“Why didn’t my San Jose home sell?” is starting to be heard across this sprawling Silicon Valley city as market conditions soften and the number of sales has been dropping.
If you’ve had your San Jose home listed for sale with a real estate professional but after a long while on the market it hasn’t sold, you are probably tired, discouraged, and maybe even angry. What went wrong? Isn’t this still a hot seller’s market?
First – San Jose real estate market conditions
Neither the sellers nor their Realtors control the market, but it is imperative that we understand the market if your home is to be properly positioned for a sale. Your own area may not be reflective of the city of San Jose as a whole, but this should give you some ideas on how things are faring, and you can check the link below for your area, whether it’s Berryessa, west SJ / Campbell area, Almaden, downtown, etc.
The facts, taken from the RE Report for San Jose real estate trends in Sept 2018:
- Yes, it is still a seller’s market, however, it has been cooling since the peak in spring.
- Prices are down. If the “comps” you’re looking at were sales from May or June, those prices are too high.
- Sales are down. Sellers must try harder to create the home that buyers want to buy and Realtors want to sell. In September 2017, there were 483 single family homes sold in San Jose. In September 2018, that number fell to 408, which is a 15.5% decline year over year. The condo and townhouse market was worse, with 220 of them sold in San Jose in Sept 2017, and 163 in September 2018, which is a 20.9% drop. Your job as a seller is tougher because buyers are not so keen to buy now as a year ago.
- Days on Market (DOM) are up, meaning that it’s taking longer to sell homes. For houses, the DOM has moved from 17 to 26 (an increase of 52%). For townhouses and condos, it’s jumped from 18 days to 22 days for Sept 2017 to Sept 2018, up 22.9%.
- Days of Inventory is perhaps the most dramatic, changing for single family homes from 9 in Sept 2017 to 53 in Sept 2018, a whopping surge of 487.6% year over year.
Those are some of the scary truths. At the same time, homes that sell quickly (within 2 or 3 weeks tops) are selling for more than list price most of the time. When properties go pending within 10 days, they often sell with multiple offers and few or no contingencies. For sellers, that’s usually the sweet spot and why agents often focus on selling in the shortest amount of time with the highest price. It’s not just a tag line, it’s the truth.
Second – when residential real estate doesn’t sell, what are the usual reasons?
Everyone likes “easy answers”, and the most common easy answer to the question of why the house is now an expired listing or one that doesn’t sell quickly is price. Most homes that don’t sell are overpriced. This is true but an oversimplification. It’s not the only answer, and it’s not the answer every single time. It is the one we see most often, though.
When selling a house, townhouse, or condominium in San Jose or Silicon Valley, the best starting point is to try to see things as the buyer does and to make your property competitive enough that the buyer will see it and be interested. That’s Job # 1: make the buyer and the buyer’s agent want to get in the door for a look in person.
It’s not price so much as value: The buyer is looking not for the cheapest property, but for the best value for the money. The buyer wants the best house, in the best location, with the best terms that he or she can buy.
Sellers, of course, want to sell the home for top dollar with the least hassle (meaning a smooth escrow and no nasty surprises). Sometimes, in the effort to sell for the highest possible price, the sellers simply aim too high – and it’s out of the buyer’s line of vision because it’s unrealistic. I wrote about this awhile back and invite you to read more about pricing in this post: What’s My Silicon Valley Home Worth? Estimating the Probable Buyer’s Value.
SOMETIMES IT’S NOT THE PRICE, IT’S THE ADVICE (or not taking it)
A good Realtor can help with realistic and competitive pricing, staging, repairs, etc., but only if the agent has your permission to be totally honest with the client. I literally once had a client say to me “I want you to be enthusiastic for my price”. That is like saying “tell me what I want to hear”. The seller has ideas and the agent is supposed to agree. Hiring a weak agent, or being a seller who doesn’t want to hear a professional’s input is going to be counter productive.
Sellers need to be strong enough to seek an unbiased professional’s input and guidance. Agents need to be strong enough to be the professionals they need to be and to give guidance that will help the sellers to achieve their goals. Better to hire a great agent, work together and encourage honesty (even if it’s not what you want to hear).
“Why didn’t my San Jose home sell?” Perhaps because you didn’t hire an agent with enough bravery to tell you the truth, or perhaps because you heard it but wouldn’t accept it. Of course, the first and second reasons – price and advice – are often connected.
OTHER CULPRITS CAUSING A HOME NOT TO SELL
In some cases, buyers never even visit the home. In others, they go but leave fast.
- Poor photos (professional photography is best) – this is SO IMPORTANT as your photos are your first Open House
- Poor staging (so the photos look bad and the home looks bad if shown)
- Difficult access, making it hard for buyers to see the home
- Poor descriptions, inaccurate MLS info (I have seen agents miss items like pools, garages, a full bath)
- Cluttered, dirty, dark homes
- Too many personal effects that distract the buyers or make them feel like they are intruding on your home rather than looking a townhouse, house, or condo that’s for sale
- Smelly homes (odors from pets, cooking, candles, incense, dirty diapers, you name it)
- Homes uncomfortably hot or cold due to not using heat or AC – they will leave fast if uncomfortable
- Sellers who don’t leave during showings (no lock box)
- Lack of marketing (some agents do not allow their listings to syndicate to sites such as Redfin, Trulia, Zillow)
- A low commission rate offered to buyers’ agents (most will prefer to show something else, if possible)
- Things that scare buyers or their agents, such as having to show a home with a dog loose in the house, having to disarm an alarm system, etc.
