Back On The Market! © 2013Wayne D. Lewis, Sr.
Other Real Estate
Perspectives by Wayne Lewis:
http://makeyourbestoffer.blogspot.com/
http://makeyourbestoffer.blogspot.com/
Abstract: Wayne Lewis
looks at the issues surrounding homes that are taken off and then put back on
the real estate market.
“Back on the Market!”
Obviously that means that a home is back in play. It means that the sellers are willing to take
more chance that the perfect buyer will come along and buy their home. And of course, the obvious question often is:
why did it not sell? The answers to this
question are as varied as though who ask.
There are common reasons why a house doesn’t sell. We’ll discuss them here briefly. But knowing the answer(s) as to why a home
doesn’t sell is less complicated than the possible required action to make why
it didn’t sell right. We’ll try to
tackle that aspect as well. Let’s get
started.
Reasons why a house is taken off of the market:
- The house Sold! (Sort of) – When an offer is placed on a house, the process is broken into 2 aspects (a) pending contract and (b) Under Contract.
- Pending contract generally refers to a period between when the seller and purchaser have accepted agreement, pending an inspection, tentative loan approval, appraisal and/or clear title is established.
- Under Contract, generally refers to the period after which all contingencies referenced in (a) have been met, and both buyers and sellers are going forward to close on the sale of the property
- The house Sold-Definitely!-The home is off the market because, it literally SOLD! It is now in the possession of the new owners. However, new owners have been known to put a home back on the market in a short period time. We can discuss why that is another blog, but just remember the term “Flipping”.
- The house was Withdrawn-For reasons that maybe too many, homes are taken off of the market. But here are a few reasons why:
- A major repair is needed and having the home on the market could be counter productive;
- Sellers experience personal problems that may affect the marketing of the home, such as death, birth of a child, financial challenges, or tenant-related issues;
- Sellers may not be getting the type of offers, if any offers at all, on their properties, and decide to take their homes off of the market;
- Sellers may remove their homes from the market due to what they may perceive as poor service from their agent;
- Last, but surly not least, Sellers withdraw their homes from the market during holidays, special events, or because they need to regroup
- The house is an Expired listing- Homes are generally listed for 6 months. At the end of the listing period, the listing expires. Sellers may decide not to relist right away, but if they do, either with the same brokerage, or a different brokerage, the house comes back on the market.
|
|
# of Homes
|
Sq Ft
|
List Price
|
DOM
|
|
Snapshot 1
|
10
|
2094
|
$ 96,790
|
341
|
|
Snapshot 2
|
19
|
1816
|
$141,116
|
252
|
|
Snapshot 3
|
19
|
2590
|
$566,574
|
202
|
|
Total
|
48
|
|
$804,480
|
795
|
|
Average
|
16
|
2166
|
$268,160
|
265
|
|
|
|
|
|
|
What we don’t know, and would perhaps be a
violation of confidentiality in some cases, is why these homes were put back on
the market. But there is something else
to be noted: How long these homes were
on the market. In Snapshot 1, we see
that of the 10 homes that had been placed back on the market, they averaged 341
days. In snapshot 2, the homes placed back on the market averaged 252 days
between 19 homes, and the last snapshot of 19 homes, averaged 202 days, for a
total of 795 days, or more than 2 years.
Why would homes have to stay on the market that long? A look at the reasons above may reveal a clue. But remember, there are 48 homes in this
example. I only gave 4 sets of
reasons. We don’t know for sure why
these homes are on the market for so long, but it can always be narrowed down
to price.
Depending on the market, whether it is a sellers’ market or
a buyers’ market, each party on either side of the home buying process may have
their idea of what a home is truly worth.
Sad to say, the meeting of the minds isn’t always as easy as it
seems. Many homes, these homes not
particularly, are either overpriced by the seller, or the buyer believes that
the home is not worth what the list price reflects. While the seller may represent one side, they
are often up against a legion of buyers who today, do a lot of research, and
determine just how much they are willing to pay for a home.
