You list your home and you anxiously await an offer. Showings are sporadic. Thirty days go by, then sixty then ninety. Then you pass the average days on market in your area. It starts to become obvious to you that your house is not selling and now your are getting worried. The days on market (DOM) is the amount of time from the day you list a property until the day you take your house of the market due to an accepted offer. Typical DOM runs about 74 to 120 days in our area and can be very price or property specific. Sometimes luck is on your side but selling a house is usually a well orchestrated plan and not an accident.
I have been in real estate full time for over 12 years. My rule of thumb is you should receive an offer in 15-20 showings and those showings should occur in the first 30-45 days on the market. Not all but most of my properties will sell well below average DOM due to marketing and working closely with the seller for accurate pricing and proper home preparation. After 60-90 of your house not selling you will start to experience MARKET ROT!!
While your house sits on the market longer and longer, typically showings become less and less or almost non-existent.
When your house is not selling you will experience Market Rot!
What is market rot? I heard an agent use this term a long time ago and it is so fitting. Market rot occurs when your house is sitting on the market unsold. The longer your house sits the more stagnant or rotten it gets.
Think of it this way…. when you go to the store and buy bananas, you usually buy them slightly green, they reach their peak in a few days and as they sit on your counter they get a little browner as the days go by. Eventually, if they go uneaten they are so rotten you have to throw them away. No one wants the rotten bananas.
Not unlike what happens to bananas buyers of your home will perceive your home as stagnating or rotting on the market the same way. When your home is new to the market buyers will initially perceive it as fresh and exciting…. maybe this is the one. They are afraid to miss out on an opportunity. As time goes and your house is not selling they become less excited about it. The buyers attitude becomes it hasn’t sold it will be her next week I’ll look around and see if I like something better. The urgency is now gone. Eventually you’ll reach a point where buyers wonder what is wrong with your house because it hasn’t sold. It will get to a point where they won’t even want to look at it because no one else wants it why should they.
I have buyers that will call me on homes they show an interest in and many times as market times creep up they ask me flat out, what is wrong with it, it hasn’t sold.
The life cycle of a house sitting on the market
The graphic below is what happens to showing activity the longer and longer a house sits on the market. This pattern will repeat itself in showings as well as online viewings on various websites. There are two variations on this graph…. the one I am showing you below and one where showings activity is high coming out of the gate and then tapers off after a month or two.
The Number One Reason Your House is Rotting on the Market!
So your house is not selling and literally “rotting” on the market as perceived by buyers….why? The number one reason your house is experiencing market rot is it is overpriced. Right now in today’s market you overprice even 3-5% over fair market value, your house can possibly sit, rotting on the market. Yes you will get activity, but eventually it will dwindle to a trickle. There are two pieces of information I can impart to you and I know my counterparts will agree:
- No amount of marketing will sell an overpriced home.
- It is almost impossible to under price a home. If your slightly under price buyers will bid up a good property. It will attract far more buyers and showings. Increased activity will generally attract buyers and create competition.
- Proper pricing turns the tables on the buyers, instead of sellers competing for buyers attention, buyers are now competing for the home!
Just to back up what I am saying I reviewed data for Middlesex County Massachusetts. All single family home in the past year between 0- $1,000,000. What the data shows is that property that sell quicker sell for more money then homes that sit on the market.
Home on the market for 0-60 days- 6633 home sold for an average of 100% of the list price for a median sale price of $470,000. Out of those 6633 homes 1425 of them had price changes averaging 3.71%
Homes on the market for 60+ days- 3188 homes sold for 97% of the list price for a median sale price of $425,000. Out of those homes 3144 had price changes averaging 5.33%
In that same time period 3237 were expired unsold or withdrawn from the market. While some of the withdrawals are for various reasons most are because the home owners are tired of trying to sell their home.
I am not a math whiz but it looks like that selling a home in under 60 days will probably net you about 5% to 7% more then homes that sit on the market for over 60 days. Their were far less price changes prior to the 60 day mark and the home that sold under 60 days sold for 3% more! On top of it the longer you sit on the market there is a chance your home will go unsold!! Besides saving time and money there are other reasons to price your house properly.
While overpricing your home is the number one reason that your home isn’t selling there certainly can be other reasons and they are spelled out in the blog post series I did on expired listings.
Some Ways to Avoid Market Rot
- Hire an experienced agent- An experienced agent will know how to counsel you and price your home properly. They will not just be “yes men” and do anything to get the listing they will provide data and counsel you on how to properly price your home. This data will include a comprehensive Comparative Market Analysis of sold properties that are similar to yours.
- Review and understand the data yourself- Review the data yourself that your agent provides you. Does the data make sense? Again, its your decision what to list the house for decide if the information is believable or not.
- Don’t get into the trap of thinking asking more will net you more- Yes that is certainly human nature. I can provide valid data for you to review but it is ultimately your choice to set the listing price. I have had sellers say, yes they understand but they want to leave bargaining room or worse yet…. I want to try let them make an offer. Understand that many buyers will walk away and not make an offer even if they like your home if you are overpriced. They do not want to get involved in a process they don’t believe will have a good outcome.
- Make your home available for showings- Yes you have to show it to sell it don’t deny every other showing because its inconvenient. Guess what? Selling a home is inconvenient at times. If you cant be inconvenienced maybe you shouldn’t sell your home.
- Put your home in tip top showing condition- Clean, de-clutter, freshen paint and clean some more!! If you can do some of the small repairs that need to be done. A home that shows well will also photograph well and attract buyers online. Your house may need a knew kitchen or could use a little TLC. Maybe you don’t have money to fix it up but you can certainly paint, declutter and clean.
These are just some of the reasons why your home is not selling. Keep a constant line of communication open with your agent and constantly review what is happening in the market place as well as the feedback you are getting on your home from the buyers. React quickly before it’s too late. I always tell my sellers, feedback is one of the most important tools we have once a home is on the market. One bad comment doesn’t make for an immediate change but if you are hearing the same feedback over and over its time to make a change. Of course there are things that you can fix or change, but there are some objections that can only be overcome with a price adjustment.
A house can easily be cleaned or de-cluttered if it is distracting to buyers. But a house that backs up to the highway cannot be moved. I have noticed over the years after working with 100’s of sellers that feedback like the house is too small or the highway in the backyard is too loud goes away as the home starts to be priced more inline with what will attract the right buyer.
At the end of the day, take the time to understand the comparable properties to yours and price it right. It will save you months of aggravation as well as putting more money in your pocket.
I have been helping home sellers successfully sell their homes for over 12 years. I offer valuable historical data about your market and an exceptional marketing plan. I can help you maximize your home sale. If you would like a no-obligation consultation call me today at 978-360-0422. Thank you for reading, House is not selling? Avoid MARKET ROT!!