As the residential real estate market begins to shift more towards a buyer’s market than a seller’s market, more and more homes for sale are coming off the market unsold.
So what exactly is a Buyer’s Market or Seller’s Market? Without getting into too many details;
Buyer’s Market: There are more homes For Sale than there are Buyers. In this type of market, buyers will spend more time looking for homes. There are more homes on the market, giving potential buyers more to choose from. The prices of homes can be stable or perhaps dropping. Sellers will find that buyers have stronger leverage when negotiating.
Seller’s Market: There are more buyers than there are homes For Sale. With fewer homes on the market and more buyers, homes sell quickly in a seller’s market. Prices of homes are likely to increase, and there are more likely to be multiple offers on a home. Multiple offers give the seller negotiating power, and conditional offers may be rejected.
The bottom line is, as our market shifts, it is going to get harder for sellers to sell their homes.
|Here are the TOP 10 Reasons why homes don't sell and what to do to get your home sold!|
|1. Photo Order|
According to a 2015 Microsoft study, the average attention span for a person is eight seconds (one second less than a goldfish). Each year it gets shorter and shorter. The way most real estate apps and websites are setup is to show only the first photo of a home. To get to the next one, you need to click on the next one and so on.
|The problem is that almost all Realtors and For Sale By Owner (FSBO) sellers put the front of the home as the first photo. Nearly all homes’ BEST photos aren’t the front of the house. The problem is that with an eight-second attention span, most potential buyers may never have the patience to get to the best photo or features of the home and will click to the next property.|
Solution – Put at least the first five best pictures of the home as the first five photos. Most people that have clicked through the property's top five photos will continue to click away to see the others.
|2. Price Band Errors|
Most homes are listed at prices that have 9’s instead of whole numbers. For example, it is extremely common for a property to be listed at $899,900 instead of $900,000. Doing this is a major mistake! Most real estate websites and apps have price bands that end in whole numbers (Realtor.ca for example).
When a home is priced at $899,900, none of the buyers (or their agents) searching from $900,000 to $1,000,000 would see the home in that search.
|What makes it worse is that the lower price band buyer is at his/her upper limit. Whereas, the higher price banded buyer would be at his/her beginning point. If the property is on the market for $900,000, both sets of customers would be able to see the home in their search.|
Solution – If possible, price the home in a way that it will be in both price bands, $900,000 instead of $899,900.
|3. Not prepping for market.|
Please, please, please prep your house for market BEFORE it goes on the market. This is required unless you want to price at a discount. Make sure your Realtor coaches you on what projects will have the highest return on investment and which small touches will differentiate your home from the competition.
Many people choose to list their home “as-is.” Listing as-is should be an option that you choose, not just “the way” because your Realtor told you to get the house listed quickly. Differentiating your home is how you will get more buyers that saw your house online to want to schedule a showing. Small repairs to improve curb appeal and make your home show at a 10+ can be done cheaply. Others are not as inexpensive, but give huge returns on your investment.
You don’t have to differentiate on price. If your house presents better than the competitors, and you are more likely to see offers sooner.
|4. Not spending the time to get the home properly prepared and staged before photos and videos.|
|This point is an extension of #3. Almost all real estate agents are so worried about the average days their listing is on the market before it has an offer accepted, they speed up the process to get the home online. The majority of the time the home isn't ready to be shown or photo-ready.|
A seller only has one chance to make a first impression and that first impression is almost always on-line first...then the buyer will decide if your home is worth a personal visit.
Following is a recent 'real life' text conversation between me (working for the seller) and a colleague realtor (working for the buyer):
|Solution – Don’t be in such a rush to get the home on the market. If more time is spent upfront getting the home staged, personal photos removed, and decluttered, a great first impression will be made. And, many times the home will be on the market much less time than if it wasn’t done.|
5. Not using video and professional photography.The average agent is incredibly cheap when it comes to spending money on marketing. Many will take the photos themselves on their iPhones, Androids, or their personal cameras.
If they happen to do a video, they will usually do it on their own and do it as a slideshow with still photos.
|If they do decide to hire a company, they use the cheapest of all companies they can find; they go out of their way to find the ‘dollar store’ of photography/video companies.|
As mentioned earlier in this article, a seller only has one chance to make a great first impression. Doing photos and videos without a true professional will make a negative first impression.
