In Red-Hot Real Estate Markets, Why Do Certain Homes Just Not Sell?

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 for 144 days, there has to be something wrong with it, right?

That’s the question we asked upon spotting a three-bedroom, one-bath, 1,400-square-foot house on Central Street listed nearly five months ago for $370,000. That’s far below Manchester’s median listing price of $425,000.

So why has this house sat for so long?

According to listing agent Zyel Silva, with Chinatti Realty, there is nothing wrong with this house.

Rather, the property has simply had a “ton of bad luck.”

After it was first listed in January for $340,000, the home sat for just 11 days before going under contract for over the asking price. The closing was set for Easter weekend.

“Unfortunately, our buyer passed away,” says Silva. “It was super unfortunate, but, of course, we had to go back onto the market.”

This time, the home sat for only four days before a second buyer made an offer that was even higher than the first buyer’s.

“All was going well,” says Silva. They were a mere 48 hours away from closing. Then the buyer had to back out after learning they’d been a victim of financial fraud.

After this second deal fell through, Silva listed the home yet again. Encouraged by the previous offers over the list price, Silva 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, Silva theorizes that people must mistakenly believe something is seriously wrong with the property. (He concedes the higher price might have slowed things down, too.)

In June, however, the house attracted a third buyer and is currently under contract.

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.

“When a house has been on the market for quite some time, the seller is typically more apt to take an offer that is a little below market rate,” Silva says.

Why listings that linger should not be overlooked

“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.”

And she echoes Silva: 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.

The most common reasons for a stagnating listing 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.”

Liens on a property where money is owed and must be paid off at closing can also deter prospective homebuyers.

In Brooklyn, for instance, a single-family home in a desirable neighborhood lingered on and off the market for eight years and went through several real estate agents before landing a buyer.

Co-agent Shanell Reyes, of Bizzarro Real Estate Agency, revealed to Realtor.com that the main snag was the home’s basement renovations, which were done without the proper permits, resulting in building violations totaling over $100,000.

The violations meant that no bank would touch the house. The seller was unable to fix the violations because of the high cost.

Finally, a determined buyer came along who managed to find a bank that would finance the deal. It closed for $1.1 million, down from the original $2 million price in 2016.

“This house really sold for below its true value,” says Reyes.

Records show the three-bedroom home with a coveted two-car garage and outdoor space sold for 20% less than comparable properties.

How poor presentation can make a house sit on the market

Cara Ameer, a real estate agent licensed in both Florida and California, once struggled to sell a 5,000-square-foot house in a prestigious gated community in Ponte Vedra Beach.

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.

“Everyone who saw it wanted to do so much to it,” she says. “They then became overwhelmed and concerned about the cost.”

Eventually, a buyer came along keen to do a gut renovation, and the seller came down on 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.

Case in point? While homes in Miami Beach typically sell in 68 days, Eloy Carmenate and Mick Duchon of The Corcoran Group recount the story of their two-bedroom, two-bath condo that sat for three years.

A renter had her office set up in the dining room with clutter strewed about.

Once the renter moved out and the seller was able to stage the unit, it sold quickly.

Why homebuyers shouldn’t overlook stale listings

Cedric Stewart, a real estate agent at Entourage RD of Keller Williams in Washington, DC, even advises buyers to go straight to the lingering listings if they’re looking for a deal.

“Buyers should target homes that have been listed for sale a while, especially in a hot market,” he says. “Those provide the best opportunity for a good old-fashioned sale where both parties can negotiate what they need, instead of another bidding war where you just offer as much as your bank account can stand.”

By: Kiri Blakeley I NY Post I June 12, 2024