TOP 7 REASONS WHY

YOUR HOME MAY NOT BE SELLING

by Rick Fortson

There are a number of reasons for why your home may not be selling.  The SEVEN MOST IMPORTANT and likely explanations are as follows.

1) LOCATION: As the old saying goes, Location, Location, Location is the number one most important consideration when buying a home. A home may suffer from what is known as External Obsolescence.  This is defined as a Negative External Influence on a home's value that creates a Buyer's Resistance to a property. Examples of this are: Busy streets, Electrical Power lines, Water Towers, Lakes & Ponds, Viewing Commercial property, Railroad Tracks, etc.

The ONLY way to overcome these incurable influences is to reduce your listing price in order to reflect the negative influences to value!   In other words, you need to make the market aware that you too are aware of the negatives, and that you've adjusted your price accordingly.

However, the problem remains, that no matter how much you lower your price to reflect the negatives, a buyer may still use those negatives to justify THEIR lower offering price. That's why you need to have a Strong Listing Agent to represent you! If a person buys a home for less, knowing that the reason they got it for less was because of some form of external obsolescence, they will not be successful trying to sell it later for a price that's equal to a home that does not suffer similar influences. 

The extreme difficulty in marketing a home, which suffers from External Obsolescence, is that there is no exact known dollar amount to be used as an adjustment to the list price in an appraisal, because it will influence each buyer differently.

2) PRICE: Arguably, PRICE is just as important as Location!  It can off-set the negative location of a property. A homeowner needs to simply reduce the asking price to the point where the market can recognize that the owner took a negative location into their pricing consideration. Price can also offset and reflect Condition, Competition, and make a home stand out in a down market. 

In today's corrective market, where we've seen some prices even going down (Declining Market), it is now more important that EVER to CORRECTLY Price a home.  There is a surplus of home inventory for sale, and a very limited amount of buyers in the market. It's basic supply side economics. There is a LOT to choose from out there, and you NEED to stand out in VALUE with your price, in terms of what your home has to offer as it compares to the competition, and the other things in this article. 

Pricing a home correctly is the reason I spent 8 years completing over 4,000 home appraisals for TRW, inc.  I knew that one-day, it would give me an advantage over other agents!  It has proven to be PRICELESS experience for both our clients and myself!

3) CONDITION: This, like price, is the only other factor you have CONTROL over. A home in tip-top Condition will command a higher price, compared to a home that needs work (deferred maintenance).  Likewise, if a home needs work, it is ALWAYS better to do the work and ask for a higher price, than it is to reduce the price in order to reflect the work needed. Because no matter how much the price is reduced, the market will still use what ever work is needed to again, justify their lower offering price. 

We ALWAYS go through a home with it's owner before listing and give our recommendations.  It's up to the seller to do the work, or be prepared for market resistance to their price.  But again, it’s always better to do the work that has proven to get a return on investment, such as certain cosmetic repairs. Does your home need repairs?

4) COMPETITION: There is no Controlling the amount of Competition.  The more competition there is, the more a home needs to stand out in terms of Value, as reflected in its listing price.  So PRICE is another way to compete in a difficult market. Are you competing with your price?

5) MARKET CONDITIONS: This is another area where there is no control.  It’s easy to understand. In a Seller's Market, prices are higher. In a Buyer’s Market, prices are lower and need to be more competitive as the price relates to the number of home listings in the competing market.

Unfortunately, the MEDIA has done a horrible injustice to the real estate market in the past 2 years!  Because, "perception IS reality"...if the public THINKS that the market is bad, the problem will continue. 

The truth is, it has NEVER been a better time to buy a home! Rates have just been reduced again with the biggest rate cuts in 25 years! Interest rates have a HUGE influence on Purchasing Power! There is very little buyer competition, plenty of homes to choose from, motivated sellers, more time to make a buying decision, reduced prices, seller incentives and interest rates are again at historical lows!!!

6) LISTING AGENT and/or COMPANY: Believe it or not, a listing agent can definitely influence the marketing of a home!  There are a limited number of things that ANY agent or company can provide a seller, but the IMPORTANT things had better NOT be overlooked!  In the over 400 transactions I've been involved in, I have definitely seen where either a listing agent or buyer's agent has not done their job, and some actually breach their agency relationships!  It gives the quality agents a bad name. 

Just to be clear, a listing agent is NOT responsible for finding the buyer.  Less than 5% do Nationwide.  The Role of a listing agent is to market and expose the home to as many people as possible, get the home SOLD in the least amount of time, for the HIGHEST PRICE possible and with the LEAST amount of PROBLEMS.  An agent cannot make anyone show the home. 

A home either sells itself or it does not.  Our job is to be able to defend your price and to use our negotiation skills and experience to help get you top dollar.

7) FUNCTIONAL OBSOLECENCE: Similar to External Obsolescence, a home may suffer market resistance due to Functional Obsolescence.  There are two forms: One is curable functional obsolescence the other is incurable functional obsolescence. 

Examples:

1)      A home without a basement in a neighborhood where the majority of similar homes do have them.

2)      A 2-bedroom home in a 3-bedroom neighborhood.

3)      A 2-car garage in a 3-car garage neighborhood. 

4)      A cape cod styled home, with angled ceilings and no bathroom on the 2^nd level.

These are either curable, or they are not.  Some of the older homes suffer due to antiquated floor plans, lacking a sufficient number of bathrooms, etc.  If the functional obsolescence is incurable, then the listing price needs to reflect the inadequacy.  If the home suffers curable functional obsolescence, then it may be better to correct the problem than to reduce the price to reflect the problem. Again, that's where a strong listing agent is needed.

INSANITY has been described as doing the same thing over and over again, while expecting NEW results.

If your home has been sitting on the market, and you feel it's time for a change, give us a call for a FREE home evaluation, and to view our Power Point Listing Presentation and Proven Marketing Plan!