Why a Home Won't Sell
An article in our local paper says that the average sale price in our city of was $462,294.
The average price for a home means nothing, but it is a way to compare sales prices year over year. The truth is that there is no "average house".
It's kind of like saying that the average car is a black 2005 Honda Civic.
When a realtor prices a home to sell, he takes the average price that a similar home sold for in the last 30 or 60 days.
He then divides the square footage of the recently sold homes, by the price that they sold for. Then he comes up with a number like $240. a square foot.
Your 1800 square foot 2 storey will sell for 1800 x 240 = $432,000.
Easy. Keeping in mind that there is no average house, we must extrapolate more information from the recent similar sold listings.
Did the recent sold comps (comparables) back onto a school, railroad track, a public urban development (condo development), a lake, other homes with a higher elevation? How do you suppose each of those scenarios would affect the price of the home, either positively or negatively?
Did the recent sold comps have a developed basement? Was it finished by a builder, developer, or the home owner who thinks he can hang drywall, and hook up a few lights himself (usually without permits)? How does that affect the price of the home?
Did the recent sold comps have built in cabinetry, bookshelves, walk in tiled showers, fireplaces, finished garage?
The questions can be endless.
A good realtor will go through your home and add and subtract from the base (average price) to determine the actual market value.
Many proud homeowners don't realize that their home is usually quite similar to the average home and not $40,000 more than the one that just sold down the street, because it becomes personal.
It is common ownership bias. It is just human nature. Our egos get int the way, and glaze over the reality.
A good realtor will give you the real facts. A good realtor will give you an accurate market value for your home. Hopefully the buyer's realtor does the same evaluation, and if done right, you can expect a fair offer within a short period of time. SUCCESS!
The problem we have is that the realtor's number (price) and the home owner's number are usually far apart. The realtor wants the listing, so he takes it at the clients price, and after it expires in 120 days with 6 showings, the homeowner thinks the realtor didn't do their job (We realtors can't make someone buy an overpriced home...the buyers realtor doesn't want to make an offer because it will be too low and will definitely offend the seller).
But the homeowner realizes that the first realtor was right, and relents a bit on the pricing for the next realtor. They adjust the price lower by 20k and after a few more months finally get an offer that is 20k less than they will take.
They get personally offended by the offer price which is what the first agent told them 6 months ago, but did not want to listen.
Then something happens at around the 9 month mark. The reason that they originally wanted to sell in the first place has been gnawing at them for almost a year. Frustration, showings at all hours with whole home clean ups in between.
They call the realtor (if might be the 3rd agent by now...they are all the same!) and say...
"Just sell this house so we can move on".
They lower the price again, and the buyers realtor see that they must be getting desperate, judging by the days on the market, change of realtors, and several price reductions. Month 11 comes, and they finally accept another "lowball' offer. But they have had it. It's not the money at this point. They just want out.
They sell for way lower than the first offer, and under what the original realtor told them it will sell for.
Kind of a sad story, but every realtor who has been selling for more than a couple of years has experienced this. A good realtor really wants our clients to do well, because you will tell your friends, and use us again next time you want to buy or sell. If we can convince our clients that we really know what we are talking about, then their house will sell. For the most money in the least amount of time.