that have never had any formal training in either. As a result, many real estate agents actually believe that they are sales people.
The truth is, it’s the marketing that gets buyers to call and the Open Houses to be full. The selling is what happens at closing when the Buyer receives the Deed and the Seller receives the cash. In an industry where approximately 87% of all real estate agents wash out in the first five years, it’s no wonder the misunderstanding is there.
There are so many weaknesses at the grassroots level that make it difficult to sell houses. So much so that I can assure you that unless you are hiring the best real estate agent in your market, you are not getting what you pay for. Most sellers believe that they were paying for great salespeople with pre approved buyers in their pockets and a marketing machine backed up by a billion dollar logo.
Let me be clear… if 40% of all listings expire before receiving an offer then what the bottom 40% of the market got was a listing agreement. A listing agreement is not a contract to sell a house. It is a contract to pay a commission when a house finally sells. It is also answers the question: Why Isn’t My House Selling in Sacramento?
Who said finding the best real estate agent was easy?
Here is the takeaway… the very minute that the “Listing” goes live and you plant the For Sale sign in the front yard it’s all about your house and the marketing. Besides all of your renovations, it is arguably the most important and time consuming part of the process to sell your house because it requires a lot of bodies to make it work. Did you select the right real estate agent?
A cold hard fact in real estate is that it’s impossible to review any buyer offers on a house that does not receive any offers. When that happens, you know that even in a sellers market, the marketing, the pricing and the value were not targeted to the right group of buyers or the message just never hit the spot. Peter Westbrook
The Alternative to a Real Estate Agent and Conventional Sale
My name is Peter Westbrook and I am a real estate Investor and a cash home buyer in Sacramento, Stockton, Manteca and Modesto. It should come as no surprise that not every house is going to get a fair shake on the market have the best representation or even going to get a top of market offer. The real estate industry has changed and it might be clear that there are many ways to cash out of your house.
We Buy Houses in Sacramento, Stockton and Modesto and if you are thinking about selling your house and it needs a lot of work, why not at least consider an all cash offer. We buy houses and we pay fair market value minus the cost of repairs and some holding cost. In a lot of cases the balance sheet is on our side especially if your goal is to spend the least amount of money while putting the most amount of your equity back in your pocket.
I admit that we may not be for everyone, but I would like to talk to you about how we do business and how we can help you. While no one can promise that they will buy your house sight unseen for whatever amount that you want, we will sit down and make a fair cash offer that will in most cases exceed what you can get if you chased the market conventionally. No Commissions, no frustrating meeting with real estate agents, no marketing, no cleaning, no fixes, inspections, no appraisals and no contingencies.
Give me a call at (209)481-7780. What have you got to lose, you may just find out that selling directly to us is your best alternative. In either case you will be get a better picture of your options, understand your houses worth and be able to make more informed decision. We’d love to earn your business.