Sellers who let their house sit on the market for months without price adjustments

[Anonymous]

Anonymous wrote:Or, house is paid off, relatives of owner (maybe passed away?) are in no rush and want to get a certain amount of money.

Or, like one of my relatives with 4 homes, they can wait it out to get the number they want

OK, but this doesn’t work! The longer a house sits, the less attractive it becomes to buyers because they correctly assume there’s something wrong with it or others have deemed it to be overpriced.

[Anonymous]

Anonymous wrote:Usually owned by a real estate agent or very rich who have no mortgage. They wait for the dumb money.

Economists found that real estate agents keep their own home on the market for something like 2.5x times as long before they do a price cut vs. regular sellers using an agent.

Yeah, it’s been documented that economists are cheap bastards, but that doesn’t mean they got any more for their house than someone who prices it appropriately from the get-go.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Or, house is paid off, relatives of owner (maybe passed away?) are in no rush and want to get a certain amount of money.

Or, like one of my relatives with 4 homes, they can wait it out to get the number they want

OK, but this doesn’t work! The longer a house sits, the less attractive it becomes to buyers because they correctly assume there’s something wrong with it or others have deemed it to be overpriced.

This has been on my mind lately. We're not looking to sell anytime soon, but our next door neighbor put his house on the market several weeks ago, and it's still an active listing. Based on comps in the area, I believe the house was initially listed at a fair price...but due to rising interest rates, there was a very modest price drop (less than $20K). In the past several months, most houses in our area go pending in less than 2 weeks and sell over list. I think my neighbor is in a position to hold the house till a good offer comes in (not some low-ball investor offer)...I'm just hoping that's the case and not because our location or house layout is not desirable. We're in one of the few decent areas where you can get a SFH for less than $700K and be close to a Metro....with all the whining about "no SFH under $1m" I am just shocked it was not snatched up or there were offers way over list...

[Anonymous]

You couldn’t be more wrong.

About half my neighborhood is elderly people and half young families.

When the old people want to downsize they find a house they want to buy somewhere warm and slowly move. They can afford both because the family house has been paid off for years. Spending a year snowbirding in the warm climate and coming home a few more times is not unwelcome—it probably sounds kind of nice.

Realistically, the old people are not going to care of their house sits on the market for a year or two if there’s any chance that they could get top dollar for their property.

Only the young families relocating feel pressure to sell quickly so they can roll over equity into their new house.

[Anonymous]

Anonymous wrote:You couldn’t be more wrong.

About half my neighborhood is elderly people and half young families.

When the old people want to downsize they find a house they want to buy somewhere warm and slowly move. They can afford both because the family house has been paid off for years. Spending a year snowbirding in the warm climate and coming home a few more times is not unwelcome—it probably sounds kind of nice.

Realistically, the old people are not going to care of their house sits on the market for a year or two if there’s any chance that they could get top dollar for their property.

Only the young families relocating feel pressure to sell quickly so they can roll over equity into their new house.

Seeing a house that's on the market for over a year is a serious turn off. Most buyers will assume something is wrong with it or the sellers. If the property is vacant because the sellers have moved out already I would also not touch it because long vacant properties tend to develop problems that aren't addressed fast enough. I would never touch a property that was on the market for more than 3-4 months at this point.

[Anonymous]

Anonymous wrote:What about when it’s developer owned? There are a couple of houses like this in my neighborhood and it seems like the developers would want to offload them, but they’re just sitting at ridiculously high asking prices.

I think that if it’s one of just a few new-build or down-to-the-studs renos in the neighborhood, the builder owners figure that they just need to be patient for their price-insensitive target buyer to show up, like someone being transferred from California.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Or, house is paid off, relatives of owner (maybe passed away?) are in no rush and want to get a certain amount of money.

Or, like one of my relatives with 4 homes, they can wait it out to get the number they want

OK, but this doesn’t work! The longer a house sits, the less attractive it becomes to buyers because they correctly assume there’s something wrong with it or others have deemed it to be overpriced.

It depends on the market. Sometimes the market catches up and they get their price. But like pp's said, the seller doesn't need to sell so they don't care. We might be a seller like that soon. We plan to put our beach house on the market in the Spring. If we get our price then great, but if not then we'll keep it and rent it. It's not worth it to me to let it go for less than my number.

[Anonymous]

I pass by a house like this every day in my neighborhood. The property is being sold by the 5 children of the original owners and has been sitting for months. It is priced in line with other fully renovated houses but the property hasn’t been updated in decades.

[Anonymous]

Maybe the algorithms in Zillow, etc. factor in the inflated list price then it becomes a self fulfilling prophecy.

[Anonymous]

Anonymous wrote:There's a house a couple doors down from me that has sat empty, on the market for years. It's interior looks straight out of an Eddie Bauer catalog and its got a Brady Bunch amount of bedrooms. It's got so much square footage it's almost repellant, and no pool. People looking to buy in that price range are mostly in their 40s and have 2-3 kids tops so they have no buyers. None. I asked a neighbor who knows them why they don't just sell and he said it's completely paid off and the family doesn't give a crap. It's owned by a famous person who lives someone else. I just see crews go into take care of it. The don't even bother with a "for sale" sign anymore.

