March 03, 2009
There are a lot of frustrated, tired home sellers in Los Gatos, Monte Sereno, Saratoga, and all over Silicon Valley. Their homes are on the market but are not selling. That’s exhausting and discouraging!
They want to know a few things:
- why isn’t my home selling?
- why did another home sell, rather than mine?
- what do I need to do for my home to sell?
- what should my agent be doing to get me a good offer?
Usually there are multiple issues, of varying importance, which impact a home’s ability to sell. The biggest and most obvious one is price. Drop the price low enough, and of course it will sell. Price reductions are the ultimate remedy to non-selling.
Often, though, there are other things at play too. By tweaking some of them, it may be possible to take a lesser hit on the sales price and ultimately to net more from the sale of your home.
Starting Point: Understanding the Situation in Silicon Valley’s Real Estate Market Today
Want to list AND sell your home? It all begins with a realistic understanding of the current market in terms of price, condition, and the odds that your home will sell
Price: The brutal truth is that most homes in the Los Gatos area (Almaden, Saratoga, Monte Sereno, Cambrian and Campbell) are not what they were worth yesterday. The peak has passed us by. Relative to the past, many homes would sell for about the same as they’d have sold in appx 2002 to 2004. While this isn’t true for every home, it is true for a great many of them. If your home is in that category and you estimate it’s now worth a 2007 or 2006 price, you’ll be too high and your home probably won’t sell.
Want your home to sell? It will probably have to be in the bottom 20% of pricing for similar homes on the market to get an offer. To get yours sold, you have to be the cheapest home and the best value for the money. That’s not pretty and it’s not comforting, but it’s the truth.
Condition: Buyers have never been pickier! Most buyers demand a turnkey home which you have taken pains to remodel, tastefully and with permits/finals. They want to know that they will not have to sink money into a new roof, furnace, pipes, kitchen remodel or anything else. A few will be able to see through old paint and carpet but most can’t. To sell, a home either needs to be the “shiney penny” or it needs to be priced like a fire sale. Most often, it’s cheaper to improve the condition a bit rather than drop the price like a boulder. Most sellers have a fair amount of work to do to get their homes ready for sale.
Odds: This part is really hard for most sellers to grasp, but it’s probably the most important thing. Statistics show that the odds are not in your favor for selling your home. Most homes won’t sell. How bad are the odds? Depending on your home’s location, condition, price point, school district, and other factors, it ranges from about a ten percent chance of selling to a twenty four percent chance of selling. In other words, you have to be extraordinary to be in the category of homes that DO sell.
Why Do Some Homes Sell?
They are usually priced low, are easy to see, are well marketed, and create a situation where buyers are confident going into the escrow (they have presale disclosures and inspections, among other things).
What’s Needed: Right Price, Right Condition, Right Marketing
Getting the price right is not always easy, especially when there are very few sales that would qualify as “comps”. Sometimes, too, the condition seems OK to owners and agents, but buyers may not feel that it’s OK at all. This is information that you need to know!
Feedback on condition and price: Some agents never call or email to see what showing agents or their buyers had to say about the home. I have heard a few agents tell me, “The only feedback I need is a signed contract”. That is really not helpful to a seller or listing agent. Some of the negative feedback, while unpleasant to hear, is helpful in aiding sellers and listing agents to remedy problems that cause buyers to pass the home by. Not getting feedback is like having a doctor tell you what you want to hear rather than what you need to hear: you may feel better in the short run, but the long term damage is much worse than the short term discomfort of hearing why your home is rejected.
If your home hasn’t sold, there’s a good chance that the price and condition aren’t up to the challenge of this difficult market.
Most common issues that I hear from my buyers are these:
- the home needs too much work (buyers cannot or will not remodel)
- the home is too dark
- there are bad odors (pet odors, cooking odors, cigarette, incense or other)
- the home feels very cramped and crowded
While the first issue may be a challenge, the last three are all fixable. A good agent can assist you in lightening up the home, removing odors, and making the house or condo feel more spacious. These will require work and/or expense on your part, but often it is cheaper to do the improvements and staging than it is to continue dropping the price!
Marketing: The marketing is very key, it’s your home’s face to the world! Some real estate professionals mistakenly think that if the home is on the MLS with a basic description, no more is needed. If it doesn’t sell, just reduce the price! This is, of course, short sighted!
Here are some marketing problems I see which can hinder a home’s ability to sell for top dollar:
- not enough photos in the MLS
- no virtual tour
- not decluttering the home for the photos and for showings
- poor description in the MLS, using vagues phrases and no specifics
- not exposing the listing to major websites (little or no syndication)
- no sign, lockbox, or MLS – home hard to show (appt only)
- poor commission rate to buyers’ agent (this is a marketing cost too)
- no networking (brokers’ open or other means of exposing the home to the buyers’ agents)
Sometimes there are peculiar issues that are not covered in this general post. A rare few number of real estate professionals are very much disliked and distrusted, and other agents may avoid showing those homes if possible. Of course they aren’t supposed to do that but it has been known to happen.
Would you like a no obligation consultation on why your home hasn’t sold, or how to get it sold in a challenging market? Please give me a call or send me an email for a confidential meeting. Or request an online range of values by completing a form at www.SiliconValleyHomeValue.com.