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Friday, June 15, 2007

Is Your Arizona Home For Sale, But Not Selling?

Many Arizona homebuyers are currently asking themselves, "Why isn't my house selling?".  If your house is for sale and nobody's looking at it, or if it's been for sale longer than the average days on market for a similar home in your area, you need to re-evaluate and make changes to your marketing strategy.  Regardless of whether you're selling as a FSBO or if you have a Real Estate Agent, there may be a variety of reasons your home is not selling:   
  House For Sale sign

1.  Your home is overpriced.  This is by far the most common mistake I see sellers make.  There are a variety of tools, even for FSBOs, to help price your home properly.  Websites such as Zillow and HouseFront are available, but don't trust an online source alone.  Most REALTORS will provide you with a free Comparative Market Analysis (CMA) upon request.  Be sure to price your home in line with other similar properties for sale in your area.  And check out your competition because buyers will.  But don't just rely on other active listings when pricing your home, as they could be overpriced.  You should look very closely at the sale prices of similar homes which have sold in the last 3 months (the more recent, the better).  Also look at the prices of homes that are 'pending' sale, but realize the actual sale price is probably lower than the listing price.  And don't make the mistake of determining the price based on how much you need to get for your house.  Your needs have nothing to do with your home's worth.

2.  There are too many similar homes for sale in your area.  This is the case in many Valley neighborhoods right now.  We are in a buyer's market, which means there are more houses for sale than there are buyers.  The only way to overcome this is by making your home stand out from the competition.  A lower price is one way to stand out, but it's not the only way.  You can offer a higher commission or a bonus to the buyer's real estate agent as an incentive to show your home.  You can offer the buyers a financial incentive, other than a lower price, such as paying part or all of their closing costs, or buying down their mortgage interest rate.  You might purchase a home warranty for the buyers, or throw in new appliances or a carpet allowance.  Or, you can get creative and offer incentives like a swimming pool, new cars, vacations, plasma TVs, paying the buyer's mortgage or HOA dues for the first 6 months. You may also want to offer seller financing if you're able, or offer a lease option with rent credit.  Another way to stand out is by having a Pre-Listing Inspection (also called a Pre-Sale Inspection).  Your buyer will probably have a home inspection anyway, and there are many benefits to having it done yourself.  For one, you can advertise your house as a 'pre-inspected home'.

3.  Your home is in bad condition.  Some people look for fixer-uppers, but most people I deal with want a home that's basically move-in ready.  A home that's lacking maintenance or needs major repairs will be a turn-off to many buyers, even more so in areas that have brand new homes for sale.  If your home falls into this category, you have 2 choices: make repairs or price the home accordingly.  If you do sell your home as a fixer-upper, you will have to discount your price significantly.  Usually, you'll have to lower your price by much more than the cost of the necessary repairs to find someone willing to hassle with it.  If you decide to make repairs, be sure to hire licensed contractors, and keep your receipts.  Try to find contractors that offer warranties on their work, if possible, and make sure those warranties are transferable to the new owner when you sell your home.  New paint and new flooring are the best ways to spruce up the interior of your home. If you paint or make any other improvements, you should definitely stick to neutral colors - not necessarily white, just neutral.

4.  Your home doesn't show well.  There may be several reasons your home just doesn't show well.  It might be too dirty, too cluttered, too dark, too outdated, in too bad of condition (see #3 above), etc. Clean and de-clutter all rooms in your home, even the closets and garage.  If the garage is stuffed with boxes (of all the stuff you packed up to de-clutter the house), the garage will look much smaller than it is.  Rent a storage unit for all the excess stuff, if necessary.   If you don't have time to do serious house cleaning, hire a cleaning company to do a thorough cleaning.  Pay special attention to the bathrooms and the kitchen, as your buyers will scrutinize these 2 areas.  Don't forget things like dusting the baseboards, ceiling fans & plant shelves, cleaning the windows & window sills, cleaning appliances inside and out, etc.  Then the hard part - keep the house clean while it's on the market!  Replace all light bulbs and ensure all the lights are on when you show the house.  You may even want to consider having your home professionally staged, especially if it's vacant.  Staged homes tend to sell faster and for more money.  Take a look at your home from outside and evaluate its 'curb appeal'.  Be sure your front landscaping is cleaned up and looking good.  If a buyer doesn't like the way a house looks as he drives by, he may never stop to look inside.  Also make sure to rid your home of any odors.  Baking bread, cookies, brownies, etc. is a good way to improve the smell of your home (temporarily)!

