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November 03, 2009

Have you tried to sell your Los Gatos home and not had success? If you listed your home for sale but it did not sell, you are probably tired, frustrated, and feeling skeptical.  Let’s look at what is probably happening.

First we’ll have a look at the overall landscape for home sellers in the Los Gatos area and look at some numbers.

The numbers below reference “area 16” in our MLS, which includes Los Gatos, a little sliver of San Jose and Campbell, and all of Monte Sereno.  It is meant to give a general sense of the real estate market conditions for the area.  Homes in this post refers to houses, condominiums and townhomes.

Houses, Condos & Townhomes in Area 16
Available (status 1) 191
Pending (status 2-4) 79
Pended sale in last month 46
Sold & closed (status 5) 35
overall months of inventory 5.45
odds a home will sell this month 24%

Sales activity is picking up, as you can see by the larger number of pending sales than closed sales. But please note that not every home under contract will actually close escrow.  Getting your home an accepted offer and getting it “in escrow” is the first hurdle, but not the only one.

The odds are actually against your home selling right now.  In the last month, only 46 homes had accepted offers on them, and there are 191 available in the Los Gatos area.  The ratio – the odds that any given home will sell in the next thirty days is approximately 24%.  So if your home hasn’t sold, know that you are not alone.

But what can you do about it?

First, you need to know what the issue is (or what the issues are).  To get a contract on your home, you need a good amount of qualified traffic, approximately 3 to 5 showings per week.  If you have the activity, get feedback from your agent – what are the objections, concerns, and reasons why buyers don’t move forward and write an offer?

Usually the problem is in one of a few areas, sometimes a combination of them.  Here they are in order of probability:

  • the price is too high
  • the home is too difficult to see (restrictive days, hours, arrangements)
  • poor condition
  • poor cosmetics
  • location issues
  • seller  or sale issues
  • poor marketing


The vast majority of the time, the main issue on homes that don’t sell is pricing.  Sellers are sometimes “the highest bidder” on their own home. If your home is probably worth a million dollars to 95% of the buyers, but you list it at $1,400,000, it likely won’t sell.  Maybe 2-5% of the buyers will bite, 95% won’t and the balance will only buy it at $800,000.  If you are serious about selling, put your pricing strategy in line with the market.  Ask yourself: What is the probable buyer’s value?

But I’m not in a hurry!  I don’t want to give away my home!  I can wait!

Of course, occassionally a seller can set the price too high and a home will sell.  That is usually a fluke. So is the other extreme, when sellers part with their property at fire sale prices.  If you are truly not
in a hurry and want to sell for a certain dollar amount
, wait until the market catches up with you. If your home is the most expensive one for homes of its kind, your listing will only guarantee that other homes will sell first – your wil make theirs look like a good deal.

Set realistic expectations with pricing and you will get over most of the reasons why a home won’t sell. If the price is truly right, buyers (and their Realtors) can often overlook any other condition or situation.

Restrictive Showings:

How hard is it for a Realtor or other real estate professional to preview or show your home to buyers? Do they need to give a lot of notice? Can they only visit your home on certain days, times, or with an agent present?  The harder it is to see your home, the harder it is for an agent to sell it.

There’s a wide variety of showing options.  For ease of showing, best is on the left and worst is on the right.  Where is yours on this continuum? 

Vacant Call first, no show Appt 24 hour  Appt 48 hour write offer 
Go Direct then go after 5pm only through notice  only through notice subject to
    or no show seller requir

listing agent required inspection

If your home is not getting traffic, it may be because your home is too hard to see. If possible, consider making your home more accessible.  Remember that buyers usually have jobs and can only see your home on their time off.  For most, that means a showing at an inconvenient time, such as 6pm.  The buyers may or may not have weekends off, so don’t presume that they can come on a Saturday or Sunday during an open house. 

It is hard to have your home on the market, especially if you’ve got kids at home.  With my clients who are selling their home and need to work around the kids’ schedules, I usually suggest showings from 10am to 7pm seven days a week.  If we get their home priced, marketed, and under contract within a week or ten days, this is very doable and it enables buyers to come by after work if needed.

Recently some buyers of mine wanted to see a particular home but on weekdays it was only available until 4pm.  They could not get there until 6, so ended up buying another home. 

Remember: if they can’t see it, you can’t sell it.

