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Dated: March 24 2021
What do you do if your house didn’t sell the first time?
Should you relist the home with another broker?
Most properties don’t sell the first time around. Over 60 percent of all listings don’t sell the first time it is introduced onto the market. Most of them require some sort of adjustments in price, broker, method before actually selling. Some common reasons inhibiting the sale of a property include the property being inaccessible, inadequate preparation, legal preventions (liens, violations, fines), disagreements (multiple owners, tenant issues), broker negligence, overpricing, poor market timing, and lack of property exposure.
The first question you should ask is whether the property was accessible. After all, you are selling a real estate property which means potential prospects will need to physically view the property before making a purchase decision. If your property wasn’t accessible, then that should be the first problem you should resolve. It could be as simple as a scheduling conflict. A good solution would be to give a trusted person or the real estate professional direct access. Remove any valuables and give a flexible showing schedule. This is crucial as many properties don’t get offers due to it being unavailable when buyers want to see the property. Buyers usually visit during their time off from work. Typically, weeknights and weekends. When buyers schedule appointments they are usually comparing between several properties scheduled at close time intervals. This is crucial since the chances of a buyer submitting an offer increase significantly after seeing multiple properties. If you are selling a property with an occupant, then it would be a good idea to let the tenant know ahead of time and try to work out accommodations. Working out with the tenant to have them vacant before the sale is also a rewarding idea since most homes sell at a higher price when it is vacated.
Once you have the property fully accessible the next focus should be on presentation. Having access is half of the access battle, having the property presentable is the other half. Have you ever been to a home where you can enter but are really limited to where you can go due to clutter? The property should be clean, organized, and presentable. An easy fix to get the place presentable at a budget would be to de-clutter. Clean out and store away any personal belongings, non-essential appliances, and furniture. If you have limited space, then it would still be a good idea to keep all non-essential items stored in one place of the home. It is better to have one designated messy area than an entire property scattered with the mess. Once the decluttering is finished the next focus is on cleaning and reorganizing. Keep everything neat and at a minimum. The goal is to have potential purchasers visit the place and be able to envision themselves living there. Good natural light is vital to setting a good impression. Not many people would prefer to have a place without natural light. If you are limited in natural light, then having light color décor and bright LED lighting as substitutes will do the trick. Some designer tricks to brighten up a dark area is to use shiny furniture and objects, reflective floor coating, wall paint, and also mirrors will add more light to space. These are all low-cost investments that will make the atmosphere comfortable. Lastly, make sure the place is odorless before inviting guests over. Opening windows to air out the home along with having air freshener, candle scent, are all good ways to improve the atmosphere.
Next up, check to see if you have any legal preventions that may impede your sale. Are there any violations on the property that will show up during a title search? A good place to start for NYC sellers would be to check the department of building and the housing preservation department website to see if you have any violations. If you see any open permits or active violations, then consulting with a specialist to getting them fixed will ensure a smooth process moving forward. Do you have any liens that you may be aware of? Any mortgage or loans you closed out years ago? Sometimes an old lien filed improperly can hinder a sale. It is true that a title search will reveal any of these issues but waiting until then could be too late sometimes. Knowing ahead of time can allow more time to prepare and save you a lot of stress when you already have plans for the work later in the process. If there is more than one owner on the property deed, then make sure you are in agreement before proceeding with the sale. Have clear communication on what are the mutually acceptable terms of a sale. You won’t have the luxury of speaking to each other first before deciding in some slower markets where one buyer is choosing between several properties. In that case, preparation and speed are key.
We have been going over preparation before relisting up until this point. Once you have done all proper preparation then the next part is coming up with a marketing plan. The first part of a marketing plan is choosing the right real estate professional to assist you on the sale. If you have already had the preparation part done correctly the first time and still didn’t sell, then chances are it has to do with your marketing plan and/or real estate broker on why the property didn’t sell. When choosing a broker, the first tip to look out for is to make sure your broker is full-time. There are tens of thousands of real estate license holders who are selling real estate on a part-time basis. You won’t get the proper help during a time of need with part-time salespeople. Next is to make sure you have an active broker who will be involved in the sale. Hiring a broker of a large firm, manager, or team lead won’t get you far if their primary goal may be to build and manage a real estate business as opposed to a broker whose primary focus is sales. Although checking realtor metrics and statistics on Zillow is a logical way to screen for a broker, one should considerably weigh it at 30-40 percent when choosing a broker. Punctuality, grit, perseverance, and professionalism can only be reflected during the interview process. If you get a good feeling and feel comfortable with a specific candidate then weighing them more would make sense since you would potentially partner with them for 6-12 months.
