In this Buyer’s Market it is very important to show lower numbers of “days on the market” for the home you’re selling.
Why does the number of days on the market matter? To simplify it all, it comes down to giving a sense of desperation to buyers.
A buyer who sees a home on the market for 60 days without it selling begins to wonder a couple of things; why isn’t it selling, what’s wrong with it, is it overpriced, is there something I don’t know about the property that others are finding out as they approach the buying move? Ask your agent to obtain a “Days on Market Evaluation” for you.
This is a simple procedure of taking the number of listings SOLD for the past 60 to 120 days or more and adding together the number of days the homes were on the market before it was listed as “Sale Pending”. Now divide that total by the total number of listings and you get the average days on the market for your area. It’s a simple and quick calculation that an agent can do for the area you’re looking in for any amount of time from 30 days to even up to six months; but realistically knowing the totals for the past 2-6 months is usually sufficient.
As a seller you obviously want your home to show well and come across as something everyone wants but unfortunately in today’s market you have some heavy competition. Often, a trick of the trade is to remove the listing from the market after a particular amount of days and then re-listing the home to make it look as though it’s once again new to the market. This helps keep your days on market number low and slightly more attractive to a buyer.
The only problem with this is that someone has been slightly interested in your home and has been watching it just to see what happens, they may question why it went off the market and shortly later came back in to it. Their first thought could be, “Wow, did someone buy it and think they got a real lemon so now they want to get out of it as soon as they can?” They could also think that the seller or agent is playing games and may be a little turned off with that type of seller. Then again, if the person watched the home for a number of weeks or even months and never acted perhaps they never will anyways.
Why Do Days On The Market Matter?
To a buyer days on the market matter because while you don’t necessarily care how long the “average” days on market may be, you do care how long the particular house you’re interested in has been on the market and compares to the average. If the house you’re interested in is a fairly new listing you’re probably going to want to act a little faster on it if you absolutely love it. You’re not going to put in a low-ball offer because if it’s new to the market someone else may see it and put a reasonable bid on it.
In the same sense, if the house has been on the market for a lot longer than the average you may want to figure out why. Is there something going on in the neighborhood area that you may have missed in the news; for example a new building that’s nearby that is housing inmates as a half-way house or an industrial area that’s possibly coming in nearby that people fear chemicals or heavy traffic, etc.
Could it possibly be because the seller really overpriced the home from the beginning and refuses to go lower? Are they simply not accepting any bids that are coming in because they’ve decided they don’t really want to move now? Is there a major issue with the home that comes up once the home inspection happens? So to the buyer the days on market become important because it can help you decide what price you’re going to offer and if you truly want the home after doing some homework on the surrounding area.
To a seller days on the market matter because the minute a buyer sees that your home has been on the market over the average, buyers think you’re desperate to get the home sold. They expect you to take a low bid and may nit-pick at problems with the house just because they think they can get away with it. Suddenly the roof that’s a little on the older side really needs to be replaced or that older furnace needs to be replaced before they move in or you should take that off the price of the house. That shag carpeting that may not be the most attractive look in the spare room suddenly becomes a tool for the buyer to use in order to get more for their money and should be replaced or, again take the money off the final price.
If the house was on the market new and someone found it quickly, knowing it met almost all of their criteria they would probably make a decent offer. Now that it is past the average number of days on market they feel a little less rushed to make a deal and will probably make an even lower offer than they would should you be above the average you would be approached in a whole different manner.
So Why Are Homes Sometimes On The Market Too Long?
One of the biggest reasons for a house to be on the market longer than average is simply because it has been overpriced. This generally happens when you have an agent who really doesn’t know how to value a home well or when an agent has suggest a price that the owner feels is way too low; even if the realtor has given proof and reasons for the price they’re suggesting you should ask for the home.
Many people put too much value on the heart strings, feelings, and memories attached to the home and feel it’s worth so much more. They sometimes think in terms of work they may have done themselves, recalled the back aching, time consuming work put into an update they’ve made and want compensated for updates they may have spent not only money but extensive amounts of time. In some instances it may simply be that the type of remodel that was made isn’t worthy of a large increase in the value of the home.
Many people do this with things like over-remodeling a kitchen or bathroom with expensive additions and such but no matter what the value of your home is going to be based upon those around it. You could create the Taj Mahal but if the median price of homes in your area is $150,000 and the high end is $200,00, there is no way you’re going to sell your home for $500,000 because you went overboard with additions, remodeling, and so on. Yes, the house may value at that amount if it were in another area where everyone put gourmet kitchens in and hot tubs but if your area isn’t like that, simply put, you’re homes not going to value higher and the updates and remodeling you’ve done won’t add that much value to your home.
Another reason why a home may stay on the market for longer than average is because the seller may want to test the waters to see if someone will take the bait and pay an excessively high price on their home. This is very often one of the biggest mistakes sellers can make and one of the most common ones too. They have dreams and ambitions of finding the perfect fool to pay well over what the value of the home is just because it’s a really nice house.
It’s pretty rare to find someone that’s foolish enough to fall for this “trick” and if the buyers are using a Buyer’s Agent they would have to be the world’s worst Buyer’s Agent out there to let that happen to their client.
Yet there are other times when simply put a home stays on the market for over the average time period because people are having a much harder time qualifying for a loan. Remember, in a Buyer’s Market such as the one we’re currently in, this means there’s a lot more houses available than there are buyers.
You may just be unlucky in the fact that with so many homes out there to sell the right seller simply hasn’t been there. As a buyer you may think this is a great home and just can’t figure out why the home hasn’t sold. You hold back thinking, what am I missing on this that everyone else must be seeing that’s making them not buy this house? As a buyer it can cause a little confusion and hesitancy.