Five key reasons real estate doesn't sell

By: Robert J. Bruss: Inman News
"I followed your instructions and interviewed three successful local Realtors before listing my house for sale with the agent I liked best. The reasonable asking price was based on the CMAs (comparative market analysis) forms of the three agents. But it has now been almost 45 days since listing and I only received one 'low ball' purchase offer from a local bargain hunter. What's wrong? Why hasn't my house sold yet?"

That was an e-mail I recently received from an irate seller whose house is located in a very active local market.

Recent home sales statistics from the National Association of Realtors show nationwide new and resale home sales volume and prices are on target for another near-record year. But home sales are a very localized market.

At the recent Washington, D.C., annual conference of the National Association of Real Estate Editors, I learned how localized home sales markets can be. Some markets are booming (that's called a "seller's market" where there are more qualified buyers than homes available for sale). But there are other local "buyer's markets" with more homes listed for sale than there are qualified buyers.

Perhaps your home is in a local buyer's market, which requires extraordinary effort by your listing agent to get your house sold.

FIVE KEY REASONS SOME HOMES DON'T SELL. Experienced real estate agents know why some homes don't sell even during this peak spring and summer home sales season. Here are the five key reasons some homes don't sell:

1. THE ASKING PRICE IS TOO HIGH. Ask any experienced realty agent why a specific home hasn't sold. The answer will usually be: "The asking price is too high."

This presumes the home is (a) listed in the local MLS (multiple listing service) (b) listed on www.realtor.com (the most popular home sales Web site), (c) without restrictions for other agents showing the home on their Web sites, (d) the sales commission split is the customary 50-50 for the buyer's agent, and (e) there is full cooperation by the listing agent with buyer's agents.

2. THE LISTING AGENT IS UNCOOPERATIVE WITH OTHER AGENTS. If the listing agent is less than 100 percent cooperative with buyer's agents who represent prospective buyers for your home, that is often a major reason a home hasn't sold during this peak home sales season.

Most home sales involve two real estate agents. The listing agent represents the seller. The selling agent (often called a "buyer's agent") represents the buyer. Very rarely does the listing agent also represent the buyer (called a "dual agency").

Some listing agents are uncooperative with buyer's agents, hoping to "double end" the home sale and obtain all the commission rather than having to split it with a buyer's agent.

3. CONDITION OF THE RESIDENCE. The majority of home buyers want to purchase a house or condo, turn the key in the front door, and move in. When a home is in less than "model home" condition, it is known as a fixer-upper, which usually sells substantially below market value of a comparable home requiring zero fix-up work.

Yes, there are buyers for fixer houses. But they usually insist on a bargain purchase price because they will encounter the obvious need for renovations.

If I were forced to guesstimate the proportion of home buyers willing to purchase fix-up houses and condos, I suppose the percent of the home buyer market is perhaps only 10 percent at best. For this reason, it pays to fix up homes before putting them on the market for sale.

Experienced real estate agents recommend getting a home into tip-top condition before exposing it to the market. But this doesn't require major renovation. Serious clean-up and repairs are usually sufficient. Fresh paint inside and outside is mandatory if you want to get your home sold for top dollar in its present condition.

4. "AS IS" SALE CAN BE A BUYER TURN-OFF. Many home sellers just don't want to spend even minimal efforts to fix-up their homes for sale. When a home is advertised for sale "as is," that means the seller must disclose known defects but refuses to pay for any repairs.

Such properties can be incredible bargains for savvy buyers who are willing to purchase the home in its current condition. But this is not the way to earn top dollar.

5. THE LISTING AGENT CAN BE A HOME-SALE OBSTACLE. Many real estate agents are disliked by their fellow local agents. They are known as "difficult agents."

Home sellers who listed with these unpopular agents will never know.

To illustrate, in my community the top-sales Realtor discounts his sales commission. But he is extremely successful. He has 10 assistants. However, other local realty agents usually show his listings only if they have nothing else to show their prospective buyers. The primary reason is they will receive less than the customary 3 percent real estate sales commission split.

Closely related to a disliked or difficult listing agent is the problem of a listing agent who uses poor marketing methods. Although newspaper ads remain the most effective marketing method for home sales, over 70 percent of today's home buyers start their quest on the Internet, usually at www.realtor.com. A listing agent who doesn't use newspaper advertising, have their own Web site, and who doesn't put all their listings on the Internet is losing out for their buyers.

But the best listing agents use aggressive listing techniques, such as their personal Web sites, mailings to nearby homeowners (often the best source of prospective buyers who have friends who want to move into a neighborhood), relocation services with out-of-town buyers, weekend open houses, broker open houses (an extremely effective marketing technique), and at least weekly newspaper ads.

Luxury homes over $500,000 usually require extra promotion, such as color brochures, Internet virtual tours, and local real estate home buyer magazine ads.

SUMMARY: There might be several reasons a specific home that is listed for sale with a successful realty agent has not sold during this peak home sales season.

If your house or condo has not yet sold, and it has been listed for sale more than 45 days, it is time to discuss with the listing agent the five key reasons why homes don't sell. After discussion, if you have an ineffective agent, when your listing expires it is time to switch to a more effective listing agent.