Perhaps the most important part of relisting the property onto the market is to come up with an effective marketing plan. Some sellers end up not selling the first time to overpricing the first time around. The scenario is as follows: “I price high and can always come down, but if I price low it would be difficult to go up. Plus, I have time. I’m not in a hurry.” Underestimate the importance of pricing and overestimating the advantage of having time is the most common reason why listings don’t sell. The real estate process is long drawn out and unforgiving. A mistake along the way will set you back months. An important detail is the market is everchanging and is never fixated. You are operating on moving grounds. When you saw your neighbor’s, house closed 2 months ago, chances are the neighbor receive that offer 3-4 months ago (Contract to close time). That could be 6 months ago. Within 6 months, the market could have appreciated or gone down. Your neighbor scenario could have been different. There could have been a shortage at the time and after the shortage went public more properties came onto market. Therefore, it is always safer to price fairly. When you price fairly you get multiple offers and enough momentum to help move your deal forward. Having time on your side is a good thing, but that should be an advantage that should be strategically used for the small chance that the deal faces a hick-up during the middle of the process. Not wasting it on overpricing and then chance not selling the property on time. Chances are you would be set back by 6-12 months and end up in a more dire situation. Underpricing has been a gimmick popularized again recently that prey on the uninformed and at best lying to oneself. The underlying value of the property is unchanged. The laws of economics work as follow. If your house is worth $100,000, then pricing it at $150,000 won’t bring you any interest. You would lower the price until you get to $100,000 before someone offers to buy it. If you underprice it at $50,000 you will create a bidding war until it closes in at a market value of $100,000. $100,000 is known as the equilibrium in economics or the point where supply and demand meet. The key is how can you take advantage of getting between the $100,000-$110,000 range (10 percent). That depends on your marketing plan.
Pricing fairly works better than overpricing and coming down and underpricing/getting into a bidding war. The former causes distrust and the latter causes resentment. If you can sell a house by simply signing an agreement, then this wouldn’t be an issue. But real estate is a long-term process that requires the wisdom of a short-term partnership. Another consideration is you should price even more competitively when you are relisting the property since you already spent time trying the overpricing strategy and may not be able to afford the same time and effort compared to the first time around.
After the price is set, the next step is to pick a good time to reintroduce the property back onto the market! Timing is important, knowing the situation of the time is of greater importance. How many similar properties are on the market? How many active buyers are looking for these types of properties? Generally speaking, data have shown the largest sales volume and highest sales price in the NYC vicinity during the spring period between late February to early June. The second burst of activity is between late August to mid-November. Summer and Winter have lower sales trends. Understanding this and working with the real estate professional to time the market will help improve the chances of favorable success. There isn’t anything that is absolute! It’s against conventional wisdom to put your house for sale in the cold winter during Christmas but if you are the only house and there are a few buyers looking, chances are they will value your property more. Explore your situation and plan ahead with your professional.
Last but not least is exposure. Part of the reason for hiring a real estate/marketing agency is to have expertise in marketing and promoting real estate property. Make sure you consult with your marketing professional on how they are planning to market the property and who are they going to present the property to. There isn’t a one size fit all approach in marketing either. If you are listing on the MLS and Zillow, then you have the standard coverage. For more information on how Zillow plays a role, feel free to check out my article on FSBO vs Broker. In NYC, there are a lot of niche markets. There are different demographics, social groups, and also the equivalents of those same groups in both primary users and investors. Each being fundamentally different in search preferences. A religious individual will prefer to be close to the house of worship and prefer the traditional methods of reach such as word of mouth in the community or religious center. A non-English speaking purchaser will probably only search for properties in their language magazine/newspaper or use their own social media in their language. A foreign exchange student will probably only search on the website in their native country. The foreign investors will be guided by the realtor of trust. A corporate investor will only know what is presented to them by the commercial brokers. The list goes on. Property sign, Open Houses, social media are all good additional tools to help improve coverage. However, the real estate professional has to be adept with them in order for it to be effective. I had a sale recently where the neighbor referred a friend to purchase the property. The friend wasn’t even on the market to buy but was influenced by the neighbor’s decision. That referral defeated all of the standard marketing tools I had. Some situations are just as exceptional.
The ultimate goal at the end of the day is to sell the property at the best price, under the best terms, and in the timeliest manner. Revisiting the checklist will radically improve your chance of success the second time around. Nonetheless, it would be most advisable to understand your situation and scenario and have a professional who is experienced enough to help you customize a plan that caters to your situation.
Peter began his career at a small real estate brokerage in 2009, during one of the most difficult markets in decades. While many other agents left the business, Peter decided he was going to persevere....