Stale listings; Diamonds in the rough?

___

Published Date 6/17/2024

There’s a buyer for every home. Or is there? Realtor’s Kiri Blakely says Manchester, NH, currently holds the title of hottest market in the country, where homes typically sell after just 14 days on the market. So when a listing in this desirable city sits unsold for an inordinate length of time, there has to be something wrong with it, right?

It was a question Blakely asked upon spotting a three-bedroom, one-bath, 1,400-square-foot house in that locale listed nearly five months ago for $370,000 — far below Manchester’s median listing price of $425,000.

According to the listing agent, there is nothing wrong with this house. It has just been a matter of luck. After it was first listed in January for $340,000, the home sat for just 11 days before getting a buyer and a closing date was set. But the buyer passed away and back on the market it went. Another offer was quickly made — even higher than the first buyer’s. Then, a mere 48 hours from closing, the buyer had to back out after learning they’d been a victim of financial fraud.

The home was listed a third time and the agent bumped up the price to $370,000. But this time, the house sat—and, as the days on the market lengthened into the triple digits, the listing agent believed potential buyers must mistakenly believe something was seriously wrong with the property. Eventually the house attracted a third buyer and provided this sale makes it across the finish line, it suggests that stale listings like this one aren’t necessarily a bad deal for homebuyers. “On the contrary, with other buyers wary, it could be an opportunity to snap up a house in a hot market for a good price,” says Blakely.

“Buyers should not necessarily be turned off by a home that has spent a long time on the market,” says Realtor.com data analyst Hannah Jones. “It’s worth discussing with the seller’s agent.” She agrees with the listing agent: In certain circumstances, these homes can be deals hiding in plain sight. “The seller may be flexible on price or terms if they are eager to sell, so a long time on the market could play to the buyer’s benefit,” Jones points out.

So why do some homes stagnate in a robust market? The most common reasons are the condition of the house or the price—or both. “A home may take longer than expected to sell for a variety of reasons, but most boil down to price versus desirability,” Jones says. “A well-priced, move-in ready home is likely to sell quickly, while a home that needs work may sit longer.”

Other reasons may include liens on the property that must be paid off at closing, renovations that were done without the proper permits, and last but not least, a poor presentation.

Cara Ameer, a real estate agent licensed in both Florida and California, tells the tale of how she struggled to sell a 5,000-square-foot house in a prestigious gated community. Despite its views overlooking the golf course’s signature hole, it spent six years on the market—three of those with Ameer. “While there was nothing inherently wrong with the house, it had an outdated formal layout with a dining and living room, a grand bridal staircase, and a step-down living room with a bar area,” she says. “Everyone who saw it wanted to do so much to it,” she says. “They then became overwhelmed and concerned about the cost.”

When a buyer came along keen to do a gut renovation, the seller lowered the price. “Even if a home’s structural condition is fine, outdated design, poor staging, and subpar photos can also keep certain homes from grabbing the eyeballs they deserve,” says Blakely.

Stale listings scare buyers. Unless they look deeper, however, they may never find some of the best opportunities for a good old-fashioned sale — one where both parties can negotiate what they need, instead of another bidding war where the buyer offers as much as your bank account can stand. “Another benefit to stale listings is that buyers won’t feel pressured to rush to the closing table as quickly as possible, as they might be tempted to do in a hot market,” says Blakely, who adds that inspections can be done in a more timely manner and the seller might even might help with closing costs.

All that said, Jones stresses that buyers should always kick the tires on a house to make sure it’s not a lemon with serious problems.

Realtor, TBWS

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker - NY Department of Financial Services; Licensed Mortgage Banker - CT Department of Banking; Licensed Mortgage Banker - PA Department of Banking, Licensed Mortgage Lender – FL Office of Financial Regulation

All rates, fees and programs are subject to change without notice.