If you're trying to sell your house and it seems like nearby places are selling but yours isn't, you may be wondering why. Fortunately, there are some objective factors that can help you evaluate what's wrong.
First, figure out how long most homes take to sell where you live. Your real estate agent can check the Multiple Listing Service (MLS) and tell you the average number of days properties are on the market in your area. If you've already passed the average "days on market" without any offers or real interest, then ask yourself:
Has your house been cleaned and made to look its best for showings?
Is the house free of any huge problems like expensive repair needs or location next to a freeway?
Has the house been marketed adequately (preferably including an attractive online presentation, with numerous photos) so that potentially interested buyers can find out about it?
If the answer to all of these is yes, then price may well be the culprit. True, when the market is down, houses can take a long time to sell, period. But if the price is right, interested buyers tend to show up eventually. If you're not even getting many people walking through and taking a look, that's a very good indicator that your house is overpriced.
Even if your price was appropriate at the time you listed, market values may have gone down since. Perhaps you've already noticed the trend yourself, as nearby "For Sale" signs have started sporting "Price Reduced" riders, or as you browse MLS listings and find better and better bargains.
The true test of whether your price is right is how it compares to similar properties that have recently sold. Faced with several homes with like features, most buyers will choose the one that appears to be the best value.
To see how your house measures up to the competition, ask your real estate agent to run a comparable market analysis (or CMA -- you should have seen one of these when you first set your price), or if you're selling FSBO, do one yourself. This is a report includes information about the selling price and features of nearby homes that have recently sold or whose sales are pending. Also visit local open houses yourself (or with your agent), to get a sense of how actual houses on the market compare to yours in price and other features.
How low should you go? Your price adjustment needs to be big enough to get buyers' attention -- at least raise their eyebrows, if not drop their jaws. That's especially true if your house has sat on the market for a long time. Real estate professionals and potential buyers may be dismissing it as unworthy of any buyer's attention, imagining, for example, that it has hidden problems that turned off other buyers, or that you've stubbornly refused to accept lower, more reasonable offers.
Of course, you don't want to go so low that you feel like you're giving the place away. Use the comparative market analysis again in setting your new price.
Because no two properties are exactly alike, you may have to make price adjustments to account for those differences. For example, if one comparable property is smaller than yours, that probably increases the relative value of your home. The more recently the homes on the CMA have sold and the more similar they are to yours, the more relevant they are to setting your price.
For more ideas to help your house sell quickly when times are tough, check out Selling Your House in a Tough Market: 10 Strategies That Work, by Ilona Bray and Alayna Schroeder (Nolo), available May 2009.
Copyright 2009 Nolo For more information visit Nolo Press