Sellers in hot real estate markets naturally wonder what’s wrong when they don’t receive multiple offers. Even in brisk real estate markets, not all homes receive equal attention. Still, most sellers would rather have their homes be the coveted ones.
Whether you will receive multiple offers depends on several things. One is the nature of the local real estate market. If there are more buyers than sellers, you tend to see more multiple offers. But this doesn’t mean that every house will sell this way.
Even in a seller’s market, some price ranges will be more active than others. For instance, you have a better chance of receiving multiple offers if you’re selling an entry-level home than you will if you’re selling an upper-tier property. There are usually fewer buyers for such properties.
The condition and location of your property will have a big effect on the market response. Generally, the listings that are in the best condition attract the most attention. Listings in prime locations–near transportation and shopping or with a good school district–will attract more buyers than will listings in less desirable locations.
Pricing is key to the multiple offer equation. Many of the listings that sell with multiple offers and for over the asking price are listed under market value. In fact, some sellers intentionally set their price low to attract more interest.
This strategy can be risky, however, if you list for less than you will be willing to accept. Since not every listing is selling with multiple offers, you could end up with just one offer that’s well below what you can live with.
Condition is important, but even fixer-uppers can draw multiple offers if they’re priced right. If your home needs a lot of work, it’s a good idea to have credible reports available that describe the condition, including the cost to make necessary repairs. The reports should be taken into account when you select a list price. Make sure that prospective buyers review these reports before they make an offer.
Well-priced fixer listings are popular with buyers who are searching for an investment that has upside potential. A harder sell is listings that have an incurable defect, like a location near a noisy freeway or street. Deferred maintenance can be corrected, but there’s not much you can do to remove the highway. A listing with such a defect might not receive multiple offers even if it’s priced right, is in good condition and is well located.
Lack of adequate exposure to the market can also be the cause of a listing receiving minimal interest. It’s unlikely that your home will receive multiple offers if no one is aware that it is for sale.
But, if you’re selling a home in a hot seller’s market and you’re not getting much buyer interest, the most likely reason for this is that your home is priced too high for the market. In a market where multiple offers are common, buyers often shy away from over-priced listings. They assume that the sellers are hoping for an even higher price, which is not warranted.
The best way to encourage more activity is to reduce your asking price. And, the sooner you do it, the better. Remember, you’ll be competing with new listings that are coming on the market. These listings will receive more attention because they’re new.
THE CLOSING: For a price reduction to be effective, it needs to be significant. And, it needs to be aggressively promoted. In some cases, over-priced listings do receive more than one offer after the price is reduced.
Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.
***
What’s your opinion? Send your Letter to the Editor to newsroom@inman.com.
