Turn Your Unsold Home into Profit
Is your home unsellable?
You may think so if the listing expired before you got a single decent offer. It can be disappointing and frustrating to be stuck with your old home for so long, not to mention costly. Before you give up hope or drastically reduce the price, there are some things you need to think about. Above all…
There are many reasons homes stay on the market and which make owners feel stuck for far longer than they should. Before you take any further steps in marketing your home, you’ll need to figure out why it didn’t sell and what you can do about it. Chances are, your home listing expired for one or more reasons in the following categories:
The home was not optimized for visitors
An ineffective agent
Good news! None of these errors are insurmountable. Think about what went wrong and plan ahead before you put the home back on the market.
The fact is that if you were happy with your home, someone else can be too. You just have to figure out exactly why visitors failed to see the potential. Or, you may have to find ways to attract more visitors in the first place.
For each reason that the home may be unsold, we can find more specific reasons and address them, so let’s look at each in turn.
What methods did you use to determine the list price for your home? Did you take a wild guess, or did you base the price on a quick appraisal? Both of these options are not ideal. The best way to list your home would be to know your market. Failing to understand the current market is a sure way to wind up with a home that doesn’t sell. That said, a good appraiser knows what to look for and how to compare your home with others on the market. Getting an objective opinion can be a good start if you found that the problem was...
Pricing too high
Want to turn off potential buyers? List your home far above market value. Some sellers think this is a great strategy for getting a high offer. Perhaps that was your thinking to? It makes sense. Set a high price so you have a lot of room to negotiate. After some back and forth, you’re sure to still get a sale above market value. Tom Ferry, a leading real estate marketer, calls this the “needle in the haystack approach: You’re hoping just the right buyer comes along and falls in love with your home enough to buy it at an above-market price.” Like the needle in a haystack, you have very low odds of making this trick work for you. It is extremely rare that this strategy will pay off.
In fact, overpriced homes often sell at below market value because the owners end up waiting a long time for buyers, and then become frustrated and desperate. Chances are you had few people even bothering to take a look at your home because it was too far beyond their budget. This can easily be an artificial barrier that you created. The buyer unwilling to look at a house 20% over market may have been readily able to pay 10% above if only they had been encouraged to look at a fairly priced home in the first place.
If you overpriced, you might be getting desperate already, so now’s the time to think about a new approach. If you want a good price, however, you may be wary of...
Pricing too low
It’s unlikely that the reason you failed to sell was because you set the price too low. Maybe you thought a low price would attract more visitors and encourage a bidding war. This can happen, but you need to be open to accepting a low price as well. Savvy buyers will recognize a ploy to encourage a bidding war and will not bother to visit your clearly undervalued home because they don’t trust the integrity of the seller.
More likely, buyers will assume that the low price tag means the home is not worth their time, not when there are other homes available in their price range.
But, there’s a difference between an extremely low price and a slightly low price.
Pricing only a little below market value is considered the best strategy by many experts. That’s because a low sale price works like bidding at an auction. According to a Northwestern University study, low opening bids encourage more people to get involved and bid more often. Adam Galinsky, one of the authors of the study, said low opening bids attract higher sale prices since people are more eager to get involved. “Because you lower barriers to an auction, you get them to invest time and resources … they get trapped.” Once they’ve invested at the attractive low price, they’ll feel committed to keep on bidding even when the cost becomes much higher.
Setting a below-market home price works in the same way. It encourages more visitors with more offers and a greater emotional investment in buying your home. The trick is to just make sure you don’t price TOO low.
Get it right the next time
The first thing to consider when choosing your new price is to understand what people are willing to pay right now. Did you do the research when your home first went up, and did you price accordingly? Was it too high or too low? Investigate the current sale prices of comparable homes to find out what is fair - don’t rely on the information you gathered the first time you put your home on the market!
If you’re in a hurry to sell, offer a slightly lower price than the competition. This is usually a good strategy no matter whether current demand is high or low. Once you reel prospects in with a bargain, keep them hooked with a home that looks beautiful.
