There are several reasons why a property that is listed for sale may stay long in the market with little or no interest from potential buyers. Our tendency to look for easy answers may lead us to wrong conclusions. A general answer that is external to the property may indicate where the likely problem may spring from, but definitely that cannot be a satisfactory answer.
In order to address the issue properly, we need to identify the reasons why the property has not been sold. Each property will be unique, but almost all issues can be resolved.
A property can be affected by external and internal factors. External factors such as the economy and government policies could positively or negatively affect the real estate market. When the economy is in recession, there is less money in circulation and more properties available for sale. The overall effect of this trend is that it may take more time before a property could get sold. Offers may come in trickles or none at all. In addition to this, government policies could lead to a series of reactions that makes it unattractive to may make in real estate.
It is interesting to note that no matter the state of the economy, properties are going to be sold or bought by people, even though it could be at a lesser rate than what was stated earlier. As long as properties around the area where your property is located are being sold, then your property can be sold. If your property is staying longer in the market than it should, other factors, rather than the economy, could be responsible for the investors’ lack of interest in your property.
There are times when the physical look of a property may repel buyers. Buyers often have some general expectations before inspecting a property. Visual appeal often affects more buyers than we would like to admit. If a property is structurally sound, this may not be known to the average buyer except he or she consults a technical expert. A property with structural defects that are not so obvious, but with aesthetic appeals, may attract more potential buyers than a structurally sound property. Buyers could sometimes disregard the building in favour of a strategic location.
However, the most important reason why many properties are not sold is inappropriate pricing. There is an appropriate price for every property based on the state of the economy, the state of the property, the location of the property, prices of the adjourning properties and its competitive advantage. The problem with most sellers is that they do not know how to best price their property and often they overprice it without regard to the above factors. This is an issue that should be dealt with at the inception.
While some sellers overprice their properties as a result of ignorance or inexperience, others create the situation for their agents to overprice. Some sellers are so attached to their property due to the amount of money they have spent on it or other personal considerations. They often unilaterally fix the price without listening to any contrary opinion from professionals.
In other instances, some sellers only give their properties to agents who quote the highest possible prices for them. These sellers open themselves to deception and they only discover the truth several months later when their property does not get sold.
There are a few signs that can give an indication that overpricing is the main reason why a property has not been sold. One of the most common indicators is when your property is priced higher than other properties for sale in your neighbourhood. Experienced real estate agents use a comparative analysis of property value in the neighbourhood to determine the price of any property they have for sale. An indication that your real estate agent has not done a thorough analysis is when your property is disproportionately higher in price than the neighbouring properties. The price will naturally drive people to lower priced properties and keep offers away from your property.
It is also an indication that your property is overpriced when you are receiving many low offers that are within a certain price range.
Offers are a form of feedback from the market. If there is a huge variation between your price and the offers that you are receiving, it shows that you have overpriced your property. You can also receive feedback from other real estate agents. You should not disregard the opinion of other real estate agents especially if they are all saying almost the same thing with regard to the value of your property. You need to realise that if the price is right, your property will attract buyers, no matter the downturn in the market.
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