It happens. Your home was for sale, sometimes listed multiple times with several agents. And once again, it’s expired, unsold. Depressing…
Expired listings are not unusual. In our market, it is “normal” for many homes to be on the market 2 or 3 or even 4 “cycles” before it sells. Why is this?
1. Too Unique? Sometimes, a truly unique property that is priced right, marketed properly, and in good condition needs an extended market time because something about it that makes it appealing to only a limited pool of buyers. Not many homes are like that – but some truly are.
2. Other Competition! Our typical buyer is looking for a vacation home, and may also be looking in upstate New York, or even South Carolina as well as Lake Wallenpaupack. So, buyers may come, look at several homes, like one or two…then end up buying in the Catskills. It happens.
3. Marketing. Sometimes, poor marketing is the problem. If an agent lists a home but does not enter information into the MLS properly, the home may be missed by the target buyer. Sometimes the pictures are so horrible and/or the description so uninspiring, the buyers skip to more interesting or well presented homes.
The Proof is in the Price
Most of the time, however, a listing expires for one reason: it is overpriced. Plain and simple…if it’s been on the market for hundreds and hundreds of days with few, if any showings, it is probably over priced.
Sadly, we can’t look back to 2006 and say “Back then this home was worth…” and price it nostalgically. Nor can we sell it on potential; the price must be based on the actual condition; pricing as if it were fixed or updated will almost guarantee an expiration. If it is beautiful in every way but still priced way out of the market, it will expire.
I have been guilty of listing overpriced homes because I think it might work out. In spite of the market analysis, the sellers insisted that “this was their price” and rather than let another agent get the listing, I agreed to list at the seller’s price instead of the market evaluation suggested price. It’s time to break this cycle. No more expired listings!
I spent a lot of time on overpriced listings in the past, and I don’t want to do it anymore. The MLS doesn’t need to be cluttered with more homes that are priced way out of the ball park. I am not doing sellers any favors, and I’m certainly not doing buyers any favors…it is counter-productive to list a property too high.
Stop Chasing the Market
Overpricing a home can be dangerous. If you price it too high to begin with, you may very well lose your chance to sell it at the CURRENT market value…and that’s not fair to anyone.
I’ve seen it happen: the market evaluation suggests a price of $289,000. Seller says “I am not going to give it away!” and insists on $349,000. Buyers, expecting certain amenities that price range should get them, come…then leave, complaining to their agent that the home was not at all what they expected. The home then languishes, the first wave of disappointed buyers are the only wave of buyers. The buyers who would buy that home won’t know it exists because it’s priced above their budget and it won’t even come up in search results.
Listing expires. Seller agrees to relist, but now at only $30,000 above the price suggested by the CMA. Very few showings. Seller grows increasingly annoyed with the agent. Finally, near the end of the THIRD listing cycle, the seller reluctantly agrees to list at 299,000. But wait.
The problem: in the meantime, comparable homes have sold for $260,000 or so. Or a builder lists his showpiece model featuring granite, hardwood, and glorious master suite for a lower price than this humble home with older carpets and out of date formica counters. 18-24 months later, the market evaluation of 289,000 is now invalid. Overpricing leads to “chasing the market.”
The cycle needs to stop. Agents need to say “The market evaluation suggests this price range. I can not help you unless you are willing to price the home accordingly.”
We’re not trying to be mean nor are we looking to grossly underprice for a “quick sale;” the comps back up that suggested price.
Are you going to list to sell, or list to expire?