Solution – Spend the money! I never think about the money I am spending when I have a listing. It is not uncommon for me to spend $4,000 or more on photos, drone videos, and 3D immersive tours.
Sometimes I’ll be at the property multiple days for more than ten hours just to make sure that the photos are PERFECT.
The amount of time and care an engaged couple spends on selecting their wedding photographer and videographer is the same time and budget I use for a listing. Interviewing agents and finding one that feels this same way will almost always help a home get sold.
|6. Thinks he/she knows how to market on social media...but has no clue.|
|If I had to give you my best guess regarding how many Realtors or sellers know how to market on social media effectively, I would say only about 2% know what to do. The majority of agents have very few sales that they made from a direct social media advertisement.|
Most of them put too much information online, and the potential buyer has no reason to get more details from the Realtor/seller. The strategy would be ok if the property sold itself, but hardly any properties sell themselves.
To the right, check out the results of our recent Facebook ad for a new listing.
|Solution – This solution is a lot more complicated than the other solutions. One of the most important things to do is not to give all of the information in the ad. Think of it like a movie preview that teases the buyer into contacting the agent for more details. The reason you want the customer to communicate with you is that you have a much better chance of answering questions and giving more benefits to purchase the home.|
If your agent is a pro at social media advertising, he/she will know everything about who the most likely buyer to target. An example would be to advertise to 35-44 year-old females that are on Facebook on Tuesday nights between 7 pm and 8 pm with Apple iOS devices that live in Woodbridge. If a person knows exactly who the most qualified buyer is and when to advertise to her/him, the chance of getting a home sold is much greater. Bottom line, interview agents until one proves that he/she knows exactly what they are talking about.
|7. Hiring a family member or friend without interviewing other agents to see who is most qualified to do the job.|
|Is your goal to do your friend or family member a favour? I believe your goal is to maximize the sale of your home, probably your largest single investment, and look after your own family’s best interest?|
|How many times do we need to hear, “family/friends & business don’t mix”…maybe it’s true!|
More than ninety percent of all Realtors do the same thing - put up a FOR SALE sign, enter the home on the MLS, hold an open house and make a brochure for the home.
As home inventory increases, doing only these things will most probably not get the home sold.
| If the seller is lucky enough to sell the home using these techniques, the length of time for the sale will usually be much longer and the amount netted will be less.|
The professional business relationship between you and your agent can make the difference between selling your home fast or you not selling it at all.
Solution – Interview Realtors until an agent is found that has an effective marketing plan of action with proven results and testimonials from satisfied clients.
|8. Not having the right network of buyers and agents that sell homes in your area.|
|The average agent will email blast every client and every Realtor on his/her list on every listing they have for sale. It may sound like a good idea, but it is the worst idea. Almost always, there are a large number of people on an email list that aren't interested in the email. They could live in a different area, aren’t interested in the topic of the email, or numerous other reasons.|
|When people see emails from a sender that they aren’t interested in, many times they will ignore the rest of the emails sent over time, even the ones that they would have been interested in.|
Also, if enough reports of spam are communicated by those receiving the emails, that sender can be blacklisted which means that their emails will go to spam.
|Solution – Categorize the recipients that receive email. For example, a person could be tagged as a buyer looking to purchase in West Woodbridge or a Realtor that sells homes in Maple. If the Realtor has a new listing in King City, it won't make sense for him to email the agent in Oakville.|
Sending smaller email campaigns (also known as bursts) to relevant groups will increase the open rates substantially and will cause the emails to have a much lower chance of going to a spam folder.
The seller interviewing the Realtor should also make sure that that agent knows many real estate agents and clients that will help get the home sold.
|9. Poor accessibility to view a home|
Since inventory is increasing quite a bit each month, Realtors and buyers have numerous choices to select when viewing homes.
