The city of Las Vegas has experienced a revitalized real estate market over the last couple of years. Sellers no longer had to anticipate buyers clobbering them over the head (so to speak) with low ball offers. Median list price has been rising and inventory shrunk to historic levels at one point.
Then why do I continue to come across homes that have languished on the market for hundreds of days? Every morning I look through expired listing and often call home owners. An expired listing is a home that did not sell in the allotted time when they signed with their brokerage-usually 6 months. The first thing I ask is why their home didn’t sell. I’m curious to know what they think the reason was. The answer I still get is “This market is lousy.”
This clearly hasn’t been true for quite some time, so I proceeded with my next question: How many showings did you get? The answer is almost always “We got a few at the start and hardly any after that.”
Before I go any further I should make it clear that I don't bother contacting homes that are poorly maintained or are filled with clutter. (Cluttered homes do not sell in my experience and buyers typically stay for a much shorter period of time when viewing them. I’m also not interested in being on an episode of Hoarders. Pawn Stars would be cool though, assuming I had an Elvis pinball machine, and needed extra cash… but I digress.)
In fact most of the homes I call are beautiful and show great. The owners have often been meticulous in both the care of their property and the staging. Yet…tumbleweeds.
Why is this? Who is to blame? Recently I turned down a gentleman that called me to list his property. His condo had been on the market for about 18 months with no luck. He switched Realtors, but after another 40 days he still had no action. He then found me online, was ready to fire his new agent and hire me. The first thing I did was go to the MLS and look up the property. It was clean, remodeled and had a new HVAC system.
Then I looked at the sales history. All comparable condos sold for 10% less than he was asking. Likewise he originally started out nearly 40% higher than his competition. When he did make price drops they were made begrudgingly and were ineffective.
In this instance his blame was laid solely on the Realtor. I agreed with only half of what he was saying. The Realtor’s pictures were poor, dark and lazy (he had actually used some older MLS photos, which clearly was unethical in my opinion as well.) However the Realtor was also suggesting a price reduction to reflect true market value and the owner scoffed. In that regard I agreed with the agent.
The owner felt that marketing was the problem: If only the Realtor had marketed the condo properly, it would be sold by now. Unfortunately it does not work that way when trying to sell a product. I could market a property to everybody living in Las Vegas and Henderson, but if the product is overpriced they are not going to buy it.
I showed him the comparable sales, some of which had sold much lower than his asking price. He told me again that his property was worth more and marketing would solve the problem. I wished him luck and did not take the listing.
Looking at his listing history showed an all too familiar pattern: A seller that started out too high, sometimes much too high. Then as price drops were made, even ones that appeared significant to the home owner, they were still not enough. At the end of the six month listing agreement, they fell off the MLS, completely unaware that they were never in the game to begin with.
Who is to blame for this scenario though? Ultimately I hold the real estate agents responsible. Comparable market analysis can be fairly easy to perform, especially for homes in master planned communities like Summerlin, Green Valley, Aliante and Rhodes Ranch, where there is frequent sales activity to pull from. An agent can have a good ballpark figure relatively quickly by accessing the MLS. How you arrived at the baseline price should be explained in a concise fashion, allowing the data to essentially do the talking. If the home owner cannot agree to a realistic market valuation of their home, then the Realtor should not take the listing because it’s not going to sell.
It’s that simple for both parties.
Me? I’m not interested in wasting your time or mine. I like to sell homes not just list them!