How Low Does It Have To Go???

Posted by Janet Owens on Thursday, November 30th, 2017 at 4:47pm.

I recently acquired a new listing.   Well, new for me but unfortunately, old for the market.  When I took the listing, it had been on the market for 868 days.  Yes, that's right, 868 days...I like a challenge.  And no, the Greater Houston Area is not a dead real estate market.   When you first hear that a home has been on the market for so long, your mind conjures up all kinds of sights and smells - why else would no one make an offer?  This simply isn't the case with this home.

It's been lovingly cared for by the original homeowners.  It's not stigmatized, the homeowners are not smokers, and they have no pets, never have.  It's in a good school district,  located in a quiet gated neighborhood, close to shopping, restaurants, and theaters. It has a very large fenced backyard that backs up to a family farm. It's priced about 15% below market and the homeowners are leaving the pool table, 2 flat screen TV's, all furniture and decor in the media rom, and media equipment.   All exercise equipment and dry sauna in the exercise room, as well as the gazebo, wrought iron furniture, and fire pit all stay!

The first time the sellers listed the home, they listed it with a limited service agreement company (discount broker) that was located 200 miles away.  The 6 listing pictures that were online (our MLS allows 32) and taken by the homeowner were dark and fuzzy.  If anyone wanted to see the home, they or their Realtor would have to email or call the homeowner to schedule it.  For a Realtor, this type of arrangement can be difficult to schedule if the seller is hard to reach. This listing expired after 185 days.  

The next agent had professional photographs but he listed it $62,000 more than the previous listing that had received no offers.  He had the listing for 686 days, reduced the price 9 times but again, no offers.  According to our local MLS, if a listing is relisted within 6 months of the previous listing end date, the days on market continue to accumulate.  If you wait 6 months or more to relist, it shows as a new listing with no previous days on market.  Unfortunately, the first time he took the listing, he listed it 20 days prior to the 6 month mark so the clock started up again.  When he relisted it a second time, he was 35 days early.  He could have saved the homeowner 367 days on market if he had been careful...

So, what went wrong?  How can a home languish on the market for over 2 years and not receive a single offer? Better yet, how do you sell a home that's been on the market that long?  

The first mistake was made by the homeowner trying to save money using a discount listing brokerage.   This type of brokerage is discounted for a reason.  They don't do anything other than list it in the MLS.  They don't use various means of internet marketing or paid advertising.  They don't take professional photographs, instead they leave the photography up to the homeowner.  They post a limited number of photos used in the MLS and have no verbiage describing details in the photos. They don't assist with scheduling through their own company or a third party showing company, that costs extra. If a showing is scheduled, they don't vet the buyer to assure they are a qualified buyer.  There's no follow up with the Buyer's Realtor after a showing - if one has even been scheduled.  What if the buyer doesn't have a Realtor? Is the showing left up to the homeowner to conduct?  Is that even safe?  I don't know about you but I wouldn't want just anyone calling me to schedule a showing on my house.  A discount brokerage will not assist in negotiating the contract if one is received. They merely pass the information along to the homeowner and let the homeowner work it all out. And finally, there is no monitoring or follow up from contract to closing to make sure the transaction holds together.  

The second mistake the homeowner made was hiring an old school Realtor that used the three P's - Put a sign in the yard. Put the listing in the MLS.  Pray.  It didn't work.  They had only 5-6 showings over 686 days and no offers.  I can't explain it other than the fact that the second listing agent started out too high and had to chase an already tired listing down in price. The housing market did not appreciate that much in 6 months.  I've so often heard, "Well, we can always go down in price but we can't go up."  It doesn't appear that either of those statements is true in regard to this house.  Why oh why do sellers think that they know more about pricing and selling their home than the Realtor they've hired to do the job?  If the home didn't sell at price "x" after 185 days on the market, why do they think that it should be relisted 15% higher?  

The third mistake the homeowner made was keeping the second listing Realtor for 686 days.  Real Estate and how Realtors sell Real Estate has drastically changed over the past few years.  It's no longer about selling Real Estate but how you market Real Estate.  

Which brings me back to how do you market a home that's been on the market for over 868 days?  How low does the price have to go to get interest in it?  How do you overcome the preconceived notion that there has to be something wrong with it since it's languished on the market for years?

I've had the listing for 46 days now and have had two showings.  I'm concentrating on overcoming the huge days on market and trying to explain it.   Mistakes were made that not only cost the homeowner time but money.   Now it's time to find the right buyer and I'm looking for that person.  I'm certain I'll find them through savvy internet marketing, utilizing social media, ppc advertising, and you.


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