So how exactly is a buyer’s market or seller’s market determined? Without getting into too many details, around Santa Barbara a buyer's market has more than three and a half months of available inventory based on closed sales. A seller's market is known as having less than two months of inventory based on closed sales, and a neutral (or balanced) market is defined as two to three and a half months of inventory based on closed sales.
The bottom line is that it's getting harder for sellers to sell their homes. Here are the top ten reasons why homes don’t sell and also what to do to get your home sold.
1. Photo Order
According to a 2015 Microsoft study the average attention span for a person is eight seconds and it gets shorter every year. The way most real estate apps and websites are set up is to show only the first photo of a home. To get to the next one, you need to click on the next one and so on.
Almost all Realtors and For Sale By Owner (FSBO) sellers put the front of the home as the first photo. Nearly all homes’ BEST photos aren’t the front of the house. The problem is that with an eight-second attention span, most potential buyers may never have the patience to get to the best photo or features of the home and will click to the next property.
Solution – Put the actual best pictures of the home as the first five photos. Most people that have clicked through the property's top five photos will continue to click away to see the others.
2. Not doing proper research and inspections before putting the home on the market
Most real estate agents don't check to see if there are any open permits, violations, or additional liens on the property. Additionally, many sellers aren't advised by their Realtors to conduct any pre-sale inspections. The problem is that this can lead to surprises once an offer has been accepted and the buyers begin their inspection period: there may be items of concern that come up that could have been disclosed up front which then lead to cancelation of the sale.
It's always a major headache and loss of money to have to put a home back on the market after a failed contract. The property becomes less desirable and more difficult to sell because the impression given is that there is something wrong with the home.
Solution – Have your Realtor guide you in the right direction to do your due diligence on your home before putting it on the market.
3. Your Realtor thinks he/she knows how to market on social media but really has no clue
I would say that only about 2 percent of Realtors know how to market effectively on social media. Most of them put too much information online, and the potential buyer has no reason to get more details from the Realtor/seller. The strategy would be okay if the property sold itself, but hardly any properties sell themselves.
The reason you want the customer to communicate with your Realtor is that he/she has a much better chance of answering questions and giving more benefits to purchase the home. If your agent is a pro at social media advertising, he/she will know everything about who is the most likely buyer to target. Click here for examples of my social media marketing campaign.
Solution – This solution is a lot more complicated than the other solutions. One of the most important things to do is not to give all of the information in the ad. Think of it like a movie preview that teases the buyer into contacting the agent for more details. Bottom line, interview agents until one proves that he/she knows exactly what they are talking about.
4. Price Band Errors
Many homes are listed at prices that have 9’s instead of whole numbers. For example, it is extremely common for a property to be listed at $549,999 instead of $550,000. Doing this is a major mistake! Most real estate websites and apps have price bands that end in whole numbers. For example, Zillow’s price bands are $500,000 to $550,000 and $550,000 to $600,000.
When a home is priced at $549,999, none of the buyers searching from $550,000 to $600,000 would see the home in that search. What makes it worse is that the lower price band buyer is at their limit. Whereas, the higher price banded buyer would be at their beginning point. If the property is on the market for $550,000 (instead of $549,999), both sets of customers would be able to see the home in their search.
Solution – If possible, price the home in a way that it will be in both price bands, $550,000 instead of $549,999.
5. Hiring a family member or a friend without interviewing other agents
More than ninety percent of all Realtors do the same thing - put up a FOR SALE sign, enter the home on the MLS, promote the home on a bunch of websites, hold an open house, advertise ineffectively on social media, and make a brochure for the home.
As home inventory increases, doing only these things will most probably not get the home sold. If the seller is lucky enough to sell the home using these techniques, the length of time for the sale will usually be much longer and the amount netted will be less.
Solution – Interview Realtors until an agent is found that has an effective marketing plan and testimonials from satisfied clients.
6. Not using professional photography and vieography
The average agent is incredibly cheap when it comes to spending money on marketing. Many will take the photos themselves on their iPhones, Androids, or their DSLR cameras. If they happen to do a video, they will usually do it on their own and do it as a slideshow with still photos.
A seller only has one chance to make a great first impression. Shooting photos and videos without a true professional will make a negative first impression.
Solution – Your agent needs to spend some money on professional services. I never think about the money I am spending when I have a listing. It is not uncommon for me to spend $1,000 or much more on marketing efforts for a property that I list. Sometimes I’ll be at property multiple days for more than ten hours just to make sure that the photos are PERFECT. Interview agents and find one that feels this same way - it will almost always help a home get sold.
7. Looking at the home through a Seller's eyes instead of a Buyer's eyes
With so many home automated sites out there, many times sellers and agents will look at the sites' estimates and average them out and get a list price for the home. Other times they will look at previous sales and determine the price based on those things.
The problem with these methods is that they are inconsistent. Sometimes Zillow’s (or similar sites) estimates are too high, sometimes too low, and sometimes just right. Zillow’s CEO, Spencer Rascoff, actually sold his home for forty percent less than the "Zestimate"
Solution – It is critical to look at what the current competition is for the subject property, what similar properties have recently sold, and what direction the market is heading.
8. Not spending the time to get the home properly prepared and staged before photos and videos
Almost all real estate agents are so worried about the average days their listing is on the market before it has an offer accepted, they speed up the process to get the home online. The majority of the time the home isn't ready to be shown or photo-ready.
A seller only has one chance to make a first impression to buyers that have many choices to select from.
Solution – If more time is spent upfront getting the home staged, personal photos removed, and decluttered, a great first impression will be made. And, many times the home will be on the market much less time than if it wasn’t done.
9. Not having the right network of buyers and agents that sell homes in your area
The average agent will email blast every client and every Realtor on his/her list on every listing they have for sale. It may sound like a good idea, but it is the worst idea. Almost always, there are a large number of people on an email list that aren't interested in the email. They could live in a different area, aren’t interested in the topic of the email, or numerous other reasons.
When people see emails from a sender that they aren’t interested in, many times they will ignore the rest of the emails sent over time, even the ones that they would have been interested in.
Solution – Your Realtor should categorize the recipients that receive email. For example, a person could be tagged as a buyer looking to purchase in Sonoma or a Realtor that sells homes in St. Helena. If the Realtor has a new listing in Kenwood, it won't make sense for him/her to email an agent in Calistoga.
Sending smaller email campaigns (also known as bursts) to relevant groups will increase the open rates substantially and will cause the emails to have a much lower chance of going to a spam folder.
The seller interviewing the Realtor should also make sure that that agent knows many real estate agents and clients that will help get the home sold.
10. Poor accessibility to view a home
Realtors and buyers have numerous choices to select when viewing homes. If an agent is scheduling four or five showings for his client and a home isn’t available to be seen with the others, the odds of that real estate agent coming back on another day just to see that home is highly unlikely.
Solution – Sellers should do what they can to make the house show ready at all times and have a plan that allows the home to be viewed with just a little notice. Give the Realtor a key to the home, so he or his team member can show the home when no one is at the house.
Interviewing agents and finding one that is aware of all of these things will help get the home sold in the quickest time frame.