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Why Sacramento Listings Are Withdrawn, Canceled or Expired From MLS
Not to have a single withdrawn, canceled or expired real estate listing in today’s Sacramento real estate market is completely impossible among top producers, yet some websites rank agents by percentage of listings sold. If a Sacramento real estate agent had only two listings a year — and that’s about the number of listings that most agents list — and she sold one and the other seller canceled, the agent would show a 50% ratio, which is really bad.
There are many reasons why a home listing in Sacramento might not see its way to closing, and most of those reasons are out of the agent’s control. Let’s take a look at withdrawn or canceled listings, for example. This is excluding a canceled listing that comes back on the market with a new MLS number to reset the days on market, or is off the market for a spell during a winter vacation or improvement project. Typically, 3 things cause a canceled listing:
- Insanity
- Exhaustion
- Overpriced
Insanity. When an agent deals with a large cross section of the population, she is likely to encounter a few sellers who suffer from sort of mental incapacity. They could be completely psychotic or simply bipolar but not every seller is balanced. Is it the agent’s fault that she doesn’t have time to administer the Minnesota Multiphasic Personality Inventory test prior to accepting the listing?
Exhaustion. This happens more frequently during short sales because these types of transactions take much longer than other types of home sales. If the buyer, for example, drops dead or buys another home (same thing to the seller, basically), thereby canceling, the short sale can start over. There are many reasons for short sale rejection, and sellers need patience to eventually close. Some sellers give up the fight and choose foreclosure.
Overpriced. This is the most common reason for a withdrawn, canceled or expired listing. It is the worst mistake a seller can make, but sellers choose the sales price. When a home doesn’t sell due to price, sellers become angry at themselves and some of that anger ends up hurled in the agent’s direction, too, because who wants to squirm in their own hostility all by themselves? Misery loves company.
There is a guy in my real estate office who makes a very good living by working with withdrawn, canceled and expired listings. He spends all day in a space about the size of a phone booth calling these sellers. Can you imagine his phone conversations? The guy has got to be an armadillo in disguise or a saint, I’m not sure which.
In any case, all of these canceled listings can affect an agent’s percentage performance on some websites, and percentage of listings sold is not an accurate indicator of the agent’s actual performance.
Three Top Reasons Your Sacramento Home is Not Selling
If you’re wondering why your home in Sacramento is not selling, you’ve come to the right place. The likelihood is you are not one of my sellers but I imagine you could be. Just as you might imagine you could be. In fact, I had a seller yesterday who imagined just that, as he was NOT my seller but said he wanted to be. Well, he doesn’t really want to be a seller, you know, he wants to be a former owner. All sellers want to be a former owner.
Or, at least that’s what a Sacramento real estate agent would imagine. But some of us are capable of imagining all sorts of stuff because we’ve learned early in life that what one can imagine, one can probably create. It’s why we excel at marketing.
Yeah, out of the blue this guy calls as I’m driving back to my home office. Thank goodness my top wasn’t down (on my car). The guy was happy I answered my phone and said he was mad that his agent did not. Said he’s had his home listed for 3 months, the listing was expiring today, and his agent doesn’t return calls or emails and simply ignores him. I tell him I’m sorry; I don’t know his agent. Then he admits his agent is the brother of his sister-in-law, or some such, what we call a DNA agent. Would I puhhhhhlease help him?
OK, sure, I’ll take a look at his listing when I get to my office. In the meanwhile, I tell him there are 3 reasons typically why a home is not selling:
- Price
- Condition
- Marketing
I pull up the listing in MLS and spot one photo — a bad quality photo — and no interior photos. The confidential agent remarks say the seller will credit the buyer X amount of dollars for painting. Wow, that really makes this Sacramento real estate agent want to show the house. What great motivation.
Next, I examine the comparable sales. I can see how the agent determined the price. He priced it in line with the homes presently on the market, which all have long days on market, and all of which are significantly larger and appear to be in better condition. This home is not priced according to the comparable sales. It’s priced at least 10% too high.
Not to mention, it’s a small part-time broker who has the listing, who might not have much of a network at his disposal. At Lyon Real Estate, we have almost 1,000 agents with whom we network. I explain this to the seller when I call back and offer professional photography with my Nikon and wide-angle lens. In fact, I could take the key from the lockbox with his written permission.
Thanks, but no thanks, the guy says. He’s now talked with his agent and supplied him with all of my wonderful ideas, and he’s thinking about staying with him for a while. He doesn’t want me to do any more work for which I won’t get paid.