But even a paid off house costs money. There’s taxes and maintenance, and the opportunity cost of the money that could be invested.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Or, house is paid off, relatives of owner (maybe passed away?) are in no rush and want to get a certain amount of money.

Or, like one of my relatives with 4 homes, they can wait it out to get the number they want

OK, but this doesn’t work! The longer a house sits, the less attractive it becomes to buyers because they correctly assume there’s something wrong with it or others have deemed it to be overpriced.

It depends on the market. Sometimes the market catches up and they get their price. But like pp's said, the seller doesn't need to sell so they don't care. We might be a seller like that soon. We plan to put our beach house on the market in the Spring. If we get our price then great, but if not then we'll keep it and rent it. It's not worth it to me to let it go for less than my number.

This. Also if someone puts their house on the market late ..ie mid summer/fall it’s a different pool of buyers than in late winter/early spring. The late summer/fall buyers are the ones who weren’t buying urgently or are bargain hunters or trying to buy into an area or larger house than they can afford. If the sellers drop their price another 10 or 20%, those buyers will offer even less and try to knock down the price through the inspection asking for credits for things that were disclosed We ran into this as sellers but had moved out of the area and just wanted to be done. Buyers got a great deal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Or, house is paid off, relatives of owner (maybe passed away?) are in no rush and want to get a certain amount of money.

Or, like one of my relatives with 4 homes, they can wait it out to get the number they want

OK, but this doesn’t work! The longer a house sits, the less attractive it becomes to buyers because they correctly assume there’s something wrong with it or others have deemed it to be overpriced.

It depends on the market. Sometimes the market catches up and they get their price. But like pp's said, the seller doesn't need to sell so they don't care. We might be a seller like that soon. We plan to put our beach house on the market in the Spring. If we get our price then great, but if not then we'll keep it and rent it. It's not worth it to me to let it go for less than my number.

This. Also if someone puts their house on the market late ..ie mid summer/fall it’s a different pool of buyers than in late winter/early spring. The late summer/fall buyers are the ones who weren’t buying urgently or are bargain hunters or trying to buy into an area or larger house than they can afford. If the sellers drop their price another 10 or 20%, those buyers will offer even less and try to knock down the price through the inspection asking for credits for things that were disclosed We ran into this as sellers but had moved out of the area and just wanted to be done. Buyers got a great deal.

Late summer/fall buyers are also those who got shut out of the spring/summer market in bidding wars and are now super eager (desperate?) to get a place. They're also folks who are less savvy and don't know that seasonal markets even exist.

[Anonymous]

Nope, we are usually late summer / fall buyers because we don't have kids, and want the price reductions. We aren't buying houses that are over priced.

We usually make a reasonable offer on a house that has been sitting, after trying to figure out why it has been sitting. And usually we end up buying the property after there has been more negotiating, because, as one pp pointed out, any house that has been sitting will develop new issues that will be discovered by a good home inspector.

In my experience it is usually senior citizens who bought at extremely low prices years ago, their estates who want an unrealistic top dollar, or people who did too much remodeling and need to get that money back.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You couldn’t be more wrong.

About half my neighborhood is elderly people and half young families.

When the old people want to downsize they find a house they want to buy somewhere warm and slowly move. They can afford both because the family house has been paid off for years. Spending a year snowbirding in the warm climate and coming home a few more times is not unwelcome—it probably sounds kind of nice.

Realistically, the old people are not going to care of their house sits on the market for a year or two if there’s any chance that they could get top dollar for their property.

Only the young families relocating feel pressure to sell quickly so they can roll over equity into their new house.

Seeing a house that's on the market for over a year is a serious turn off. Most buyers will assume something is wrong with it or the sellers. If the property is vacant because the sellers have moved out already I would also not touch it because long vacant properties tend to develop problems that aren't addressed fast enough. I would never touch a property that was on the market for more than 3-4 months at this point.

NP. This is not necessarily the case. There are people who don't need to sell, but live in a desireable neighborhood and can sit on their home. As has been pointed out, this is frequently older people who have no fixed timeline for moving, often people who migrate back and forth (snowbirds and other dual household families) and are willing to wait for the market to come to them.

Although a long listing will discourage some, there are also some people, who will visit the listing and then schedule an inspection of the property to determine if there really is something wrong with the property before they make that judgment. The older people have it listed high because they are expecting that they will get a lowbid offer and they are trying to provide insulation for the lower offer to accept. It's like any negotiations, you never go in with your final offer or acceptance because you expect the other party to negotiate over it. They don't want to list near where they are willing to accept because they don't want to get offers below their bottom line.

While having a high price and long listing is a red flag, it is not a death knell for the listing. I think it's worse to see a listing go under contract and then get relisted than to have a long listing. If it goes under contract and then comes back on the market, the buyer is more likely to have found something wrong. A long listing without offers is often passed over by people who thought the property was overpriced rather than people who found something wrong. But all it takes is the right buyer to enter the market and look at that neighborhood and be wiling to pay the higher price to get into the right location.

[Anonymous]

Anonymous wrote:Sometimes the sellers are warring heirs or divorced couple and someone is refusing to let go.

Or granny is in a nursing home and it has to be listed for the purpose of Medicaid qualification but there is no real desire to sell.