by Neil Jenman
Reading time: Apx 5.5 mins
There’s a new challenge in the real estate market: Homes are taking longer to sell.
In Australia, it’s accepted that the average time to sell a home is about three weeks. Even less in the boom.
But now many homes are staying on the market for many months.
Especially two types of homes – the most beautiful and the most recently purchased.
Beautiful homes command a higher price. But this can mean a longer time to sell. Quite simply, there are more poor people than rich people. Although being poor in today’s real estate market absurdly means spending less than a million dollars.
A booming market is always tough for buyers. Thousands have watched in despair as prices have climbed beyond their reach.
But now, in many areas, things have changed. It’s common to see homes selling for hundreds of thousands of dollars below hopes of sellers – especially at auction, the worst way to sell. In a declining market, selling by auction is financial madness – no matter what agents claim.
Another type of home is one where the sellers bought in the peak of the boom. Many agents are saying the same: If you bought around 2018 – 2021 (depending on your area) – prices are reportedly down as much as 10 per cent.
Australians – especially when selling or buying property – are an impatient lot.
Investors are the worst, especially novice investors. They seem to think it’s smart to buy property. But that’s ridiculous. It takes little intelligence to succumb to pressure from a salesperson who says you’ve got a once-in-a-lifetime opportunity. Thousands of Australians buy property without adequate thought or research. They spend years lamenting their foolishness.
Now, let’s move to the sellers.
By far, the second worst mistake when selling a home is impatience (the worst is choosing the wrong agent).
The ‘herd mentality’ – plus pressure from hungry agents desperate for a commission – causes many sellers to get flustered if they haven’t sold within a month. They fall for the comparison trap. The place up the street – not nearly as good as theirs – sold faster for more money. It’s human nature to believe our own homes are worth more. As happens with most everything else in our life.
But in real estate, it’s hard to argue with reality. Sometimes it’s hard to see reality.
There is one fact that most sellers fail to grasp when their homes are taking “too long to sell”.
Perhaps there is no buyer for your home.
Not right now. And not at your price.
Now, of course, there is no such thing as home that cannot be sold. There is always a buyer for any home – if the price is low enough.
And yes, it hurts to see other homes selling. Yes, it’s painful when no one inspects your home. That’s why agents use ‘rent-a-crowd’ to convince sellers to drop prices.
There is only one thing worse than no one inspecting your home – and that’s lots of people inspecting your home and rejecting it. That’s a sure way to spread the word that the price is too high. But if the “buyers” are not real buyers – as is the case with most people who inspect homes – why have them?
No one should view your home unless they have been pre-qualified and identified. To do otherwise – as happens with most agents – is to leave you, the seller, with only one option if you wish to sell. Drop the price.
If that doesn’t work, drop the price again.
And if it still doesn’t sell, drop the price again.
Repeat until sold.
But what a dreadful situation.
Susan and Sarah had their beautiful home for sale for many months. They were shattered that the price quoted by the agents had not materialised. It took 16 months to sell their home.
For how much?
For $6.7 million. That’s $1.7 million more than they would have sold without the virtue of patience.
Consider this question if you’ve got your home for sale and no one is buying it: If a buyer offered you the price you wanted or better – and was prepared to pay ten per cent and sign a binding contract but could not complete the purchase for six months, what would you say?
Most sellers would accept such an offer.
That’s the same as waiting another six months.
In many parts of the world – especially America and Canada – it’s not unusual for homes to be for sale for a year or more. Why? Because North Americans are more patient than down-under Aussies, that’s why!
Any agent will tell you that some of the toughest sellers – which also means the most successful sellers, those who get a great price – are migrants. This may sound politically incorrect but trying asking a Croatian or Serbian to slash the price of their home. Brace for the reaction.
Or an immigrant from Greece who’s worked hard their entire lives – in a factory or a coffee shop or driven a taxi. These people can’t be bluffed. They can’t be bullied.
They are the masters and mistresses of the virtue of patience.
Look up the saying, “Patience is a virtue” and here’s what it will say: “Patience is a person’s ability to wait something out without getting riled up.”