The home itself
It’s easy to overlook the quality of the home when preparing to sell, but it’s also very easy to blame the condition of the home for buyers’ lack of interest. You shouldn’t have to. Aside from making your home clean and in working order, you need to make it look like a place people want to live. Sellers in a hurry can make things harder for themselves if they don’t take time to make the house perfect.
Is your home the spooky, dilapidated, old place where children’s frisbees are given up forever in fear of what might be lurking on the property? If your home has been for sale too long and you’ve already moved out, you better make sure it is properly maintained. No one is going to buy the run-down, scary old house on the corner!
If you just want the home sold, you can alert buyers that not everything is in the best shape. If you don’t tell them, they’ll find out anyway. The problem occurs when you don’t factor in repair costs and the negative perceptions of buyers. If you expect a high price on a fixer-upper, you will never find a buyer willing to pay. The repair costs can mount, and for every problem a buyer sees, they’ll be budgeting for two more to deal with.
You have two options: fix the problems yourself, or accept a low offer. If you decide to do the repairs, make sure you also consider the importance of appearance. Many sellers aren’t aware of how to create positive associations for visitors that will make them fall in love with the house. Beware of...
Not thinking about the buyer
Everyone has strong emotional attachments, good or bad, about their homes. A buyer is dying to find a home to fall in love with. Do what you can to make it your home that they imagine themselves living in.
If you’re a neat freak, you might think visitors want to see a home free of all signs of life, something neutral that they can fill with their own possessions. The truth is a little more complicated. You don’t want to bombard visitors with clutter and idiosyncratic decor, but, you do want them to see what it means to live in your house. So leave out some kids’ toys or tasteful paintings. Invite them to sit on a comfortable couch and to take a look at all the stuff you have room for in closets.
Make your home look clean and cozy. A cluttered home, or one filled with oddities, is sure to turn off buyers. If a buyer can’t stop thinking and wondering about what kind of shady things the previous owners were up to, they’ll never want to buy your home. But, If they can’t help but imagine how perfect their lives will be in this pristine home, then you’ve got yourself a sale.
Get it right the next time
Arrange some tasteful furniture
Create an environment that anyone would agree feels homey
Preparing a nice home for showings is just a part of another overlooked component of selling…
Marketing the home
What did you or your agent do to tell people about your home? Was it just an online listing? What set it apart from all the other listings? Were your home’s features fully declared, and were the photos doing the home justice?
There are two things you need from prospects before they even consider your home. You have to
Grab their attention
Hold their attention
Failure to grab buyer attention
Failure in the first stage means that you weren't able to make your home stand out from other listings. What media did your agent use for advertising, and were they able to explain why these ones are effective. Half of an agent’s job is marketing. If they were doing it right, you’d have had a lot of showings, and probably a few offers. If few prospects even saw your home, then it’s no wonder it didn’t sell.
Was your marketing limited to descriptions of the house only? Many buyers are looking for great location. Never underestimate the selling power of nearby amenities and services. Local schools, parks, stores, and entertainment matter as much as a new coat of paint.
Consider the two stages buyers go through when searching online. First, they need to find a home that matches their criteria - your home. But once they see the listing and browse the main points, what is keeping them interested? Overlooking this step leads to...
Failure to keep buyer attention.
Even if you found a way to make your home easy to find online and elsewhere, how did you provide an emotional attachment for buyers when they saw the listing online?
Want a quick sale? Then make sure you have the best representation of the home in photos and in the descriptions. Even the order of the photos can make a difference. Can you recreate the experience of walking through your house online? It’s easier than you think with drone technology. If your agent is really on top of their game, they’ll be incorporating what experts say is the most important new home marketing tool available. A virtual home experience, paired with beautiful written descriptions of the home can transport prospects into fantasies of their new life in your old house. Build up that fantasy and they will buy.
