Why do some properties take so long to sell?
After offering advice to buyers purchasing real estate in Mexico, it seems only fair to discuss the issues for a seller in a foreign country.
You have decided to sell your home, you have contacted a local realtor and you are waiting for that buyer who is delirious about your home, offers you a cash deal equal to your asking price and wants to be flexible to your schedule. However there are trends I have observed that have helped a homeowner sell their home. An old expression in real estate is that “there is a set of buttocks for every seat.” And if you really want to maximize the return on your home investment, you need to have as many “buttocks” as possible interested in “sitting in your seat.”
Typical of sales on Lake Chapala during the last few years, the average amount of time a house was listed “prior to sale” was approximately 90 days. Of course, this is affected by the property’s location, price range in the market and overall real estate market factors, marketplace conditions and the realtor’s actions and reactions. How long a property remains on the market is also due to timing, as sales go through cycles during the year. It always puzzles me as to why some homes continue to be on the market with the same price, same condition and no changes to the property for more than a year – usually the homeowner just changes the realtor.
I have observed that many homeowners will set the listing price on their home too high to attract buyers who are interested in purchasing the property. This is due to the homeowner accepting the highest estimated listing price from realtors interviewed. Or the seller assumes that the price from a previous sale of a nearby property is applicable to his or her home. To determine the market value of a house, it is better to perform a Competitive Market Analysis (CMA) that investigates the property’s value using more than one method.
Typical CMA methods are first a calculation of replacement value using current land value and construction costs, plus a consideration for depreciation. The second method examines the return on investment, considering the income and market appreciation factors. The third method is to compare the property under investigation to similar properties sold. And the fourth method compares property to similar properties already on the market. This more thorough method of performing a comparative market analysis should ultimately provide a relatively narrow price range of where the property should enter the market and sell relatively quickly for a fair market price.
When the seller’s home enters the market, this is a critical time for the future sale of the house. It is new to the market. Information needs to be sent out to all agents who potentially could sell this property, to prospective buyers and to generate as much energy as possible over this impending sale. This is when perception of value can be highest, since the longer it remains on the market, the more likely prospective buyers may think the property may be overvalued.
Another important factor that can help sell the property is, of course, its appearance, commonly called “curb appeal.” Although some houses cannot be seen from the curb, first impressions are important. This is not simply how well the home is decorated, its layout or general cleanliness, however it is a factor of overall maintenance. Maintenance includes making sure that all the mechanical systems are operating satisfactorily and do not appear to need repairs or replacement. Items such as exterior or interior painting, roof sealing, replacing filters in the water system, replacing broken glass panes, filling concrete cracks, etc. are common issues addressed prior to the listing of the property. For some homeowners, pre-inspections prior to listing the property will demonstrate a good state of maintenance and will help anticipate and alleviate the doubts, fears or objections any potential buyer may have.