Days on market can be a good indicator of what's going on with a property before you even see it. With street views, interior photos, public records and access to comparable sales a savvy agent can tell you exactly why a house has been on the market for an extended amount of time. The myth is that the longer a home has been on the market, the better the deal is that you can get on it. While that may be true on an overpriced house, it's not very common. Truth is, there are NUMEROUS reasons a home stays on the market for an extended amount of time. I'll discuss the top three reasons:
OVERPRICED
If a home is overpriced, unless someone is paying cash for it, it will have a hard time selling if the sales price is over the appraised value. More important than the appraised value is what the market value is of the property. A home is only worth what buyers are willing to pay for it even if it will appraise for a higher amount. Sellers don't overprice their homes just because! Here are some common factors:
- Current mortgage amount
- Improvements / upgrades cost
- Meeting short sale requirements
- Testing market demand
- Seller/Agent unaware of comparable sales
- Title Issues / Liens on the property
CONDITION / FLOOR PLAN
The more work a property needs the smaller the number of buyers there are for it. Homes with more than $5K in repairs eliminate all FHA buyers. Rehab loans are available, but not very popular. Once a home needs more than $25K in repairs, most buyers are not only paying with cash but are (or are aspiring to become) familiar with construction. No matter the condition of a property, fire damage or even a tear down, if it's priced right there is a buyer for it. The actual style of the property can play into this as well. Homes with 1 bathroom that are OTP are difficult to sell in the suburbs which are (larger) family-oriented. Homes with no master bathroom or a shared master bath are obsolete floor plans which can be a hard sell. More recently, split foyer floor plans are not as popular ---especially those with only one bedroom on the upper level. The same goes for two-story homes where the master bedroom is the only bedroom on the main floor. Homes with a small master bedroom also have a VERY difficult time selling especially when they are in a higher price point.
EXTERNAL FACTORS
You may think a bad neighborhood is an automatic deterrent but not all the time. The vicinity from the less desirable things is the key. Having a crack house in the area isn't the issue but it being across the street or NEXT DOOR is. Being the 1st house in a neighborhood is usually a turn-off for most buyers inside a subdivision. Here are some common external factors that will affect how fast a house sells:
- Power lines / cell towers
- Main roads or highways with high road noise
- Retention ponds, water runoffs, sewer access drains
- Steep driveways or sloped backyards
- Surface street traffic during rush hour / weekends
- No similar properties around or near the property; house stands out too much
Luckily with the use of satellite views and even street view technology, you can identify these things without even visiting the property. Interior photos can also reveal a homes flaws even if there are no pics of the flaws. Some agents won't photograph the issues with the property--have you ever seen a listing with only exterior photos???
