Stale Listings, How Long is Too Long to Have a House Listed For Sale?
Part of my morning ritual is to log on to our local Multiple Listing Service to see what is happening. How many new listings are there? How many homes have gone into contract?
When I was checking for homes for sale in Los Altos, I noticed a property that had been on the market for over two years. Yes, 2 years. Wow!
Since the average days on the market in Los altos has ranged from 30-60 days over the last 12 years, anything listed longer than 120 days could be considered a stale listing. This house has been on the market an unbelievable 12 times the average days on the market (DOM). Hello, wake up, earth to Houston, we have a problem.
FYI: the average DOM is the sum of the days on the market (DOM) for sold/listed properties divided by the count of sold/listed properties.
Buyers assume two things about stale listings; the seller is desperate resulting in a better deal for the buyer and/or there must be something seriously wrong with the home. Both of these assumptions may be wrong, but given evidence to the contrary, what would you think?
Is this a bad house? Could it be the marketing/pricing of the home? Or a combination of both?
Let’s start with the house. It was a new construction (decent quality and floorplan) home in an average location. When it hit the market 2 years ago, it was priced at the top end of the market (seller’s second mistake).
Was the house overpriced? Clearly.
Was the seller unmotivated/stubborn and/or “just testing the market?” In the beginning any of these could have been the case. However, after two years and a price drop of almost 1/3 the original list price, my guess is that the seller might be more motivated. Hum, given the option of either selling it or losing it to the bank, I would choose to sell it.
Was the property hard to show? No, it has been vacant for most of the time.
How has the home been exposed to the Internet? Outside of the first 2 months, the home’s MLS profile had no photos and/or virtual tour for almost a year. Since then it has had photos and a virtual tour. I “Googled” the property address and found little web exposure other than what the MLS produces via realtor IDX solutions and real estate aggregators. The fourth listing agent created a dedicated web page for the property.
Was the offer of commission to the cooperating broker too low? Maybe. At 2.5% (note, all commissions are negotiable), some brokers may not show the property.
What affect has our down real estate market had on this property? This one is tricky. When the home first hit the market, the market was quite active. However as time progressed, the market got worse. This house has chased the market down (and then some). That is why it is extremely important to price the property correctly the first time.
Currently there are 80 single family homes for sale in Los Altos. 27 properties have been on the market a minimum of 120 days, 11 have been on the market a minimum of 200 days and 4 have been on the market for over 1 year. If you’re one these “seasoned” listings, it’s time to get serious about whether you want to sell or not. If your a buyer, you may have a chance to make a great deal.