If an agent is scheduling four or five showings for his client and a home isn’t available to be seen with the others, the odds of that real estate agent to come back on another day just to see that home is highly unlikely.
|Solution – Sellers should do what they can to make the house show ready at all times and have a plan that allows the home to be viewed with just a little notice.|
Give the Realtor a key to the home, so he or his team member can show the home when no one is at the house.
|10. Looking at the home through a Seller’s eyes instead of a Buyer’s eyes.|
|With so many home automated sites out there, many times sellers and agents will look at the site's estimates and average them out to get a list price for the home.|
|Other times they will only look at previous sales and determine the price based on those things.|
The problem with these methods is that they are inconsistent. Sometimes on-line estimates are too high, sometimes too low, but rarely just right. In the US, Zillow’s CEO, Spencer Rascoff, recently sold his home for forty percent less than Zillow’s Zestimate, his own company's home value estimate.
Solution – It is critical to look at what the current competition is for the subject property, how much similar properties have recently sold for, and what direction the market is heading.
The most motivated buyers are looking at the market and inventory numerous times a day and know exactly what homes are selling for and all the properties for sale.
Always keep in mind, sellers are competing with individuals that not only want to sell but also HAVE TO SELL.
Interviewing agents and finding one that is aware of all these things will help get the home sold in the quickest time frame.
|Here are 4 Bonus Reasons why homes don't sell:|
11. Did you chose your agent because they had the highest listing price?
|This is a common culprit for the lack of a sale. When the average seller sits down to interview real estate agents, it’s easy to get caught up in the excitement over choosing a sales price. Unfortunately, some sellers choose the listing agent who suggests the highest list price, which is the worst mistake a seller can make. Some agents purposely pick the highest selling price as a strategy to win listings...then after the home sits without an offer they beat the Seller down for a price reduction, also part of their strategy.|
|Pricing a home is part art and part science. It involves comparing similar properties, making adjustments for the differences among them, tracking market movements and taking stock of present inventory, all in an attempt to come up with a range of value…an educated opinion. The "right" price depends on market conditions, competition and the condition of your home. In other words, there is no hard and fast price tag to slap on your home. It's only an educated guess and the market will dictate the price.|
|12. Did you chose your agent because they had the lowest commission?|
|Some Sellers do just that because they believe they are saving money. While it’s no guarantee that paying the market commission rate will net the seller more, an agent should never be chosen based solely on the commission they charge. The painful reality is that an agent that wins the listing because they have the lowest commission structure probably can’t afford to spend the necessary amount of money (or time) to market and promote your home effectively.|
Another painful reality is that a ‘bargain’ commission agent will most likely sell the home for less and although the seller saves, for example, $10,000 on commission, the home sells for $20,000-$30,000 less.
|Why could the home sell for less? Well, apart from the agent no affording to spend the money to properly market your home, they also cannot afford the continuous training and coaching required to be at the top of our profession (marketing, salesmanship, negotiating courses; to name a few) and sometimes the agent has a part time job to supplement his/her income and therefore cannot afford the time to devote to your successful sale.|
Not all agents are the same! Spending more for better quality can in the end save you and make you more. Paying more for a better lawyer, for a better doctor, for a better tax accountant, etc., makes sense to us. We see this in our everyday lives but sometimes sellers act differently when it comes to their biggest investment, their home, which makes no sense. Basically, in the end, the seller gets what they paid for.
|13. What about Teamwork?|
|Why no sale? What did prospects say about price, about condition? What feedback did other agents offer?|
Teamwork between seller and agent is key to know how to alter a marketing plan for success.
Your home is a major financial investment and your relationship with your Realtor should be a full partnership where your needs and wishes are heard and you receive detailed and dependable feedback on the progress of your sale.
|Your agent has a responsibility to source this feedback from the agents who have shown your home and to communicate this to you so together you can make the right decisions about what to do next.|
How well did this occur the last time you had your home up for sale?
Did the agent tell you what you want to hear or what you need to know?
|14. Did you chose your agent because they are a CELEBRITY?|
|Just because an agent has a huge billboard ad or a bus ad or a bench ad or a newspaper ad or all of the above does not mean they are a good agent. Anyone, budget permitting, can have their smiling face on a huge billboard.|
Just because an agent has a large team doesn't mean they are the right agent for you. You might be dealing only with one of the assistants on the team.
Just because an agent has a lot of listings doesn't mean they are the right agent for you. An agent with many listings might not be able to devote the personal time required to effectively get you the sale you deserve. What suffers for an agent that does a high volume of sales is the individual sale...can they get the most for your home is the only question you should be concerned with. Is that agent fighting to get you that extra $20,000 or is he/she fighting YOU to accept the offer on the table?