When is it time to take a home off the market?
That’s a question frustrated brokers and sellers grapple with all the time, especially in today’s market, where prime cities like London, Tokyo and Miami are dealing with a surplus of inventory and softening prices.
Unfortunately, there’s no magic formula to determine when it’s time to pull a home, said Rosy Khalastchy, a London-based consultant for Beauchamp Estates who has 30 years in the business. But there are some factors to consider when making this decision.
The first—and most important, experts agree—comes down to price.
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"If a property isn’t selling, nine times out of 10 it’s because of price," said Lynne Davie, a broker who sells properties in Florence and Tuscany for Beauchamp Estates.
Ms. Khalastchy agreed. "If we list a property at the wrong price, we could be doing everything else right and still not draw buyers in," she said, adding that the London market is very price sensitive right now.
Because of this price sensitivity, how much a potential buyer likes a house is related directly to the number attached to it. "You could show someone a property for £1 million and they don’t like it, but when you show them the same property for £800,000, they suddenly do," she said. "That’s why it’s so important to get it right."
Many properties are listed with a price that’s too high because the seller has a number in their head that doesn’t reflect the market, said Peggy Fucci, president and CEO of OneWorld Properties, a real estate consulting and brokerage firm in South Florida.
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While agents may agree to that ambitious list price, they’ll likely request that the seller reconsider within a few months if the property isn’t moving. "A lot of effort and expense goes into marketing a home," Ms. Fucci said, "and agents don’t want to work for free or put in a lot of time for something that isn’t going to sell."
If the seller isn’t ready to take their agent’s advice and drop the price, it’s often a sign that they’re not ready to sell at all, Ms. Khalastchy said. At this point, she prefers to lay it out for them simply and put the ball in their court, she said. "I say, ‘unless you’re willing to do A, B, and C, it’s really not worth it to leave the house up, so we should take it off the market" she said.
Another reason to temporarily take a home off the market rather than just drop the price when it’s listed is to give sellers time to make some updates or changes that might lead to a less severe price drop when it’s ready.
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Timing is local
Which brings us to timing. When determining how long is too long to remain listed without pulling it from the market to make updates or allow sellers to rethink price, that number can vary between about three months and three years, depending on things like the type of property, location, and price range.
In the Tuscan countryside, where homes are purchased as a second or third home by an international buyer about 99% of the time, Ms. Davie said, it’s natural for them to sit on the market longer than primary residences.
"Purchasing a second home isn’t always a top priority for people," Ms. Davie said, "so most buyers take their time."
Most homes there need at least a full year to sell, she continued, specifically because you’re waiting for buyers from the U.S. or the Middle East or China to make multiple trips to the region to find the property that’s right for them. Some properties are even listed for three years, which doesn’t necessarily spell trouble, she said. But if it’s listed for any longer than that, and the owners have shown they’re unwilling to compromise on price, Ms. Davie said she’ll often pull the listing and tell them to give her a call when they’re really ready to sell.
In London, Ms. Khalastchy said that despite being a buyer’s market, properties that are priced right should still move in about three to four months. While in Miami, six months is generally about right, Ms. Fucci said. At that point, it’s either time to drop the price or temporarily pull the listing.
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That is, unless you’re talking about those one-of-a-kind homes that only a multi-millionaire or billionaire can afford, in which case, regardless of the market, the typical timeline should be doubled to about six to eight months in London and around a year in Miami.
"As properties get more expensive, there are fewer people in the market, so you’re waiting for the right buyer to come along," Ms. Fucci said.
Know the competition
In addition to price and timing, another factor that can impact when to pull a property is competition. For instance, Ms. Khalastchy said that if she’s representing a property in a high-end residential neighborhood in London and a similar property goes on the market down the block for less, she might pull her listing and wait and see what happens.
On the other hand, if she finds out a new luxury property is set to be completed in a few months with higher priced units than the flat she’s representing, she may pull her listing for the time being and re-list when those units are ready, so hers looks like a deal.
There are also some uncontrollable factors that might lead brokers or sellers to pull a home, like city construction on the block, which a seller should wait out, Ms. Khalastchy said. "You want your home to appear both accessible and comfortable," she said.
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Consider a short break an opportunity
Depending on the reason for pulling the listing, experts recommend a few things that owners can do before they relist if they’re serious about selling.
If they’re pulling down a property because of the price, experts recommend that the seller thinks about what they’re willing to take, and only relist if they take the advice of their agent—even if that means reducing the price by a couple million dollars, and being open to negotiating if a reasonable offer comes in.
In many cases, though, a price decrease won’t be anywhere near that drastic. "Knowing that people are going to look online first has changed pricing strategies," Ms. Khalastchy said, noting that a seller might only need to drop their price from £4.15 million to £3.95 million to get attention on a re-list, and bring in potential buyers with a slightly lower budget—in this case, those looking for a home that costs up to £4 million.
Sellers should also work with their agent to make sure their online photos are top-notch, Ms. Davie said. "The images shouldn’t just demonstrate what the property looks like—it should capture its ambiance and atmosphere, and tell a story," she said. If the current photos don’t achieve that aim, or they aren’t taken when the garden is blooming or another property highlight is shown at its best, sellers should invest in new photography, Ms. Davie said.
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If an agent decides to pull a house because of a lack of interest, or feedback related to the condition of the property, experts say a short break represents an opportunity to spruce it up, which could take two weeks, three months or even longer, depending on what changes need to be made, Ms. Khalastchy said.
For some sellers, the necessary changes might be as simple as de-cluttering, painting and staging. For others, changes could mean more involved work, like making the landscaping more appealing, adding in state-of-the-art windows or a new roof in Miami, where buyers are worried about storm protection, or getting rid of carpeting and replacing flooring in a condo, Ms. Fucci said.
"You want to take the time to highlight key elements of the home," she continued.
"Someone who’s interested in buying the home should be able to see themselves and their family living there."
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