Reasons Properties Stay "on the Market"

Reasons Properties Stay "on the Market"

Jewel B.Pro Member
New to Real Estate · Lehigh Valley, PA · Member since 2021 · 352 posts · 120 votes

Good evening fellow investors and community members,

I am wondering what are some of the obvious and not so obvious reasons that properties sit on the market for extended periods of time.

For example, sometimes when looking on Trulia, I see small MFHs (or other property types) that seem to have potential, yet it's been a few months and they're still on there. It makes me think - should I even bother looking at or considering it or running the numbers? What's wrong with the property or area? Is it a red or yellow flag?

Some thoughts are - the neighborhood or block may be high crime / poverty even if the overall area is considered nicer (like a D block in a B area), the property is overpriced and the seller won't budge / low motivation, liens on the property (I'm not really familiar with tax and title and legal stuff but maybe something like that?), the property needs major rehab and simply no one willing or interested has come along, there are current tenants and the seller won't deliver vacant (and interested buyers only wanted vacant), or maybe it's a crappy house in a nice area and those types of buyers aren't interested and investors aren't looking in those typically overpriced areas?

What else am I missing?

Why would a B/C property in a B/C neighborhood remain for sale for months in areas with investors?

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Real Estate Agent · Skagit Valley, WA · Member since 2021 · 256 posts · 283 votes
3y
Quote from @Jewel B.:

Good evening fellow investors and community members,

What else am I missing?

Why would a B/C property in a B/C neighborhood remain for sale for months in areas with investors?


The price. 

I could sell a rat-infested single-wide trailer up-river if the price is right. Conversely, if the price is not right I cannot sell your multi-million dollar luxury home. The short answer? There may be a million "reasons" why the house you're looking at hasn't sold. The actual answer? The price is too high for the property given all of those "conditions". 

Did I mention the price was the problem?

By all means, after checking things out.....make an offer that works for you! 

See this reply in the discussion

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  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    3y

    It'll be a myriad of reasons. It's either priced too high, in an unsafe area, some damage is on the seller's disclosure list that you need to look at, they are being prohibitive to prospective buyers(no photos & only showings after accepted contract), current tenants could be an issue, really anything. You should run the numbers, for the sake of grasping it. If you're an out of state investor, or trying to be like me, you'll have to get varying property tax rates, laws, etc., that change how you approach certain type of housing prospects. 

  • Jewel B.Pro Member
    OP
    New to Real Estate · Lehigh Valley, PA · Member since 2021 · 352 posts · 120 votes
    3y
    Quote from @V.G Jason:

    It'll be a myriad of reasons. It's either priced too high, in an unsafe area, some damage is on the seller's disclosure list that you need to look at, they are being prohibitive to prospective buyers(no photos & only showings after accepted contract), current tenants could be an issue, really anything. You should run the numbers, for the sake of grasping it. If you're an out of state investor, or trying to be like me, you'll have to get varying property tax rates, laws, etc., that change how you approach certain type of housing prospects. 


     Oh wow, lots of options I see. Would a realtor in the area know why? I'm not sure what exactly realtors see about a property or its showing / offer history. I will run the numbers then, at worst for practice, at best to find a deal. For the types of properties I'm considering, would it be wise to go in with a contractor during the showing who can take notes and provide rehab estimates? I've never house hunted or worked with a realtor before so I'm not entirely sure of the process. Suppose to talk to one next week.

    For tax rates and laws, there are government websites with ordinances or county assessors right? Or where would I go to find that info?

  • Real Estate Agent · Skagit Valley, WA · Member since 2021 · 256 posts · 283 votes
    3y
    Quote from @Jewel B.:

    Good evening fellow investors and community members,

    What else am I missing?

    Why would a B/C property in a B/C neighborhood remain for sale for months in areas with investors?


    The price. 

    I could sell a rat-infested single-wide trailer up-river if the price is right. Conversely, if the price is not right I cannot sell your multi-million dollar luxury home. The short answer? There may be a million "reasons" why the house you're looking at hasn't sold. The actual answer? The price is too high for the property given all of those "conditions". 

    Did I mention the price was the problem?

    By all means, after checking things out.....make an offer that works for you! 

  • Jewel B.Pro Member
    OP
    New to Real Estate · Lehigh Valley, PA · Member since 2021 · 352 posts · 120 votes
    3y
    Quote from @Tim Johnson:
    Quote from @Jewel B.:

    Good evening fellow investors and community members,

    What else am I missing?

