You have cleaned your house, de-cluttered it and cleared out so that potential home buyers could see the house alone. You have followed your agent’s advice on pricing and staging. You are exhausted, and at the end of it all, your house doesn’t sell.
This is a difficult situation for Silicon Valley homeowners, especially as they read that it’s a “seller’s market“, as it is today. That would lead you to believe that prices are strong and sellers are in control. But that’s not always the case. In every market, no matter how “strong”, some houses, condominiums and townhouses simply don’t sell. In fact they may never even get an offer. What’s going on?
Let’s first talk pricing. (We’ll address more issues at the end of this topic.)
Most of the time, Realtors and other real estate licensees can give you the “probable buyer’s value“. But figuring out what a buyer will want is not like a perfect mathematical equation. We know what the odds are, most of the time, and for the most part, real estate licensees will do their best to give you correct info. Sometimes, though, Silicon Valley sellers don’t want to hear it. They may have their own number in mind, no matter what the comps indicate.
So some home owners in the San Jose area are literally the highest bidders on their own homes. The market analysis might indicate a probable value of $1,200,000, but the homeowner is sure it’s worth $1,300,000. Or more. Then what?
This happens to real estate practitioners all the time. I once even had someone tell me an inflated price and then demand that I show enthusiasm for that price. It was simply an invitation to lie – and I wasn’t going to do it. Sometimes buyers are desperate and will overpay. That’s hard to predict. But I knew, in that particular case, that 9 buyers out of 10 wouldn’t pay the price the seller insisted on.
Many agents feel pressured to agree with the home owner. If the home seller interviews 3 agents and one is “more enthusiastic” or offers a higher list price, the seller may emotionally connect and hire that agent. That’s very human. But on the real estate licensee end, if someone says a price that the seller wants to hear but is unrealistic (in order to secure the listing), we call that “buying the listing“. This is not uncommon and is often the reason why homes fail to sell: overpricing.
At other times, though, sellers hire an agent and they both agree to “try it” at the higher price. The real estate agent believes (perhaps without talking it through first) that if the home doesn’t sell in a few weeks, the seller will then be ready to lower the price to a realistic level. The seller, in turn, may not recall that the listing agent said this was a long shot…and be angry when the subject of a price reduction is broached.
In my experience, most of the time when a home fails to sell, it’s because it was overpriced. Sometimes it can seem that the way prices are rising, a particular list price will be appropriate. But the market can change. If the most recent closings fall short, or the market softens a little, a seller and his or her Realtor can stumble into over pricing – even though it appeared a few weeks prior that the list price was attainable. Things like a jump in interest rates, a terrorist attack, a big earthquake can all cause the real estate market to sputter and prices to freeze or decline. Sometimes we just cannot see these things coming. Sometimes the market just suddenly dies or drops.
Other issues at play:
Other things can also wreck havoc with a home sale, of course. Things like:
- bad odors (especially cigarette smoke but also pet or cooking smells, incense, local problems like )
- sellers always being home at showings
- property being dirty, cluttered, and not show ready
- property needing a lot of repairs or updating
- difficulty in scheduling showings (requiring too much notice or that the listing agent be present)
- no lock box/keysafe
- neighborhood issues – RVs lining the street, too many cars on the street, unkempt yards, bars on the windows of several houses
- a listing agent that other real estate agents avoid
- a very low commission rate offered to the buyer’s agent
- too many distressed sales (short sales or bank owned homes) in your property’s neighborhood
- sometimes, an out of area agent or a limited service listing agreement might discourage buyer’s agents from wanting to show your home (since they may believe that you are getting no professional help on the selling side and they may be doubly liable with “implied agency”.)
- no photos other than the front of the property – what isn’t seen is deemed by buyers (and agents) as being horrible
So once you’ve looked hard at all of these things, and perhaps vetted some questions with a trusted real estate expert, it’s time to get to the heart of the problem. Did you require 24 hours notice, have no lockbox and no open houses? Is your agent someone who’s not really helping but instead is 4 hours away at best? Is your price hopeful rather than realistic? Was there a crazy low payment offered to the buyer’s agent? Any and all of those would impede qualified buyers from seeing your home.
What if my Santa Clara County house is listed but just not selling?
You can always sit down with your agent, and possibly your agent’s manager, and ask what’s happening. Did the market change? What’s the feedback from the agents who have shown the property? Do we need to improve the condition, make showings easier or change the price?
If it’s really bad, you may consider asking to be let out of your listing contract.
Maybe last time the agent you hired told you a price that you wanted to hear? Or that you could get top dollar but never fix it up, stage your home or leave for showings? Too many agents will tell you what you want to hear rather than what you need to hear. And you need to give them permission to be honest. And then, you need to be willing to act on it.
What next? You can try again, of course. Interview a few agents – perhaps 3 or 4, all from different brokerages. Unless of course you had a second choice last time whom you really liked…except for the advice….
Real estate listings are not for a fixed amount of time, by the way. Typically, listings run from 3-6 months. Usually, unless it’s a short sale, there’s no reason why it should go for a full year. Please note that in most listing contracts, there’s no cancellation clause for the consumer automatically written in. However, that can be added into the “other terms” section, and that’s something I usually do – create an “easy exit listing agreement” in case things change.
A few years ago, I co-authored a book: Get The Best Deal When Selling Your Home in Silicon Valley. You can find it online or at many local San Jose area bookstores. If you meet with me to discuss your home selling options and plans, I will be happy to provide you a copy of it as my gift to you.