Luxury homes often take longer to sell. Before slashing price, ask for some statistics from your agent you can actually use. If the average days on the market for a home in Oak Park is 45 (completely made up number), that's good to know, but not really usefull if the average home price in your area is 400K. You need to know what the days on the market are for homes in YOUR price range. Keep in mind that only about 1% of home buyers nationally are looking for million dollar homes.
Continually dropping the price can be a red flag for buyers who may wonder "what's wrong with it". Also, If someone is searching for a home between say 800k and 1.2M, they will never even see your home in a search to consider it.
You should really consider listing with a company that specializes in luxury homes. They will know how to market your home properly and know what information is actually useful for you. The luxury home market is different than a first time buyer's market, an REO market, ect. Look for an agent who has earned the ALHS (accredited luxury home specialist) designation. These agents have had special training and have access to marketing tools designed for the luxury home market.
Price is often the answer given, but that is simplistic and often does not get to the real reason for the non-sale.
First, if you are using a Realtor they should have given you the absorption rate for the neighborhood or subdivision you are in. They should also give you the absorption rate for the entire city or a portion of it. The absorption rate is the number of homes that have sold in a certain period. I generally look at 3 - 6 months depending on the size of the market. I then look at how many homes are for sale in that market right now. Put the number of sales into the number for sale and we can determine approximately how many months worth of inventory there is. There can be a big difference between one subdivison and another. The more inventory the harder and longer it will take to sell.
Next, have your Realtor show you the MLS listings for all the homes that compete with yours. First, see how many compete with yours in the particular subdivison. For example, if your home is 2,500 square feet, then look at the listings that are between 2,200 and 2,800 square feet. Then have the Realtor pull the listings of similar local subdivisions or neighborhoods. Look especially carefully at homes with the same floor plan or very similar. This is important as lets say that your home has been on the market for a while. If you look and see there are three others on the market for a lower price, then those homes will likely be looked first. Also drive by these homes and see what their curb appeal is compared to yours, and be honest. If you need to do a little fixing up, go ahead and do it. Ask your Realtor for ideas.
Have your Realtor show you all comparable recently sold listings and see how they compare with yours.
Also have your Realtor send you daily or weekly all new comparable listings that come on the market, that go under contract, or that sell and close. You can also get the ones that expire or are withdrawn. These are the ones that price, condition or marketing has prevented from selling.
There are two items that are under your control. They are price and the condition of the home. Make sure the price is not higher than the comparables, and then make sure the home is in showing condition versus living condition. The way most of us live daily is living condition. Then look at a model home and that is showing condition. Everything should shine, especially the kitchen and bathrooms. The clutter should be gone and that includes in the closets, on counters, and in the garage. Too much furniture can also make rooms look small. Consider putting stuff into storage. Depersonlize by taking down family photos and knick-knacks. With family photos a couple are fine, but too many and the buyer sees your family living there. You want them to see themselves living there.
Are you making the home easy to show? Does it have a lock box? Are you allowing showings with little notice? When you call your Realtor do they answer or call right back? If they don't are you losing showings because they don't answer the phone with the showing agents, or don't call them back in a timely fashion.
The last item is marketing and this is controlled by your Realtor and in some cases also by the real estate company.
There are vast differences in the amount of marketing each Realtor does. Many put up a sign, place an ad, put the listing on the local multiple listing service and a standard listing on Realtor.com. This is what some term a basic listing. This was enough in a seller market like 2005, but may not be enough in a buyers market such as we are in now.
There are many additional marketing methods that Realtors can use to market your home. These include the following and many more.
Showcase enhanced listings on Realtor.com
Company websites (not all real estate companies have a website)
Agents personal websites (not all have them)
Google pay per click
Print media advertising
Listing uploaded to various other websites such as Trulia, Craigslist, Oodle, Zillow, Point2Homes and many more.
Through IDX services the listings can also be fed to virtually every real estate companies and agent websites as shared listings. All agents and companies do not share their listings.
I estimated that my listings make it to over 40,000 websites
Some companies do not even put the listings on the MLS or Realtor.com. They only market on their website and in the newspaper. This gives the least exposure.
In closing, even though this is a buyers market and there is too much inventory, the homes that are priced right, in great condition and have a great marketing plan that is executed well, will sell relatively quickly at a good price.
When a home has not sold for a long time you really need to sit down with your Realtor to find out the reasons. Do it in a non-threatening environment as it should not be a blame game on either part.
Exposure includes advertising, marketing and ease of showing. Agents and buyers must know about the property and must be able to gain access to it.
You cannot sell an overpriced listing by advertising more. In fact, doing so is counterproductive. It lets more people know that your house is not as a buy as the competing property, and helps that buyer make a decision to buy that neighbor's house.