Poor Condition, Poor Cosmetics, Odors and Pets:

If your home needs a lot of work, it will scare off most buyers.  In Silicon Valley, home buyers are often working full time (or more) and they usually can’t or don’t want to take on a home that needs a new kitchen, bathrooms, wiring, repiping, etc.  It’s just too disruptive and, frankly, a lilttle scary to the majority of them.  If they do take it on, they will want a steep discount for their trouble and for the “risk” involved.

For instance, if a fully remodeled townhome sells for a million dollars, and it takes about $100,000 to bring an original one up to that level, the buyer won’t pay $900,000 for it. No, the buyer will only pay about $800,000, maybe a little more, since he or she will have to do the fixing, live through the mess, and take on the risk that the project is bigger than it seems. 

Cosmetics refers to the minor stuff like paint and carpet – these aren’t structural but they certainly do factor in how a buyer feels about the real estate for sale.  Is the home too cluttered? Are there too many personal effects?   It is a common problem and is an easy fix if you are willing – but if not done, can create problems for buyers who simply cannot visualize themselves in an overstuffed home. You need to make it possible for them to mentally move in. They can’t do that if your personal photos and stuff is taking up too much of the space.  Remember, too, that you want to make your home appear spacious. If it looks crowded, buyers will not want to buy.

Odors are a common problem too. Smoke? Strong cooking odors? Incense?  Most Los Gatos or San Jose area home buyers will have trouble getting past strong odors because they are afraid that the only way to get the home smelling fresh will be to pull up carpet, replace curtains, etc.  Or that even that won’t do the trick.   It is very important to make your home a comfortable place where buyers can linger – get rid of the smells. Do not smoke in your home.  If you have lived and smoked in your home a long time, get your curtains dry cleaned, wash your carpet (or consider replacing it and the pad under it).  Get the smells out!


Once I was previewing a Los Gatos home for sale and simply gagged on odors when I entered the bedroom wing.  The sellers had pet bunnies in cages and the smell was terrible.  We have had bunnies too and the smell wasn’t like this – the owners simply weren’t cleaning the cages enough.  If you have pets, keep them bathed. Clean their bedding and cages often. 

Another time I was previewing a San Jose condo and one of the kids ran up to me and literally shoved a baby snake in my face. Luckily, it didn’t freak me out.  But it would scare a lot of buyers.  More often, it’s dogs that frighten potential home buyers.  Please make sure that your dogs and other pets are either out of the home or in a run or crated during showings. They frighten some people and will make them hurry out of your home.

You can always compensate for poor condition and cosmetics with an appropriate price, but it is often cheaper for you to fix the problems, such as decluttering, airing out the home, adding a new roof or doing cosmetic (light) remodeling, before putting the home on the market. New paint, carpet, light fixtures, sod and annuals will do wonders for the sales price of a tired looking home.

Location and Neighborhood Issues:

If your home is adjacent to something undesireable, such as high voltage power lines, a grocery store, or is located in a natural hazard zone of some kind (flood plain, earthquake fault zone) or anything else that a buyer may find objectionable, often there’s not a lot you can do about it. You usually cannot “fix” too many cars on the street, neighbors who don’t maintain their yards or houses, etc.   Sometimes buyers don’t want a home because of feng shui issues such as the way the home faces (north, south, east, west).   Maybe they don’t want a home that faces a T intersection.

Sometimes, though, you can mitigage the location and neighborhood situation a little. Plant trees and hedges to screen a view of power lines, your neighbor’s
junker or RV in the driveway. (Yes, some homebuyers
will find RVs and boats an eyesore and won’t want to live next to them.)  You still have to disclose anything that might bother the buyer, but that doesn’t mean they have to see it.

Is it a feng shui issue? Sometimes there are “fixes” that can make whatever problem it is less of one.  Talk to your agent and read up on whatever the item is.

Seller or sale issues:

If it is a short sale, many buyers will simply boycott it because there are too many unknowns – will the bank approve the short sale? Will the sale close?  REOs are abundant but sometimes those homes are stripped – too many things are missing or damaged, so they don’t always sell. (The bank owns these, of course, but if you’re a neighbor and wondering why a nearby home hasn’t sold, that may be the reason.) REOs come without presale inspections or disclosures in most cases.  That raises the risk factor – buyers have too many unanswered questions, and this can also slow down a sale.  I was showing an REO near Valley Fair yesterday and the oddest thing is missing there: heat.  There is simply no heat source at all in the home.  This kind of thing can put off most buyers.

If you have a “seller to find replacement home” contingency, that will also not work for most buyers.

