When a home is placed on the market for sale it is more commonly referred to in the real estate industry as “listed.” Home sellers are anxious, and frantically await a fast sale on their property for the highest price possible. However, due to market conditions, this is not always possible. It’s good to know the rules of a home listing and have a realistic expectation of how long a home can be listed for sale before a sold sign appears in the front lawn.
When a real estate brokerage lists a home for sale, they are putting time, effort and marketing dollars into the sale of the home up front at no cost to the seller. It is because of this that real estate agents must properly convey expectations to the seller about current market conditions in their area, and show them facts and figures such as average pricing and average time on market. This helps to keep all parties to the transaction realistic in their expectations.
Timing is Crucial
The first 30 days on the market for any listing is the most crucial time. This is the time where the property is being marketing and getting exposure to buyers to preview it. During the first 30 days of a listing, showing activity should be high and consistent. Normally property previews will begin to thin out if a house is listed for more than 30 days in most markets around the country.
Days On Market Versus. Cumulative Days on Market
In a listing printout that typically only real estate professionals can see, there are two columns: the days on market for a property and the cumulative days on market for a property. What is the difference? The days on market column reflects how long a particular real estate office has had a listing on the market, whereas the cumulative days on market will show how long the property has been on the market with that, and any prior brokerage. For example, if a property has been listed with RE/MAX for 30 days, but was listed with Keller Williams for 90 days prior to that, the days on market column would reflect 30, however, the cumulative days on market would read 120 (30 + 90).
Each area of any geographic location or subdivision in residential real estate has what is called an “average number of days on the market.” This indication shows home sellers in any particular area how long most homes remain on the market prior to a sale. In some places, like Texas, certain areas average a very impressive 30 days on the market prior to the property being sold. In other areas, like Nevada, average time on market could peak at 542 days on the market prior to a successful sale.
Longer is Worse
Days on market and cumulative days on market can be a death sentence for most home sellers. The longer a home stays available, the more buyers will wonder what is wrong with it and why it hasn’t sold. While in reality the home might be perfectly sound and in good condition, homes that have not sold quickly can earn a stigma that is less than desirable, and could kill a potential deal before an offer is ever even made.
The Listing Agreement
On average, a real estate agent will draft a listing agreement that is six months in length. This provides the agent and the brokerage ample time to sell the property and justifies the marketing dollars that they will put into the initial exposure of the home by creating a greater potential for a good return on their investment. Some agents, depending on the market, might draft listing contracts in excess of six months in order to protect the interest of the brokerage. While this can seem daunting to a home seller when potentially looking at having a listing on the market for six months or longer, it is a common agreement. Should the agent fail to perform, most brokerages will allow a seller to recind a contract at no cost or fee.
How Long Can a Home Stay on the Market?
While this seems at its surface an easy question to answer, the key is to remember that there is no set “limit” to how long a home can stay on the market. A seller can have a property on the market indefinitely until they find the right buyer for it, or they could opt to withdraw it from the market after a few weeks should they change their minds or circumstances change for them. There is no statute or legal doctrine on what individuals can do with their own property. At the end of the day, how long a home stays on the market is completely in the hands of the people wanting to sell it.