If you want to build your dream home, chances are you have to sell a home first, and if you’re like most sellers, your home is still on the market.
Why don’t I have an offer?
Why are these offers so low?
Why does my agent keep telling me to drop the price?
If you’re trying to sell your home, and it’s been on the market for more then 3 months, these questions are quite common among todays sellers. But have you tried asking these questions from a buyers point of view? Let’s talk about each of these scenarios individually so we can gain some insight from a buyers point of view.
Why Don’t I Have An Offer?
Your home has been on the market for an extended amount of time, and you haven’t received an offer. How come? There are a few ways to go about answering this question.
If you were a buyer in your market today, and you were shopping for homes, how many choices do you have? In most markets, inventory levels are at all time highs, and buyers are overwhelmed with choices. A buyer is going to look at every home under a microscope, and if they find something that just doesn’t fit, they will move on.
Let’s break it down further. Let’s say you have 40 homes in your market that are comparable to your home and each month, out of those 40 homes, 4 are being sold. Now, if only 4 homes are being sold in your price range every month, that means your home has to be one of those 4 homes to sell. What I mean is, your home has to be in the top 4 of the 40 homes available. This is called an absorption rate.
If only 4 homes are selling a month, and there are 40 homes available, your home has to be 1 of the 4 best, best meaning, best condition, and at the best price. So, after a given time frame, let’s say a month, you have 10 showings, and your home hasn’t gotten an offer yet, what can you do to be one of the best homes in your price range? Talk to your agent, and figure out what needs to be done to get an offer.
Why Was My Offer So Low?
After considering why your home isn’t selling, you decided to drop the price. After dropping your price, activity picks up, and with these showings comes an offer. Yeah!! Oh, wait, why is this offer so low? Are these guys nuts? Reject it!!
Hold on, time to look through a buyers eyes. Buyers in this market have been coached by mass media and all they hear is home prices have dropped, it’s a buyers market, and anyone can get the deal of the century. Most buyers that I deal with in todays market are looking for a killer deal, and they think they are entitled to get the best deal. These buyers have been looking at homes for quite some time, and have probably submitted multiple offers on other homes, they’re fishing.
These buyers are submitting offers on multiple homes at extremely low prices. They are fishing for a homeowner in distress that is willing to entertain their low offer. And guess what? It works. Home buyers know that some sellers, will entertain those low offers. Are you willing to negotiate? In this market, you may have to entertain those low offers, negotiate, and find out what it’s going to take to get the deal done.
Why Does My Agent Keep Telling Me To Drop My Price?
If your home is priced right and in selling condition, your home will sell. Even though we are in a down market, homes are still selling that are priced right. If, after a certain amount of time, your home hasn’t gotten any offers, or your showing activity has stopped, it’s time to think about price. The #1 factor in a home selling is it’s price.
The reason agents ask you to drop your price, is because the market is dictating a price reduction. The market has spoken, and your agent is giving you market information. Now, some agents will tell you to overprice your home to get the listing when they first meet you. I am not talking about these agents, as that is unethical. I am talking about honest agents that will give you an honest price when they tell you what to list at.
If you truly want to sell your home and you aren’t getting offers after an extended amount of time, you may need to drop the price, and just move on.
In years past, you could put a for sale sign up, and your home would sell. Today, getting a home to sell in a timely manner, is a science, and it’s more important then ever to hire a top producing agent. In every market, 20% of the agents are doing 80% of the business. Those top 20% are the agents you should interview, and have selling your home in todays market. Happy Selling!
Lisa Udy, 
Was a great eye opener. Must read this page if you are looking to sell your home over a long time. Though the real estate was hit badly by recession these tips could get you a better price for your house.