What keeps listings from selling? In most cases, it’s the price, but it can also be due to a host of factors over which you as the listing agent have little control. What steps can you take to make sure that your listings end up “sold” rather than “expired”?
Part one of this series identified overpricing as the primary reason that a property may not sell. When a seller wants to overprice his listing, the agent has three viable options: (1) negotiate a lower price from the onset; (2) schedule regular price reductions as part of the actual listing agreement; or (3) walk away from the listing.
Even in the hottest markets where there is as a little as two months of inventory, this still means that only half of the listings sell each month and that the other half remain on the market. In order for the house to sell, even when the market is on fire, it must cross that threshold where it is in the top 50 percent of all listings in terms of price and value. If not, it can continue to sit on the market month after month with the listing ultimately expiring. So who is responsible for what in the transaction?
Factors that can’t be changed
The old adage that all that matters in real estate is location, location, location is still true. You can’t control where a property is located nor can you control the number of competing properties. Price is the one factor that takes both of these issues into account.
Buyers determine the price
As mentioned in part one, the buyers ultimately determine the price at which any given property will sell. Lenders and appraisers can influence this process as well. For example, if a property will require a 25 percent down payment for the buyer to obtain a conforming loan, this will shrink the potential buyer pool considerably.
Furthermore, if the market is red-hot, multiple offers may drive the price up well beyond what any of the current comps suggest that it should be. (One way to cope with this situation is to make sure the appraiser actually has a chance to see all the offers that were submitted.)
Agents control the marketing
As the agent, the one thing that you control is the marketing of the property. A recent discussion on the Facebook “Raise the Bar Group” highlighted how often agents fail to handle this part of their job in a professional and proficient fashion.
For years, the biggest complaint about real estate agents is that they fail to stay in touch with their clients. In fact, many agents note how often they can’t reach a listing agent to present an offer or how they picked up an expired listing from one of the area’s top producers who took the listing and did nothing beyond that.
Your role as a listing agent is to make sure that each of your listings has maximum exposure to the marketplace that results in maximum price. To provide this level of service in today’s digital environment, you need an integrated strategy that combines print, Web, social, video and mobile. If you’re not working with all five of these key components, you are not doing everything that you could be doing to provide the best marketing for your clients.
The sellers control the condition and the accessibility
If the sellers won’t deal with the cat odor or if they refuse to remove their three giant pit bulls from the property, there’s a high probability that the property won’t sell due to the condition and/or accessibility issues.
One of the biggest hurdles in selling a property occurs when the listing agent must accompany the buyer’s agent on all showings. Whenever possible, make the property as accessible as possible with a lockbox or key safe.
In the case where there are animals on the property, be frank: Failure to remove the animals and/or the smells that go with them can result in a substantial reduction in the amount of money that they will receive from their sale.
When the sellers are unable to spend money to improve the condition of the property, one way to market the property, especially at showings, is to create a virtual tour where the house is virtually staged. Many clients can’t see past the red flocked wallpaper and the purple carpets. When they see the house virtually staged with a product such as Obeo’s vStager, it makes it much easier for them to make the decision to buy. In fact, a number of the current online staging tools allow you to virtually decorate the house with actual furniture that the buyer can purchase.
To sum up, if you have a heated market and a listing that isn’t selling, be honest: Is it the price, the marketing, the condition, the accessibility or the location?
- If it’s the price, be aggressive about obtaining a price reduction sooner rather than later.
- If it’s the condition or accessibility, lay out the actual cost to the seller of not dealing with these issues.
- If it’s nothing you can control such as limited access to jumbo loans or the location, ask yourself, “Do you really want this listing that may expire at that high list price?” If not, pass and walk away.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of the National Association of Realtors’ No. 1 best-seller, “Real Estate Dough: Your Recipe for Real Estate Success.” Hear Bernice’s five-minute daily real estate show, just named “new and notable” by iTunes, at www.RealEstateCoachRadio.com.