Even the Bible talks about the virtue of patience (Proverbs 14:29).
According to Solomon, being patient is a sign of wisdom. Being hasty is a sign of foolishness.
Wise sellers don’t fall for common real estate myths such as costly advertising and lots of lookers and tyre kickers prior to falling for “the market has spoken” claptrap.
Wise sellers know this: Getting the right price often means having patience, and character and wisdom – and yes, intelligence – to know this: The right buyer for your home will gladly pay a high price (yes, your price or close to it) for the simple reason that they love your home.
Love is the most powerful of all emotions. Mix it with patience and you’ll usually have a winning combination – just ask those with long and successful unions.
If no one is buying your home right now – and assuming your agent is not useless (even the worst agents want to sell your home) – it may well mean the right buyer has not yet entered the market.
And guess what? If your beautiful home doesn’t sell, you still own a beautiful home.
Never be too quick to change agents. If you didn’t give enough thought to hiring them, at least give some thought to firing them. If not, you may make things worse. Second agents like being second agents. They say, “The first agent has done the conditioning for us.”
Of course, if your agent is genuinely not good enough, the sooner you fire them, the sooner you sell.
Another huge mistake it to spend more on advertising.
Please understand this point: If your home is on the internet – even for the least expensive advertisement – all buyers in your area will see your home. They may not inspect it – especially if a good agent decides that they are not likely to buy – but they will see it.
So many unsold sellers spend thousands more on advertising. That’s throwing money away.
Buyers do not hide under rocks. They are eagerly looking for homes in your area. If your home has not sold, just add the word – “yet”.
And measure the cost of dropping the price against the cost of holding.
Sure, every seller and every home is different. But many people make a fortune from property by using patience. They buy a home today, spruce it up (or do nothing) and re-list it for sale.
And wait.
Patience is a virtue. And patience may be all you need to get the price you want.
So, the next time anyone – especially you – says your home hasn’t sold, add one word to the end of that sentence. Yet.
It hasn’t sold yet.
The right technique, the right strategy, the right solution, could well be patience.
Patience succeeds more often than it fails.
And patience truly is a great virtue that can add great value to your home. It’s worth a try.
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Margot says:
Dear Neil,
This. Patience. This is 100% my husband’s and my approach to selling our home. We have spoken with you, at length, about our place. Since speaking with you, many extra things (some quite unexpected) have come into our family’s life, which have required our time and attention, and we’ve had to step back, protect our sanity, and take more time in preparing to sell our home.
We could have responded differently. We could have done a rush job on our place, hurriedly chosen an agent and gone with whatever advice they offered to get a quick sale happening. We’ve looked at homes we’d like to buy elsewhere as well, and will have “missed out” on a few favourites. But patience tells us that we WILL get our place ready, a buyer who loves it WILL come along, and then we WILL find a place that we love. Just as we haven’t found our buyer – yet – we also haven’t found our next home to love – yet!
We have a plan:
– Aim to go on the market by mid-October.
– If we don’t quite manage it, then the deadline for selling this year will early November.
– If that doesn’t work out, for any reason, then relax, have one more Christmas in our beloved home, and then go for sale in January.
Whatever eventuates, we will not be rushed by agents’ scare tactics, “market forces” or anything else. We are in charge of this!
Neil, much of this is due to your teaching and advocacy, and we thank you greatly for that.
Very very best wishes,
Margot & David
Neil says:
Thank you very much for your kind comments. I look forward to speaking with you again soon. From your message, I think I need to give you a couple of more suggestions. Whenever you’re ready. Best wishes, Neil
Steve says:
You often talk about qualifying buyers but I dont recall process / criteria being explained.
Re patience. We had a neighbour who was selling her house. She wanted a certain price based on what she needed rather than what it was worth. She deemed it a success when after 10 years ( not kidding) she got that price. No concern with the time value of money or what the market was doing generally. Not sure if that was patience or stubborness.
Neil says:
Reminds me of the fable of the rainmaker. He stares at the blue sky constantly and sweats in the heat. But all the time, he’s urging the heavens to “make it rain.” And, of course when it does rain – as it always does – the rainmaker hails himself a hero.