If you have a great price, but no one knows it, you have a limited buyer pool. Don't rely only on MLS. The market and world is a lot bigger than just MLS.
If you price right and get broad exposure, you can sell. Staging, presentation, de-cluttering, etc. will help you raise the right price a notch upward.
Take a look at what did sell in your price range, and slightly below. Ask yourself why the buyer voted with their buying dollars for that property in favor of yours.
If no property is selling, then you are moving with the tide at the pace of your market. In that case, patience.
Deborah Madey - Broker
Peninsula Realty Group, Inc
"If no property is selling, then you are moving with the tide at the pace of your market. In that case, patience."
Wow, great point! I think so many of us, even agents, have forgotten a few of the fundamentals of real estate. Real estate is not liquid! In most normal markets (emphasis on normal), you cannot just put it on the market and expect it to be gone in a few weeks. Nationwide, a healthy market and a healthly supply of homes is considered to be a six month supply. If homes in your area sell on average in less than 6 months, you are in a hot, swift moving market. If homes are generally taking longer than 6 months to sell, you are in a slower market. If the average is about 6 months in your area, homes are moving at a normal, steady pace....hence the reason most agents will ask for a minimum of a six month listing.
So, if you are priced right and you have good marketing and your property shows well, be patient and wait for your agents marketing to bring a buyer. Again, real estate is not liquid, you can not expect it to sell immediately because most people do not treat a home purchase as a disposable item....Generally, people do not buy a new home every year or two (the average is every 7 years).
So in addition to the absorption rate Jeff spoke of, find out what the average marketing time in your area is, list at a reasonable price, and then have patience!
People still think that they can get what the Jones or Smith up the street sold their home last month or last year. The reality of the situation is that buyers are more savy now, are getting more eduated and are listening to the mass media about the upcoming foreclosures crises that will hit everywhere (If they have'nt already hit your area) due to the sub prime fiasco. Armed with this knowlege buyers are looking for deals and waiting for price drops.
I doubt that you will find a Realtor to disagree with this comment, "Buying and selling is an emotional situation". As long as people think emotionally about the selling of a home the longer it will take to sell. It is a buyers market and will be for a long time. Sellers need to be more realistic about selling a home and stop going by what someone paid last month for the home down the street. More than likely, it means someone over paid instead of being patient (I doubt Realtors will agree with that comment).
Most importantly, interview SEVERAL Realtors that sell in your neighborhood before selecting one. They all call themselves pros so choose the one that has sold the most in your area.
Then again, what do I know. I only own several properties in CA and IL.
Looking for more deals in the Chicagoland area.
And yes, I have a very patient Realtor working for me.
My new question is, "Can a house be priced too low?" The comps came out to over $1 mil. and we had it priced to sell to begin with at $925,000. It is now down to $799,900! Houses OVER $1 mil in Oak Park ARE SELLING but houses in the $800s are not and the median home price is only $400k. Open Houses have been very positive except people say the taxes are too high or the house is too big.
What should I do now? Patience is a virtue but I can't afford that now. We pulled it off the market for a little while and have a fresh listing as of July 13th. But aside from open houses, we have only had one showing. Please anyone help me!
Being that you haven't referenced a certain home, it's hard to say. If you have a specific address and would like to take a first hand look at the home, I would be happy to assist you in viewing it in order for you to determine why it hasn't sold.
Feel free to contact me!
All the market exposure in the world cannot sell an overpriced home. It also does little good in lowering the price of a home in drips and drabs if it hasn't sold and you feel it the home has received considerable exposure.
I like to employ a price range while marketing my listings. Although not every seller agrees, homes priced in this manner seem to have the most acceptance in the marketplace. This type of pricing allows the market to decide upon the current value of the home and the seller can decide whether to sell or not at that price.
Feel free to contact me with any questions or concerns.
Why a home hasn't sold can be caused by a wide variety of factors, such as the ones previously mentioned. Without knowing the exact situation for this house, it is anyone's guess why it is still on the market.
Outstanding marketing exposure and pricing the property correctly when it is first listed are two main factors. Most activity and interest for a listing typically occur in the first two to three weeks. If there are no strong showings, offers or an accepted contracted within that initial time frame, it is a good idea to take a look at the marketing for the property as well as the list price.
Other factors that may impact a house selling can include; is the house accessible and easy to show, how has the weather been (especially in the winter months), holidays/vacations, and how the house is staged.
An agent should use a wide variety of marketing tools, personal skills, and professional networks to better position their listing to move.
If you would like more information about a particular home in Elgin, please let me know and my wife and I would be happy to help you out. We work out of offices in Addison and Bloomingdale. Feel free to visit our website for contact information.
Best of luck to you!