If the seller is always home, or worse, won’t leave the buyers to look in peace, that can also scare off buyers.  They need to be left alone so they can see the space and visualize whether their furniture will work, whether or not it will suit the way they live.  When my family and I were homebuying about 10 years ago, one seller followed us all through the home and even into the yard.  He pulled a lawn chair out and moved it so that we were not out of his sight for even a second as we walked around the yard.  To this day, my kids refer to it as “the house where that man kept following us”. We didn’t buy it, of course. It was creepy.

Poor Marketing:

This is almost never the reason why a home doesn’t sell, but on very rare occassions it may be the case.  Sellers often think that the problem is marketing, but a home with the best marketing in the world won’t sell if the price is wrong and the home is too hard to see or has other major issues.  But perhaps one home in 200 will have a true marketing problem. 

Marketing problems, in order:

  • not enough photos of the home
  • photos only of the outside, no views of the major parts inside such as kitchen
  • bad photos of cluttered homes, yards, cars in driveway, etc.
  • incorrect MLS entry of data, underrepresenting the number of beds, baths, garage etc.
  • other MLS or listing issues, visible to the agent community

The #1 marketing culprit is poor photographs of the home, not enough of them, or not making the home look appealing for the photos.  Again, some homes will sell despite lousy pics, but we want to aim at the majority of buyers.  No pic? They’ll probably pass on the home.  No view of the kitchen or baths? They’ll presume the worst – it must be horrible!

MLS issues do happen. I have seen agents state that a home has a 1 car garage when it has 2, or 1 bath when there are 2, etc.  It is very easy to click the incorrect box, so it is crucial that the agent and the home owner double check and make corrections as soon as the home goes on the MLS.  If the wrong data is listed, your home will miss out on buyers seeing it.

I have to tread lightly on the last point about MLS issues that only agents can see.


Most of the time, buyers do not pay the commission, but it comes out of the sellers’ proceeds. There’s a variety of commission rates offered to the buyers’ agent (it is not fixed by law, of course) but sometimes that figure is so low that it can disincentivize a buyers agent from showing the home.  In the extreme, I once saw a downtown San Jose home with a commission rate of $1 (one dollar).  That will work if the buyers are willing to pay the commission, but usually they don’t want to do that.  At the other extreme, sometimes as a marketing angle, sellers will offer a slightly elevated commission rate to increase traffic. 

What I do for my seller clients is to run the mls (with the commissions showing) of the competition & pending sales and download it to an excel spread sheet. I then sort it and check days on market and sales price against with the commissions to give the sellers a sense of what’s happening.  I did this a couple of days ago for clients in Willow Glen.  It looked like the average net is almost 1% higher by placing the commission at one point versus another.  This may or may not always be the case – you would have to actually run the data to see.

A few times, I’ve had hard-to-sell homes and by elevating the commission above the crowd a little bit, increased showings and got the home sold (often when I’m the 2nd or 3rd agent trying to sell a home).  Conversely, if the commission offered to the buyers agent is $1 or on the low end of what’s offered in that area, it may hurt traffic.  It is legal to offer any amount – or none, if you are selling by owner – but think of it as a marketing dollar. 

The Problem Sales Agent:

On the most rare of occassions, the real estate salesperson may be the problem. This really is extremely infrequent, but the personality of your sales professional, or his/her reputation, may be what’s causing your home to not sell or to sell for less.  This is not a brokerage issue, but your salesperson I’m talking about.  Buyers don’t usually know who’s who, and they don’t care which company has the listing.  But the buyers’ agent might know that the listing agent is a difficult person, unreliable, unprofessional, or any other bad combination of things.   Buyer agents may simply try to avoid working with those listing agents if possible.   This is extraordinarily rare – one in several thousand – but it can happen. So before hiring, find out what the agent’s reputation is with other Realtors.  We are never supposed to badmouth the competition, so it may be difficult to figure out if your agent is on the very short list of disliked or distrusted agents, but it’s worth trying. Your salesperson is part of your package deal, so make sure you hire well.

If you’ve tried to sell your home but been unsuccessful, the chances are that one of the issues above is the problem.

Conversely, how do you make sure that your home is one of the 24% that does sell?  It is both simple and hard:  hire a good agent, get the price right, get the home into show-ready condition, make the home easy to see, double check for marketing issues or errors (home info, enough pics).  Getting it all right is not easy, but it will greatly increase the odds of your success in selling your home.

If your home is an expired or cancelled listing and you would like to chat about getting it sold, please call or email me. I’d be happy to meet with you and chat about what can be done to get your home sold in today’s market.