When a home lingers on the market for months, homeowners can suffer a range of unpleasant emotions–discouragement, frustration, embarrassment, panic and anger (especially at those people who boast, “My home sold in two days!”). The two-day sales make for interesting cocktail party conversation, but lightning-quick transactions distort the reality that homes sell in an average of eight weeks, according to the National Association of Realtors.
That may be the national average, but an informal poll of real estate agents in the Chicago area reveals that typical sales times vary by locality and price range.
“In the northwest suburbs, it takes three to six months from the day a home is listed until the closing,” says Scott Schmaren of Prudential Burnett Realty, Buffalo Grove.
In Naperville, reports Sonia Maschmeier with RE/MAX Affiliates, homes priced above $300,000 sell in about 75 days, while lower-bracket homes move in about 45 days. The past year has been “more of a buyer’s market,” observes Janet Knight-Carey of Prudential Burnett Realty in Libertyville. “Homes that would turn around in 60 days can last 120 days or longer.”
In the city, homes are moving in popular neighborhoods such as Lincoln Square in as little as two weeks, says Art Gregg of Baird & Warner City North office. However, whether or not a home is in a coveted area, asserts Gregg, if it still stands for sale after several months, sellers need to reassess their strategy. Here, a look at strategies to re-energize a stalled sale:
Although real estate agents can tick off a litany of problems that can inhibit a sale–everything from outdated decorating to nearby train tracks–they agree there’s only one factor that ultimately derails a sale, and that’s the price.
Price is the be-all and end-all, because even a property in poor condition will sell briskly if the price is low enough to compensate for its flaws.
Overpricing is a fairly common error, however. Sellers can vainly overestimate the worth of their home. Realtors who provide a “market analysis” that sets a home’s sale price based on comparisons with similar homes that have recently sold in the neighborhood can also overestimate. And, some real estate agents who are anxious to land a listing may cater to a seller’s vanity by padding the price tag.
Regardless of how a home came to be overpriced, the mistake will become clear within a month if the listing doesn’t generate at least a dozen showings, contends Lee West of RE/MAX Properties in La Grange. A real estate agent should then suggest a price reduction.
Sometimes, just a small price cut is enough to bring in buyers, maintain Schmaren. “I had a listing for $115,000 and we reduced it to $114,900 and it sold in the first showing,” he relates. Numbers that are multiples of ten or five can provide a “psychological barrier” to buyers on a budget.
It only tends to prolong the process if sellers tag a price much higher than they’d be willing to accept, with the idea that they’ll negotiate downward with a buyer, says Janet Knight-Carey of Prudential Burnett Realty, Libertyville. “I ask my sellers: `What is your bottom line?’ ” she relates. “If you get as close to that as possible and you have a buyer who falls in love with the property, you can get them where you want them to be.”
Indeed, a realistic price usually means a seller will get close to his asking amount in a shorter period, observes West. “Sellers in this area get an average of 95 percent of what they’re asking,” he says. “But if a home is fairly priced it can sell for 98 percent within two weeks to a month.”
A price adjustment can also reignite the sale in the realty community. That’s because with a new price, a real estate agent can introduce a home as a new listing in the computerized multiple listing system (MLS) that real estate agents rely upon to comprehensively catalog all homes for sale.
Such a reintroduction or relisting can help give a home a fresh start. An agent usually conducts another “brokers’ open house,” which allows area Realtors to tour the new listing. However, a serious buyer who’s represented by a diligent agent will learn how long a home has been on the market, and how many price adjustments it has been through. “A property’s history will trail you for four years (on computerized MLS),” notes Knight-Carey.
Does a long history on the MLS taint a house from the buyer’s perspective? It can prompt a buyer to take a tougher bargaining position.
“A good buyer’s broker will check the price that a home started out at,” says Knight-Carey, “and can then see the price changes.” A buyer-broker may tell his client, for example, that a seller has had a home on the market for six months, made two price adjustments recently, and now looks like he’s very ready to sell.
Although minor needed repairs or other cosmetic problems rarely derail a home’s sale if the property is priced right, say experts, a sale can be expedited if a home is well presented. It’s important, underscore Realtors, to react to other real estate agents’ and buyers’ criticisms of a property.
“You can have 20 to 40 brokers coming through on a brokers’ open house,” notes Zorisa Selak, an agent with Baird & Warner, Buffalo Grove. “They might complain about something that’s simple to fix, such as too much clutter or walls that need painting. A homeowner may not want to take his own Realtor’s word for it; sometimes an owner won’t listen to one Realtor. But it’s really important to listen when lots of people are saying the same thing.”
In areas where there’s a lot of competition from new construction, notes Maschmeier of RE/MAX Affiliates in Naperville, cosmetic touches may mean even more. “With new construction, everything is light and bright and white. New construction is very appealing to buyers, and when sellers are competing with that they really need to take a hard look at the condition of their property, and the price.”
If a seller isn’t under the gun to move, says Maschmeier, it may make sense to take a home off the market, make changes, and then reintroduce it on the market. However, she emphasizes that such a strategy is foolhardy unless the seller does some significant sprucing up.
At this time of year, notes Knight-Carey, weary buyers may be especially tempted to pull their home off the market, because the holiday season is traditionally a very slow time for home sales. However, she shares, “I encourage people not to take their home off at this time of year. Buyers looking at this time of year usually need to buy–they need to be in their new home in the next 60 days.”
Frustrated sellers are often tempted to change their real estate agent, once their contract with their listing agent has expired. It’s common, say Realtors, for sellers to have a “kill the messenger” mentality. That is, sellers ignore their original agent’s advice to adjust price or make repairs, but will act on the counsel of a new agent.
The only legitimate reason to make a switch, says Knight-Carey, is “when an agent hasn’t been properly marketing your home.”
Northbrook resident Scott Salzman decided to switch listing agents when his former Des Plaines condo stood on the market for six months.
“My first Realtor was doing the best that he could. He simply was a little inexperienced. He priced the condo at what he thought it was worth, and tried to have a lot of open houses,” Salzman says. “I selected my new Realtor because he said he didn’t believe in open houses. He reduced the price somewhat and then sent out direct mail to certain targeted areas and it sold right away.”
Indeed, it’s not just newspaper ads or open houses that can market a home. A creative real estate agent, says Knight-Carey, may send direct mail to homeowners or Realtors in locales where people might buy the home for sale. Residents of certain towns and neighborhoods within towns tend to move into the same regions, she explains.
Concludes Knight-Carey: “You have to look at a house not as your home, but as a house that needs to be sold,”