- A property needing a lot of repairs – that is also scary to buyers
- A home with no inspections – buyers are afraid to get into contract, then pay for inspections, only to learn that the home is in terrible shape
Third – what can be done to improve the odds that the home will sell?
If price is the problem, it’s often easier to increase perceived value than you might think. Agents around the globe will tell you, rightly, that a good price can fix any problem. But most sellers would like to know that lowering the price isn’t the only way to improve the home’s ability to sell.
How else can the home be seen as the better value? Here we need to take homes on a case-by-case basis. Here are a few of the areas I’ve seen that can be tweaked in order to make the property more appealing to home buyers:
- lots and lots of good quality marketing photos that convey your home and yard in the best possible light – when the photograph is taken, the house and yard should be immaculate: no cars in the driveway, no junk on the kitchen counters, toilet lids closed, the home uncluttered – it needs to look like you care!
- decluttering, depersonalizing and staging the home – it needs to be a neutral, clean palette so the buyers can envision themselves moving in
- the front yard needs to be perfect and perfectly inviting – no bushes growing over the sidewalk or front walkway, no chain link fences in the front yard (white picket is ok, chain link is not!), colorful annuals and more
- inside, the house should be light, bright and airy – curtains open, lights on, no stuffiness but instead fresh air and a clean and uncluttered house are all imperative (burning smelly candles can be a turnoff as buyers wonder what a seller is trying to hide)
- sellers need to be GONE during showings – lurking is creepy
- home in good repair – have pre-sale inspections and take care of the repairs!
- improve the wording in the MLS comments
- improve the commission or compensation offered to the buyer’s agent – when sales are down, agents are hungry and they will put a home on the ‘short list’ more quickly if the compensation is better
- improve the visibility on the web
- make sure that buyers and their agents don’t have to jump through too many hoops to see the home – they will skip it and go elsewhere if you do
Several times I’ve been the 2nd, 3rd or 4th agent and been able to get the house sold without doing a drastic price reduction by instead implementing some of the items listed above or others.
Fourth – if your home didn’t sell and you reach out to me…
If I were meeting with a homeowner whose house was listed on the MLS but did not sell, and is now an expired or cancelled listing, I would have a lot of questions to ask in order to help them assess what needs fixing:
- how many showings were there each week? (it’s one thing if the house is being shown but not getting any offers and of course a bigger problem if it’s not being shown at all)
- how was the listing price established? was it adjusted after a few weeks?
- what were the showing instructions – appointment only, appointment only through the listing agent, 48 hours notice required or any other “strict” showing instructions?
- what was the feedback like from the agents who showed the property to their buyers? what were the buyer objections?
- were there a lot of photos for the MLS and websites? (were they professionally taken?) Video tours don’t matter that much to buyers but good still photographs matter a lot….
- did the seller interview several Realtors? how was the last agent chosen? (sometimes the seller picks the agent who suggests the highest price or who charges the lowest commission)
- what was the commission rate offered to the buyer’s agent? how competitive was it?
If your home becomes an “expired listing”, you can be sure that agents will be phoning and dropping by, many hoping that by being persistent they will display their enthusiasm and tenacity and win an interview with you that way. (They have also all read that typically it takes hearing “no” 7 to 10 times before they’ll hear a “yes”.)
Many agents whose primary business plan is “working expireds” will focus almost exclusively on price. I sat in on a real estate training class where the instructor lectured that the only element of marketing that mattered was price – photos, fliers, Multiple Listing Service comments – all of them were not important, only price mattered. So beware of that angle. Often there are less expensive ways to make a buyer and the buyer’s agent want to show and then write an offer on a home. (Many sellers have the opposite approach and tend to believe that if the home didn’t sell, it was not advertised enough in the paper. Paper ads or magazine ads don’t sell houses, so forget that idea.)
If your home is now off market as a canceled or expired listing, you may grow weary of the calls, mailings and “pop bys” from all the agents who want your business. If you re list your home, with either the prior agent or a new one, the calls will stop. But in the meantime, unless you want to talk with a lot of these folks, you might just let all calls roll to voice mail until the flurry dies down in a few weeks.
If you would like to interview me (I’m assertive but not pushy) for your property in Santa Clara County, please call or email me. I will have a look at your property and give you a copy of my book to keep (whether you and I decide to work together or not), “Get The Best Deal When Selling Your Home in Silicon Valley”.
For more reading:
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See all Real estate in the Cambrian community.
(all data current as of 10/20/2018)
Listing information deemed reliable but not guaranteed. Read full disclaimer.