Has your house been on the market for several months without any bites?
In 2014, Philippe became somewhat of a star amongst the Real Estate community in France with his French video “Why is my house not selling” (“Pourquoi ma maison ne se vend-elle pas?”).*
Chantal has decided to do a much sleeker version in English. It’s true, the market has changed quite a bit since 2014, but the information is still the same today.
Hi, my name is Chantal Vaillancourt from Royal LePage in Laval. Today I’m here to give you the English version of Phil’s answer to the question: Why is my house not selling?
And I think it’s a great topic to discuss now because the market is actually really hot. So, your house is on the market, for weeks, maybe even months, you see other neighbors selling, but your house is not getting offers. It’s so frustrating and it’s exhausting. Esp when you keep hearing in the media that the market is at it’s peak and houses are flying off the shelves!
Well to really understand what’s happening, you first have to understand how the real estate market works AND to be able to view the market from the eyes of the buyers currently shopping for their next home. And that is what I’m going to show you today. And to make this video fun, we’ll use Monopoly pieces to illustrate the market. So let’s get started!
So here we have our players, or our buyers in this case. In the middle we have the current inventory of houses. And here we have houses that are not on the market.
And we are going to use current data to make this super realistic. We are going to use the data for the market in the western tip of Laval. Why? Cuz it has such a great mix of very low end priced homes to multi-million dollar estates. It will give us a great sample of the market right now.
Let’s start with inventory. This area currently has 289 homes for sale. So if you are on the market right now, you have 288 competitors. We’ll reprinted this with 30 monopoly houses. (we’ll divide by 10 and round up)
Every month, on average lately, 48 people will buy a home in this area. So we will represent this with 5 monopoly players (because we are dividing by 10 and rounding up)
So what process did these buyers go through before purchasing their home. Obviously they each have their own price range, criteria, neighborhood, etc. But how do they sort through the 300 homes for sale? We’ll that’s pretty obvious, they comparison shop. They get on MLS (or Centris here in Quebec) and they start comparing and sorting. They are basically plugging in their criteria and then sorting through MLS for 2 things, Pictures, prices, pictures prices pictures prices. For hours. When they see a picture and a price that makes sense, that’s coherent, ONLY THEN do they go into the detail of the listing or call their broker (Again in Quebec that means Agent)
They are unconsciously doing what? All the buyers together are are sorting the entire market according VALUE. Like in anything in life, we are constantly looking for VALUE when we buy something. Shoes, cars, houses… we hate paying more for something than we feel it’s worth.so we sort we sort we sort according to value. So the whole inventory goes through this sort of grading scale from best value to worst value, despite price range. The market gets sorted based on value, in French we say Rapport Qualité-prix or BANG FOR BUCK.
So if we use our monopoly houses to illustrate this, this house here would be the BEST VALUE regardless of price and here it would be the WORST VALUE regardless of price. Like a 1 bedroom house on cinder blocks on a busy street for a million dollars. It would be completely ridiculous, (but we see all sorts of odd things.) And here we would have a great renovated 3 bedroom house, with a garage, on a nice street, with a decent yard priced at bang on at market value. So you see what I’m illustrating here. From the best value to the worste value and everything in between.
So say we are January 1st, naturally what does buyer #1 do? He buys the best valued home within his criteria. #2 makes his choice and all the 6 buyers that month. And then it stops there. All these other houses stay on the market that month… possibly including yours. So the market is far from being DEAD, there are 48 buyers buying every month. That’s amazing. For the 48 people that had the best valued homes.
So what happens next month? It would be fun to think well, inventory is down, the next people in line are going to sell their house right? NO! why? Because, we get new inventory every month. 72 homes per month will list in this area. So let’s represent that with 7 new homes. Argh yes the inventory grows in February! And where are these 72 new homes going to be in the inventory according to our value scale. Well, that depends. The majority, unfortunately for you, are motivated and well advised and will position themselves around here. Maybe one will go here to test the market and another here cuz he’s just crazy.
Now, next month, February, which houses are going to sell? Are you catching on? That’s right, it’s the best priced homes. The ones giving the best value in the eyes of the buyer.
So what does this all mean for you? Well it means that if your house is not selling, you need to review with your broker what you need to do to get from here, to here.
How does a good real estate agent determine where you are in the lot? There are a few rules of thumb that we can use. Here’s one:
After 8 showings, if your house has not sold yet, you are most likely over priced
If you are not getting ANY showings, or very little, you are most likely 10% or more, overpriced.
If you are getting quite a few showings, but no offers, you are most likely 5% over priced.
Keep close attention to the feedback you are getting after the showings. If it’s very vague, it’s not a good sign. Get more details from your broker.
Find out what the buyers are buying. Are homes like yours selling? If so at what price. Keep close attention to the market. You need to be HERE!
If you don’t have a broker, well you know what to do.
If you are worried about listing too close to market value, and then you are worried about negociation. Don’t worry. In today’s market, there are enough buyers that you will get to sell with minimal negociation room if you are priced well.
Hope this helps. If you want more info about what is going on in your specific neighborhood, call us, we’re just a block away!