Ask An Agent: What Can Be Done About A House That Won’t Sell?
John Pasalis goes deep on data.
He is the president of Realosophy Realty, which specializes using data and microtrends to advise clients on the Toronto real estate market. But Pasalis and his agents go much deeper than giving their clients historical pricing details, they can tell you whether a home listed on MLS is a former marijuana grow-op, whether a home’s advertised parking is legal or not, whether a home has had termites or whether or not the renovations done on the home were even legal.
Pasalis exposes it all so that his buying clients can make more informed real estate decisions. Pasalis’ investigations aren’t just for buyers, for sellers, his team can do a deep investigation on why your home is not selling, making him the perfect pick to answer this week’s question.
What can you do when your home has been on the market for longer than expected?
We’ll start with what you shouldn’t do — which is what I think most agents do — drop the price immediately. I think you have to look at what the data says. These are things like what feedback are you getting about your listing? What homes have been on the market since you’ve been on the market what did they sell for?
Being on the market longer than you expected could be a result of overpricing or it could be just that you’re listed in a sluggish market. Maybe you listed in the summer when things slowed down? In cases like that, the best strategy is to take it off and re-list it in the fall. In other cases, the best strategy may be to reduce the price. It really depends on all the data you’re getting about the listing.
From my experience, most agents don’t look at the data. If you look at most real estate sales books, the strategy they always tell you is to reduce the price. The assumption is that the market is telling you you’re overpriced. Yes, there is some truth to that, but maybe you’re overpriced for the time of year. I think if you just happen to have listed in a slow time — depending on how soon the seller needs to sell because maybe they don’t have another option and need to reduce – and you’re not in a rush, the better strategy might be to wait until the spring or fall market.
The busiest time for real estate is actually January, February and March when there’s the least amount of inventory and the most amount of buyers. When we get these seasonal lulls, it tends to happen in June, July and August when well-priced homes may not be moving because everyone is at the cottage and the sales have slowed down.
When you’ve been on the market for a month, you want to look at what else is listed and what else has sold. You should find out how many offers the ones that sold got and whether they sold for under asking or over asking? You should also ask how long they took to sell and how ow similar are they to your home?
The feedback you’re getting from buyer agents is also important because sometimes it’s a matter of making small tweaks to the home. Maybe there are small deal-breakers that people don’t like and are perceived to be expensive, but are relatively inexpensive to fix. Ideally, you would try to fix these things prior to selling your house, but you can also address them while it’s on the market if it’s cost-effective to do so. If people aren’t connecting to the home maybe you should spend a little bit of money on staging it to make it look a little bit more ideal.
When I say you need to look at the data to find out why your home isn’t selling, I don’t just mean stats. Data is everything from market trends to overheard stories at your open house. All of that stuff is critical. Of course, ultimately it’s your house and you can decide what to do, but it’s important that your realtor gives you that feedback and distills that information to you. As the seller, you need to be asking many of the questions outlined here and take an objective look at the answers you get back. Try to take your own biases about your home out of the equation and really dig deep on what the data is telling you.