    Why would a B/C property in a B/C neighborhood remain for sale for months in areas with investors?


    The price. 

    I could sell a rat-infested single-wide trailer up-river if the price is right. Conversely, if the price is not right I cannot sell your multi-million dollar luxury home. The short answer? There may be a million "reasons" why the house you're looking at hasn't sold. The actual answer? The price is too high for the property given all of those "conditions". 

    Did I mention the price was the problem?

    By all means, after checking things out.....make an offer that works for you! 

    Thanks for sharing!

    So you would suggest analyzing the deal and if it has potential, moving forward, reverse engineering the #s, and making an offer for the price it would work at?

    The worst that happens is they say no - I just need 1 single yes!
  • Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes
    3y

    1) Price

    2) Location 

    3) Condition 

    That's it, those are the 3 reasons 

  • Jewel B.Pro Member
    OP
    New to Real Estate · Lehigh Valley, PA · Member since 2021 · 352 posts · 120 votes
    3y
    Quote from @Jeremy Horton:

    1) Price

    2) Location 

    3) Condition 

    That's it, those are the 3 reasons 


    1) There's always a price where the #s will and deal will work so that has potential

    3) Same idea, there's a price higher rehab will work at. Some people just don't want to deal with it or have the funds to shell out for rehab (though there are some options like 0% credit and construction loans and 203(k) I've seen).

    But #2 - if it's dangerous or crappy (D or F) there's no fixing that.

    So basically, if the location is fine, just analyze the deal and offer whatever price it works at given the condition and other #s

  • Real Estate Agent · Skagit Valley, WA · Member since 2021 · 256 posts · 283 votes
    3y

      @Jewel B.  absolutely!

    If everything was great on the first round....it wouldn't still be sitting there right?

    Find out what conditions are keeping buyers / investors away...and then consider whether you might have a fix or not. You most likely will come to a similar conclusion as others...but there may be a property where you are uniquely set up to jump in and do something. In those cases, make an offer that will work for you....and stick to it. 

  • Jewel B.Pro Member
    OP
    New to Real Estate · Lehigh Valley, PA · Member since 2021 · 352 posts · 120 votes
    3y
    Quote from @Tim Johnson:

      @Jewel B.  absolutely!

    If everything was great on the first round....it wouldn't still be sitting there right?

    Find out what conditions are keeping buyers / investors away...and then consider whether you might have a fix or not. You most likely will come to a similar conclusion as others...but there may be a property where you are uniquely set up to jump in and do something. In those cases, make an offer that will work for you....and stick to it. 


     Thanks!

    Sometimes others may simply not have been interested in the fix, even if it's nothing crazy (like foundation issues or fire damage).

  • Real Estate Agent · Skagit Valley, WA · Member since 2021 · 256 posts · 283 votes
    3y
    Unable to delete.



  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    3y
    Quote from @Jewel B.:
    Quote from @V.G Jason:

    It'll be a myriad of reasons. It's either priced too high, in an unsafe area, some damage is on the seller's disclosure list that you need to look at, they are being prohibitive to prospective buyers(no photos & only showings after accepted contract), current tenants could be an issue, really anything. You should run the numbers, for the sake of grasping it. If you're an out of state investor, or trying to be like me, you'll have to get varying property tax rates, laws, etc., that change how you approach certain type of housing prospects. 


     Oh wow, lots of options I see. Would a realtor in the area know why? I'm not sure what exactly realtors see about a property or its showing / offer history. I will run the numbers then, at worst for practice, at best to find a deal. For the types of properties I'm considering, would it be wise to go in with a contractor during the showing who can take notes and provide rehab estimates? I've never house hunted or worked with a realtor before so I'm not entirely sure of the process. Suppose to talk to one next week.

    For tax rates and laws, there are government websites with ordinances or county assessors right? Or where would I go to find that info?


     I wouldn't worry about a contractor during showing. Get the inspection and know the issues or if you have the seller's disclosure, you can ask local contractors for guesstimates(then add 10-15% to it time and money wise). In this market, almost nothing is intrinsic there's multiple reasons for that one strong carry component of it is you have people still pricing and hoping for some early 2022/2021 relevance in price which is just a far cry given rates are up 4% from that(more than double). They see past 6-12 month comps, don't factor into it rate changes, and price "around" those. Lot of clueless price composers here. You need to make it intrinsic, there's a variety of ways to do that. One would be a lower offer, yes, but plenty more.

  • Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    Time of year has a lot to do with it. Realtors are still over pricing homes and killing its momentum, a good realtor will price the home right where it needs to be. Market has changed a lot since interest rates have gone up 

  • Jewel B.Pro Member
    OP
    New to Real Estate · Lehigh Valley, PA · Member since 2021 · 352 posts · 120 votes
    3y
    Quote from @V.G Jason:
    Quote from @Jewel B.:
    Quote from @V.G Jason:

    It'll be a myriad of reasons. It's either priced too high, in an unsafe area, some damage is on the seller's disclosure list that you need to look at, they are being prohibitive to prospective buyers(no photos & only showings after accepted contract), current tenants could be an issue, really anything. You should run the numbers, for the sake of grasping it. If you're an out of state investor, or trying to be like me, you'll have to get varying property tax rates, laws, etc., that change how you approach certain type of housing prospects. 


     Oh wow, lots of options I see. Would a realtor in the area know why? I'm not sure what exactly realtors see about a property or its showing / offer history. I will run the numbers then, at worst for practice, at best to find a deal. For the types of properties I'm considering, would it be wise to go in with a contractor during the showing who can take notes and provide rehab estimates? I've never house hunted or worked with a realtor before so I'm not entirely sure of the process. Suppose to talk to one next week.

    For tax rates and laws, there are government websites with ordinances or county assessors right? Or where would I go to find that info?


     I wouldn't worry about a contractor during showing. Get the inspection and know the issues or if you have the seller's disclosure, you can ask local contractors for guesstimates(then add 10-15% to it time and money wise). In this market, almost nothing is intrinsic there's multiple reasons for that one strong carry component of it is you have people still pricing and hoping for some early 2022/2021 relevance in price which is just a far cry given rates are up 4% from that(more than double). They see past 6-12 month comps, don't factor into it rate changes, and price "around" those. Lot of clueless price composers here. You need to make it intrinsic, there's a variety of ways to do that. One would be a lower offer, yes, but plenty more.


     What are some other factors to consider in negotiations besides simply price?

  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    3y
    Quote from @Jewel B.:
    Quote from @V.G Jason:
    Quote from @Jewel B.:
    Quote from @V.G Jason:

    It'll be a myriad of reasons. It's either priced too high, in an unsafe area, some damage is on the seller's disclosure list that you need to look at, they are being prohibitive to prospective buyers(no photos & only showings after accepted contract), current tenants could be an issue, really anything. You should run the numbers, for the sake of grasping it. If you're an out of state investor, or trying to be like me, you'll have to get varying property tax rates, laws, etc., that change how you approach certain type of housing prospects. 


     Oh wow, lots of options I see. Would a realtor in the area know why? I'm not sure what exactly realtors see about a property or its showing / offer history. I will run the numbers then, at worst for practice, at best to find a deal. For the types of properties I'm considering, would it be wise to go in with a contractor during the showing who can take notes and provide rehab estimates? I've never house hunted or worked with a realtor before so I'm not entirely sure of the process. Suppose to talk to one next week.

    For tax rates and laws, there are government websites with ordinances or county assessors right? Or where would I go to find that info?


     I wouldn't worry about a contractor during showing. Get the inspection and know the issues or if you have the seller's disclosure, you can ask local contractors for guesstimates(then add 10-15% to it time and money wise). In this market, almost nothing is intrinsic there's multiple reasons for that one strong carry component of it is you have people still pricing and hoping for some early 2022/2021 relevance in price which is just a far cry given rates are up 4% from that(more than double). They see past 6-12 month comps, don't factor into it rate changes, and price "around" those. Lot of clueless price composers here. You need to make it intrinsic, there's a variety of ways to do that. One would be a lower offer, yes, but plenty more.


     What are some other factors to consider in negotiations besides simply price?


    Condition incl recent capex improvements, location, appliances, rent rolls if it's leased, HOA policies, etc.

  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    3y

    More than likely it's price. Sometimes sellers have a number in their heads they "want" and it has nothing to do with the performance of the property, or the actual market value. If you yourself do not know the area and market, I would suggest finding a Realtor that does. Good Realtors know the local areas, the different types of properties, etc. Too often on BP I see posts "looking for Investor friendly agent". What is that? My time is valuable. I'm not going to run a bunch of comps on every property someone finds online, or give bids, etc. If a person is serious about buying then they need to narrow down their criteria, and be realistic. The formulas here on BP are not workable in every market. If you want to go it alone and you're inexperienced, be prepared to lose a lot of money until you figure out the ropes. 

  • Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    3y

    I agree with a previous poster that the price is the MAIN issue in a property not selling. Even if the location is horrible, someone will make it work if it's cheap enough. When I see a property go in and out of contract then I know that either it's not appraising or the inspection is coming back with scary info. A property that's on the market long enough will usually start getting price reductions. I've seen as many as 4 reductions before someone finally takes it down and even then well below ask.

  • Jewel B.Pro Member
    OP
    New to Real Estate · Lehigh Valley, PA · Member since 2021 · 352 posts · 120 votes
    3y
    Quote from @V.G Jason:
    Quote from @Jewel B.:
    Quote from @V.G Jason:
    Quote from @Jewel B.:
    Quote from @V.G Jason:

    It'll be a myriad of reasons. It's either priced too high, in an unsafe area, some damage is on the seller's disclosure list that you need to look at, they are being prohibitive to prospective buyers(no photos & only showings after accepted contract), current tenants could be an issue, really anything. You should run the numbers, for the sake of grasping it. If you're an out of state investor, or trying to be like me, you'll have to get varying property tax rates, laws, etc., that change how you approach certain type of housing prospects. 


     Oh wow, lots of options I see. Would a realtor in the area know why? I'm not sure what exactly realtors see about a property or its showing / offer history. I will run the numbers then, at worst for practice, at best to find a deal. For the types of properties I'm considering, would it be wise to go in with a contractor during the showing who can take notes and provide rehab estimates? I've never house hunted or worked with a realtor before so I'm not entirely sure of the process. Suppose to talk to one next week.

    For tax rates and laws, there are government websites with ordinances or county assessors right? Or where would I go to find that info?


     I wouldn't worry about a contractor during showing. Get the inspection and know the issues or if you have the seller's disclosure, you can ask local contractors for guesstimates(then add 10-15% to it time and money wise). In this market, almost nothing is intrinsic there's multiple reasons for that one strong carry component of it is you have people still pricing and hoping for some early 2022/2021 relevance in price which is just a far cry given rates are up 4% from that(more than double). They see past 6-12 month comps, don't factor into it rate changes, and price "around" those. Lot of clueless price composers here. You need to make it intrinsic, there's a variety of ways to do that. One would be a lower offer, yes, but plenty more.


     What are some other factors to consider in negotiations besides simply price?


    Condition incl recent capex improvements, location, appliances, rent rolls if it's leased, HOA policies, etc.

    I don't know the terminology but I guess I mean moreso in terms of concessions to make or negotiations to make with an offer besides a simple change in purchase price. Like credit or paying closing costs etc.
  • Jewel B.Pro Member
    OP
    New to Real Estate · Lehigh Valley, PA · Member since 2021 · 352 posts · 120 votes
    3y
    Quote from @Karen Margrave:

    More than likely it's price. Sometimes sellers have a number in their heads they "want" and it has nothing to do with the performance of the property, or the actual market value. If you yourself do not know the area and market, I would suggest finding a Realtor that does. Good Realtors know the local areas, the different types of properties, etc. Too often on BP I see posts "looking for Investor friendly agent". What is that? My time is valuable. I'm not going to run a bunch of comps on every property someone finds online, or give bids, etc. If a person is serious about buying then they need to narrow down their criteria, and be realistic. The formulas here on BP are not workable in every market. If you want to go it alone and you're inexperienced, be prepared to lose a lot of money until you figure out the ropes. 


     I appreciate your valuable insight. I will be sure to bring a clear buy box to my future realtors so that I don't waste their valuable time and they understand I'm serious.

  • Jewel B.Pro Member
    OP
    New to Real Estate · Lehigh Valley, PA · Member since 2021 · 352 posts · 120 votes
    3y
    Quote from @John Teachout:

    I agree with a previous poster that the price is the MAIN issue in a property not selling. Even if the location is horrible, someone will make it work if it's cheap enough. When I see a property go in and out of contract then I know that either it's not appraising or the inspection is coming back with scary info. A property that's on the market long enough will usually start getting price reductions. I've seen as many as 4 reductions before someone finally takes it down and even then well below ask.

    I also get curious when I see it went from pending to back on the market. I know it can be as simple as financing falling through but I do wonder if there was something else to it!
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