A big part of this stage of marketing comes from the agent experience and the way the home looks during a viewing. Can you back up your online descriptions with more intimate details? A good story or an interesting renovation has the most impact when prospects visit the home. Give your agent something exciting to show visitors and make them want to live there.
Get it right next time
Effective advertising takes money, so you or your agent needs to invest in tactics proven to work. Everything from where ads are posted, to the words used to describe the home, to images and video, to the price itself matters when you think about what makes a home attractive to buyers..
Was your home marketed well? Do you know if your agent did everything possible to get the word out, and did they listen to your concerns? If not, your expired listing may be the fault of ...
An ineffective agent
If you worked with an agent, did you do adequate research before hiring? Many sellers feel honour-bound to hire friends or family to help them sell their home, and still more hire an agent at random.
Hiring an unqualified agent
Selling a home is one of the largest business transactions you will ever make, so you want to make sure it’s done right. There’s nothing wrong with turning to family or helping out a friend. But were they ready to give you the service you needed? Was your home an easy sell, or did it require the knowledge and experience of a seasoned agent?
If your home hasn’t sold, then now is the time to look for someone new. You gave your cousin’s best-friend’s mother a chance, but she wasn’t ready. Hopefully, you knew the risk you were taking and planned ahead for a long sale process. You’ve done your good deed, but now it’s time to make a sale. Drop the agent who let you down and shop around for the one who will meet all your needs.
Ask questions suited to the problems you had selling your house the first time. Did visitors seem unimpressed in the home? Ask a potential agent what they can do to build up hype. Did your first agent underprice or overprice the home? Make sure the new agent is aware of how your home stacks up to others in the area and that they really know how to access and analyze the data.
If you hired a friend or family member, you could at least count on the fact that they were emotionally invested in selling your home. That’s often better than...
Hiring an uninterested agent
Don’t hire an agent based on track record alone. A busy agent with major deals on their plate may take you on to fill their roster and then completely fail to work on selling your home. Why would they waste effort on a $400,000 home when they’ve got half-a-dozen multi-million dollar mansions on their plate?
Ask your agent about their sales record and current listings to get a sense of yours is the kind of home they’ll put the effort into. Pay attention to how they treat you. Are they excited when you walk in the door, and are they giving you a lot of useful information? Or are they brushing you off, seemingly uncaring about you or your home? An agent’s attitude means everything. If they can’t show you, their client, a positive customer experience, then they won’t be very effective with potential buyers either. Find someone else quick!
Hiring the wrong agent for you
Not all agents are created equal, nor are all home sellers. Sometimes, failure to sell a home is not anyone’s fault really, but the result of team not working together. You and your agent are partners. That means you must see eye-to-eye and agree on what it takes to get your home sold. Did you have a vastly different price in mind than your agent? Was it a clash of personalities?
Whatever the reason, a breakdown in communication is a major cause of homes staying on the market too long. If you just didn’t like your agent, now you know you need to find an agent you can work with.
Get it right the next time
Chances are you’ve found yourself agreeing that one or more of the issues above explain why your house did not sell before now. No matter the reason, there is one simple solution that will all but guarantee you get your house sold soon after putting it on the market once more.
A qualified, experienced agent with the tools and knowledge to give you the ultimate sales experience. If you’d prefer to go it alone, make sure to read up on our critical tips for selling your home quickly and at the best price. Why not consider some trusted names in Canadian real estate, like Realtor, Century21, or Re/max?
Buyers are out there and there’s a buyer for every home. If you plan ahead and get the right advice, you’ll have multiple prospects fighting to buy your home. Take stock of what didn’t work before and take measures to get it right next time.
Consider this checklist of dos and don’ts to help you sell your house quickly:
Be reasonable about your home’s value
Ask your agent about marketing methods
Improve and beautify the home
Choose an agent that’s right for you
Get your home sold quickly and for a good price
Skimp on marketing
Ignore the buyer’s needs
Overlook critical repairs
Keep the home cluttered
Be hasty in choosing an agent
Get stuck with an unsold home