For example, if one of the homes above from the table was
listed at as little as $50,000, or $500,000, the perspective of the buyers
remains the same. The buyers are well
informed, and know enough to say that the property is not worth nearly as much
as it is listed. On so rare occasion
that a buyer may put in an offer on otherwise overpriced home (to the buyer),
generally, buyers will not put an offer on a property because it too high, or
out of striking distance to discuss, or make an offer.
Conversely, a seller, who has a home that they have put a
tremendous amount of improvements in, in an area whether homes are not
comparably priced, the seller is expecting to get their investment back. The probability becomes unlikely when buyers
see a property that is overbuilt for an area, and even if they would love to
own, they are not going to put in an offer, and the sellers are not necessarily
going to lower the price on their homes.
What we basically have, is a standoff.
http://www.zillow.com/advice-thread/Homepath-home-back-on-the-market-with-several-offers/489983/
The table above reveals only 30 days of activity, only in
the New Orleans
It is not enough to put a home back on the market if it
isn’t in as good or better condition than when first listed. Unless the home is being sold subject to
renovations, or is rehab home, we should conclude that the home is move-in
ready. Putting a home back on the
market, at the same price, does nothing for the sale of the property. It basically sends a message to the potential
buyers that the sellers aren’t flexible.
Buyers who are routinely looking at properties in a given price range,
generally know more than the sellers about what their properties are worth, and
what they are willing to pay to obtain their property. So, the sellers, if they are going to keep
the property at the same price, should at least include an incentive. Like what?
Sellers should consider offering any of the following:
- Closing Costs (If allowable, between 3% to 6%)
- Moving Allowance (If allowable, dollar amount to be maxed out)
- Pay one year of the homeowner’s insurance (If allowable, dollar amount to be maxed out)
- Or, reduce the price of the property. A thirty day overview of homes on the market show that out of approximately 288 homes, the average days on the market were anywhere from 15 to 21 days during which prices were changed. Does that assure the properties will sell? Not necessarily, but it shows buyers that the sellers are willing to be flexible on pricing.[1]
Selling a home, for the most part, always comes down to
pricing. But the price must reflect what
the market is willing to bear. If
property stays on the market for an extended period of time, taking it off the
market maybe a good option. When a seller takes a property off of
the market is as much a key as when they put it back on the market.
In an earlier blog, I spoke of the home buying season. New
Orleans
There are no absolutes as to why a home is put back on the
market, but it is absolutely imperative that the seller be aware of what buyers
are expecting when a home is put back on the market. It may even be more crucial for a home that
is being placed back on the market to be at its best, perhaps more so than a
home that is being listed for the first time.
In Conclusion
Back on Market! The
phrase speaks for itself. What is behind
putting a property back on the market is a back story that few of us will ever
know. The reasons can be extremely
varied, but it is important for both sellers and buyers to understand what
expectations each have when the property is put back on the market. Whether a different price, a few repairs, or
regrouping from the holidays, buyers are expecting to get a great deal, because
they are anticipating that the sellers are putting a property back on the
market that is in as good condition or better before it was taken off.
Relates article: The Deal Fell Through © 2012 by Wayne D.
Lewis, Sr. at:
Disclaimer: Not an intent to solicit the business of other brokers or agents. Informattion deemed to be from reliable sources but not guaranteed. Your circumstances may differ. Consult with your Realtor or related professional for advice
[1] http://nom.mlxchange.com/ Copyright New
Orleans Metropolitan Association of REALTORS, Inc. All Rights Reserved.
Information Deemed Reliable, not Verified or Guaranteed. Users are Responsible
for Checking the Accuracy, Completeness, Currency, and Status of All
Information.
[i]
Criteria: Last 30 days, New Orleans
Labels: Back On the Market, Pending Contract, Under Contract
posted by Unknown @ 1:23 PM
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