5.  Your home is in an undesirable location.  If your home is in a bad location, there's not much you can do except lower the price to compensate for the bad location.  What's a bad location?  Your home might be in an undesirable part of town (such as an outlying area far away from Phoenix, or right next to a smelly dairy farm), or in an undesirable part of the neighborhood (i.e. backs up to a major street, or is right at the entrance to the neighborhood).  The old cliche rings true in good and bad real estate markets alike...LOCATION, LOCATION, LOCATION!

6.  Your home is not being properly marketed.  If your home is not on MLS, you're going to need some other very aggressive marketing ideas.  Even if you want to sell as a FSBO, at least find a REALTOR to put it on MLS for you.  Compare your MLS listing and/or flyers to that of the competition.  What features do similar homes (currently for sale) have compared to your home?  Look at the MLS listing and review important information such as the directions (this may sound stupid but I've seen many MLS listings with directions that don't get you anywhere near the house!).  Be sure your home's features are all mentioned.  And make sure your REALTOR includes several photos and a virtual tour on MLS.  You should also ask yourself these questions:  Are you taking advantage of online marketing?  Is your real estate agent actively marketing your home and how?  Are you holding open houses?  What kind of feedback are you getting from people who've viewed your home?

7.  Your home is not being made easily accessible to potential buyers.  We are in the NOW generation.  If I can't see your house when I want to see it, there are several other houses I can see.  Sellers who set restrictions on viewings usually don't get much traffic through their house.  When your house is for sale, it's not unusual for someone driving by to stop and knock on the door to ask if they can see your house.  While this might be a huge inconvenience, being stuck with a house you can't sell may be a bigger inconvenience.  Try to be as flexible as possible and don't set restrictions like, 'please give at least 2 hours notice' unless it's really necessary.  Also, make sure your pets are not a distraction during showings.  Not everybody loves big dogs.  And even a dog that you know is friendly could make potential buyers leave before they have a chance to fall in love with your home!

The first 2-3 weeks a house is on the market is CRITICAL - this is generally when it sees the most activity.  When a listing is new, all the REALTORS who work that area and the buyers who've been searching that area will stop by to look.  After that, the traffic will slow down.  If it stays on the market too long, it becomes a stale listing and then it becomes very difficult to attract buyers or Real Estate Agents.  So avoid the mistakes listed above and you'll be at the title company signing closing papers before you know it!

Related articles:
Sellers Need Edge in Arizona Real Estate Market (June 2006)
Arizona Sellers Turn to Pre-Listing Home Inspections in Slower Market (May 2006)

Visit Shannon Hubbard's Home Page     Written By: Shannon Hubbard
Realtor®-Investor

Great American Realty, Inc.

Cell: (480) 695-6672
Email me

Posted by Shannon Hubbard, AZ Realtor & Computer Guru on June 15, 2007 | Permalink

Comments

Great post. This blog has made weekly "must read" list.

Posted by: Louisville Real Estate | Jul 6, 2007 2:48:59 PM

Thank you Louisville Real Estate! :)

Posted by: Shannon Hubbard | Jul 12, 2007 8:53:37 AM

One of the most interesting posts I ever read. Next time will be easier. Thanks

Posted by: for sale | Jul 16, 2007 4:43:16 PM

That was a really nice post. Thanks for taking the time to put that together.

Posted by: Scottsdale Homes | Aug 5, 2007 6:18:01 PM

In today's market, pricing is EVERYTHING. If your home is not priced correctly, it will not sell. 2008-2009 are years that sellers can expect to get buyers looking for a deal. Why not be prepared by pricing your home to sell.

Thank you.

Jay Bingham

Posted by: Jay Bingham | Feb 7, 2008 3:39:11 PM

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