Before touching on this, it’s important to know the longer your home is on the market, the more you end up chasing down the price to get to price where demand kicks in. My goal is to advise you so you don’t become the next “expired listing.”
There are multiple reasons why the home doesn’t sell. The following are the main reasons:
- Home was overpriced
- Home is in undesirable location
- The listing agent is too busy
- The listing agent doesn’t have marketing money/resources/experience
- The listing agent is “on to their next deal”
- Home needs updating/improvements/remodeling/staging
- Home has a tenant who isn’t accommodating potential buyer showing requests
- Home seller is interfering with home sale
Let’s address each of these reasons why homes expire.
There’s 2 reasons homes are overpriced. One is the listing agent and the other is the home owner. Let’s address both:
- The listing agent overpriced the home
There are a few reasons a listing agent overprices a home and finds himself/herself failing to sell the home. The first reason a listing agent overprices a home is to get the listing. If you interview 3 real estate agents for the job of selling your home, likely at least one agent will overprice the home to attract you as a client. It’s a commonly used tactic and home owners are emotionally attached to their homes (it’s hard not to be) so they too feel the home is worth more. The listing agent figures he/she will lower your expectations after a few weeks on the market with the home not selling.
Another reason a listing agent will overprice a home is when a home seller chooses an agent that is either a friend or an inexperienced agent you meet. In other words, you don’t interview multiple agents, you choose an agent from your sphere of influence or an open house etc. They are overpricing the home based on your expectations, emotion and lack of experience or diligence in studying comps. As an example, they price your home based on another model match that sold in the neighborhood but the other home has a pool and better location. Premiums are given for pools, location, lot size, privacy, light and bright, etc.
- Home is in an undesirable location
I have a perfect example of this. I drove to an expired listing in a neighborhood in Vista and there were probably 1,000 apartments along this one street and then the rest of the street was single family detached homes. The first home I came to bordering the apartment complex was the expired listing home. This would be considered an undesirable location simply because there are a lot of car break-ins and petty crimes in and around apartment complexes. As well, this home was on a busy street. That’s also an undesirable characteristic of a home. The goal is to have as many buyers possible looking at your home. Families with young kids don’t want to be on busy streets so you end up ruling out a large pool of buyers. As well, people that are savvy to crime rates and want very safe neighborhoods will avoid looking at areas known to have higher crime rate. A home like this has to be priced right.
- The listing agent is too busy
I see this all the time. Its human nature for a home seller to see an agent that does a lot of business and think they will be the best choice to sell your home. The question is how much attention will be put specifically toward YOUR home marketing, follow-up, sales, negotiation and everything else that goes into selling a home for top dollar with least time on the market. There’s a reason I limit myself to 3-5 home sellers and home buyers at any given time. I get paid well for my passion of real estate and my clients deserve my full attention toward the task of selling or buying their home. I can’t give that if I have 10 clients I am working for at the same time.
- The listing agent doesn’t have marketing money/resources/experience
This is also a very common problem. It’s a well known fact most independent agents not aligned with a broker that supports marketing expenses doesn’t have the monies to market homes like agents like myself and others who have marketing support. As well, tens of thousands of real estate agents don’t have much business experience, nonetheless marketing experience in the first place. I’m not here to roast real estate agents. But as a home seller you need to know these things so you can choose the right real estate agent to sell your home the first time. Every time I take a listing I am equipped to invest thousands of dollars and countless hours into marketing that home. And all of my marketing is high quality and customized to each particular home/city. It costs thousands of dollars to market homes correctly. If I’m selling a $3 million home, I’m investing upwards of $10,000 into my marketing of this home.
- The listing agent is “on to their next deal”
’ve been in this circumstance before early in my career. Like you, real estate agents need to earn enough income to pay their bills and afford to live in San Diego. The average agent in San Diego transacts 2-3 home sales/purchases a year. Depending on price point of the homes they sold and commission splits with their brokers, this could equate to as little as $10-$20,000/year. We all know that doesn’t pay the bills. Add in the fact there are over 20,000 real estate agents in San Diego county competing among one another. 20% of us do 80% or more of the home sales/purchases. So the pie is cut very thin for the other 80% of real estate agents. If you hire a listing agent that is just getting by, they will need to be hustling to get their next deal as soon as your deal is signed. You’re running into the agent without monies to market your home. Red flag!
- Home needs updating/improvements/remodeling/staging
This is a very common reason for homes expiring in today’s marketplace. I would say 90% of my home buyers I work with want turn-key homes they can move right into and that would only need to make little or no changes. If your home is a Brady Bunch 1970s home that hasn’t been updated in 50 years, there is a good chance your listing will expire, unless you and your real estate agent priced your home to reflect this lack of updating. If your home is priced to sell based on comps of other non-updated homes of similar size and quality, you’re fine. The other scenario is a home that is vacant and unfurnished. It’s very challenging for home buyers to envision what their furniture and life would be like in a vacant, unfurnished home. I don’t advise selling a home vacant. There are staging companies I work with that will stage the home up to 4-6 months for one set price. It’s worth it’s weight in gold. There are exclusive programs that have been created for home sellers with homes that need updates, improvements, decluttering, remodeling and staging with zero out of pocket cost to you. I’ve got such a program available to my home sellers called Compass Concierge and we are successfully getting 2-4 times return on investment when utilizing this program. And again, not a penny out of your bank account. You pay my broker back at close of escrow - no interest, no fees.
- Home has a tenant who isn’t accommodating potential buyer showing requests
This is a toughie! If you are selling one of your investment properties with a tenant inside, you have to be coached and advised properly by an experienced listing agent on how to best handle this type of listing. Otherwise, you will likely have a tenant who will make it very difficult for buyers to see the home. There are laws in place that protect tenants, so get good advice here.
- Home seller is interfering with home sale
I’m always very polite, sincere and honest with my clients. Transparency is critical when we work together to get you the best price for your home in the shortest market time possible. There are times where home sellers will either want to be home during showings or happen to run into agents and/or home buyers before or after showings or an open house. One wrong thing can be said that deters the buyers from placing an offer. It is best if you stay clear of all home buyers and real estate agents other than your listing agent. Let your listing agent handle the showings and open house. Leave your home 30-45 minutes prior to your showings and open house times and wait for your agent to contact you on a safe time to return home. Few other things. I’ve had clients with video surveillance. This has to be revealed to the buyer agent and prospective home buyers. And once they know, it often deters them from wanting to see the home and/or invest the time in the home to really get a good feel for it. I don’t recommend this, but I understand why some home sellers want this.
So what is the best way to avoid becoming an expired listing? Hiring the right agent the first time around is #1; an honest agent that isn’t afraid to lose the listing by being honest. I have bought and sold over 100 homes in San Diego county. In doing so, I’ve become an expert at providing very accurate and honest comparative market analysis reports as well as implementing my marketing plan, investing my dollars and time and maximizing the potential for top dollar with minimal market time because of my experience and business expertise. I’ve never had a personal listing expire. Hire right the first time, so there doesn’t have to be a second time.
