- Stale listing inflating historically low inventory.
- A languishing home becomes a self-fulfilling prophecy.
- Talk with your Realtor for a game plan to make a stale listing sizzle.
In many markets across the country, the inventory of unsold homes is the lowest it has been in memory.
It is even lower, if you exclude “stale” listings.
Stale houses, like stale bread, have little appeal to consumers.
Stale listings in a hot market, and what to do about them, is the topic of this months discussion between Lane Hornung, CEO and cofounder of 8z Real Estate, and John Rebchook of InsideRealEstateNews.com.
John: Lane, how to you define a “stale” listing?
Lane: It depends on the individual market. If a listing remains on the market far in excess of the average days on market then it is a stale listing. In some of the hottest markets, the average days to contract may be two or three days or a week. If a listing has been on the market for three or four weeks before being placed under contract, it is stale. In other markets, where the average days to contract is 45 days, once the home has been on the market for 60 or 70 days, it is in danger of becoming stale.
Buyers in today’s market are informed and paying attention.
John: Are you surprised that some homes aren’t selling in what is the hottest housing market since the go-go days before the Great Recession?
Lane: No, it’s not a surprise at all. In effect, the market is rejecting the home. There can be a number of reasons for that.
John: Starting with price?
Lane: Price can have a lot to do with it. Some people see a strengthening market and want to get ahead of it, but they may get too far ahead and price too aggressively. That is a mistake. It’s like a Broadway show. You only have one opening night when everyone is watching.
John: If a seller lowers the price enough, is the problem solved?
Lane: To a certain extent. Markets are fairly efficient and at some price point you will find a buyer. But that is really the wrong strategy.
In a hot market like we have today, it is no longer a binary question of will I sell the home or will I not sell the home. Rather, it is how can I maximize the sales price.
John: What can be done to freshen up a stale home?
Lane: Sometimes I think we make it too complicated. The house needs to be priced appropriately. It has to be de-cluttered and staged. It needs to show well online and offline. You might need more and better photos of the home on the Internet. Real estate today is a bit like online dating. How many dates do you think a profile on Match.com with no photos or poor photos gets?
John: Is there a psychological danger to having a stale home?
Lane: Absolutely. In fact, the danger is greater in a hot market than in a cold market.
There are many buyers and brokers out there just waiting to pounce on the next new listing, while ignoring homes that haven’t been selling. If a home hasn’t been selling, especially in a sellers’ market, the first thing people assume is there is something wrong with it.
Once the home has been rejected, they won’t come back, even if the price is lowered. They have already emotionally discarded it.
Due to the popularity of our websites, we get a lot of feedback from people looking for homes online. Many online home buyers tell us they never want to see a particular listing again. They want to be able to block it, to expunge it from the database, forever. They don’t care how many times the price may be lowered in the future.
John: If a home is just languishing, should the seller take it off the market for a time and put it back on the market later?
Lane: It can make sense. But time off the market alone isn’t enough. Talk with your Realtor and analyze why it didn’t sell and work on specific things to make it more appealing. Before you put the home back on the market, do something that actually changes the listing. You can change the price or improve the showing condition or a combination of both.
The rewards can be great. In a hot market, you might spend a little on staging and minor improvements, and you will get a much bigger swing on the upside than you would in a bad market. If you have a good agent and really listen to their input and heed their advice, you can turn a dog into a diamond.
John: Thanks Lane.
8z Real Estate. along with Universal Lending and Land Title Guarantee, is a sponsor of InsideRealEstateNews.com. A question and answer with Lane Hornung is a monthly feature of InsideRealestateNews.com. If you have any topics you would like Lane to address, contact John Rebchook at JRCHOOK@gmail.com.