It’s nice that somebody is looking out for this Sacramento real estate agent. I didn’t get a chance to tell him there is a reason I am closing in on selling another 100 homes this year.
You Can’t Trust All Sacramento Appraisals
It’s not astonishing that people do not understand how a Sacramento appraiser appraises a home, and why not all appraisals are a guarantee of value. Unless you’re a person who is really wedded to this business, like, say, this Sacramento real estate agent. But most individuals don’t sell or buy enough homes in their lifetime to care much about the details. They also might think a bank appraisal is like receiving a certificate of gold, as though it’s redeemable somehow or an item of value to treasure.
I see the look in the eyes of my sellers when I explain that a home needs to appraise at the price a buyer is willing to pay in order to actually close escrow. The eyes glaze a bit and they hear: real estate agent talking — a phrase my husband likes to use to illustrate how carefully I listen to him as in husband talking, yada yada.
For example, if you’ve got two offers for a home, and one offer is cash at $400,000, and another offer involves minimum-down FHA financing at $400,000, a seller might elect to take the cash offer. Because there is no appraisal. Of course, the downside to that is the cash offer buyers typically possess little emotional investment, and once they snag their fish, they often try to haggle over other small things to even out stuff.
Now, some buyers might agree to bridge the difference if an appraisal comes in low. They might say they will pay, say, $10,000 in cash, meaning if the appraisal was $390,000, they would pay out of pocket the difference for the low appraisal. Some do, but not very many. That’s because people still believe the appraiser’s word is like the 10 Commandments. Others also might promise they’ll bridge the difference but then cancel under an inspection contingency, rendering that promise worthless.
An appraisal is just an opinion of value. It’s an educated and calculated guess. Ask 3 appraisers, and you’ll probably get 3 different answers. They might be close in value, but still not match.
Sometimes, the swing in value between two appraisals is tremendous. Had one of those recently in which the home initially appraised for 10% more than it sold for, which was pretty ridiculous in a seller’s market for long days on market, and the second appraisal was 2% less than it sold for, still ridiculous. An appraiser almost has to be trying to mess up the deal to do that.
I recall an appraiser a few years ago who appraised a home for .0001 less than the sales price. Just enough to make the buyer pay for a new appraisal. Who does things like that? Most appraisers in today’s market want to appraise at the sales price because they recognize that prices are increasing. They don’t want to be that cog in the wheel dragging down the market, and they want to fairly assess homes.
But until you get past that appraisal stage, you don’t really have a sale. So don’t be spending that check yet. It’s common in today’s real estate market, especially for an FHA transaction, for a lender to order a second appraisal. It says if a bank doesn’t trust its appraisal, why should you?
If Your Home in Land Park Doesn’t Immediately Sell
It’s pretty frustrating in a seller’s market for a seller to wonder why all the houses around his house are selling but his is not. Especially a gorgeous home in Land Park, listed by a Land Park agent. There are basically 3 reasons why a house doesn’t sell:
- location
- price
- condition
If the location is questionable or of concern to a buyer, then the price needs to be adjusted accordingly. It’s difficult to get the same price for a home like that as compared to a home in a highly desirable location, but sometimes you can.
The trick is to correctly position that home among the others offered for sale. A seller might want to think like a buyer before putting his home on the market. He should look for trends in the marketplace such as how long does it take each home to be exposed to the market before it sells? This is known as Days on Market. Any Land Park agent will know the approximate days on market when asked.
But more important, the seller should examine the competition, just like his Land Park agent will do. For example, if he were a buyer looking, say, in the $350,000 to $400,000 range for a home in Land Park, what else is available for sale? What can he buy for that price? How do those homes compare to the one the seller intends to put on the market? If his listing is the only available listing, he will get a lot of action, maybe even multiple offers, even if his home is not in the best location.
I’ve seen this happen over and over. Might have a home that sits on the market for a few weeks with no offers but generating a lot of showings. Getting showings tells this Land Park agent the buyer’s agent put the Land Park home on a tour for a reason. Was it the first home or the last home? Is the buyer’s agent using that home as the bad house nobody would ever buy? Agents often show a bad house to use as comparison. We might have no offers but one day three offers show up. If I were to check MLS, it would probably tell me there was nothing left to buy. Not in Land Park, nor Curtis Park nor East Sacramento, which are three areas a Land Park buyer might look if she wants to buy in Land Park.
Sometimes, your number just comes up. But wouldn’t it be easier to just reduce the price in the first place?
If you’d like to chat with an experienced agent who lives and works in Land Park, call Elizabeth Weintraub, at Lyon RE, 916.233.6759.
