In the crazy world of real estate, it is not uncommon to see homes that have been on the market for six months, a year or even two years. Us insiders call these homes stale listings. In the case of a stale listing, a seller is usually in no hurry to sell, and the property generally has serious problems.
But, sometimes a listing will come around that trumps even the more stale of listings. Earlier today, I sifted through the 26,681 single-family, condominium, multi-family and rental listings currently on the market on my local Multiple Listing Service (MLS). This list covers most of Massachusetts, and some listings in other states such as New Hampshire and Maine.
How Many Stale Listings Are Actually on the Market
4,530 (17%) of listings have been on the market for more than six months. As you can see, this is not all that uncommon, especially in depressed areas.
1,865 (7%) of listings have been on the market for more than one year. Once a residential listing hits the one-year mark, it usually has a reputation. Either the seller is not all that serious about selling, or there is some known defect with the home.
581 (2%) of listings have been on the market for more than two years.
93 (.3%) of listings have been on the market for more than five years.
3 (.01%) of listings have been on the market for more than 10 years!
Of those ultra-stale listings, the longest property listing that ultimately sold was on the market for 3,602 days, or nearly ten years. I was in middle-school when the listing was first put on the market! In this case, the listing was for developable land. It was originally listed for $150,000 in 2010 (Inflation adjusted $178,796.73), and finally sold for $75,000 this year. Even though the above property sold for 50% off, some long-term listings actually go up in price! Also, many stale listing owners rotate through various real estate agents.
Another listing, a multi-family in New Hampshire, has been on the market since 2010. A land listing was listed in 2005 for $5,000,000 (inflation adjusted $5,959,891.04), and is still on the market today for $3,900,000. In fact, the longest listing for which I can find reliable records was on the market from 2002 until it finally sold in 2015, 13 years! One home does ping back at 60,000 days, but fortunately that is an error. I knew this, among other ways, because there was no mention of an area for a horse and carriage, a travesty for a home listed in 1855!
A Local Example of a Stale Listing
All of the examples above are stale listings, homes that have been continuously listed for an extended period of time. However, the owner of such a property could simply take it off the market for a short period of time (90 days before 2019, now 60 days) and the days on market (DOM) counter would reset to zero.
Other homeowners market their listing quietly, or periodically put it on and bring it off the market. In my local area, one man has been doing that for years.
The property is a 2/3-acre lot in a tough area. Most of the neighbor’s homes are not well taken care of. In fact, this seller has been trying to sell his land for so many years that he has actually increased his asking price to keep up with inflation. In fact, I once had a developer who was interested, but got cold feet once he realized the seller had raised his price yet again. This brings me into my next point. For most people, it probably is a waste of time to go after a stale listing.
3 Reasons to Avoid Buying a Stale Listing
There are many reasons to avoid a stale listing. Below are three of the most common ones.
The Seller Is Likely Unreasonable
No one who needs to sell keeps their home on the market for years. In other words, if a seller is serious about selling, they will lower the price enough so that it becomes worthwhile for someone to put in an offer.
People who leave their listings on the market for years at a time are generally tire kickers, not serious about selling or possibly hoping that a buyer with deep pockets comes around and just happens to like the house. This is not realistic because people who have money to throw around generally did not become wealthy by wasting their money on bad real estate purchases.
However, there are a couple of exceptions. First of all, some commercial properties do remain on the market for years. This makes sense as they require a buyer with many funds and may be a complicated project that few can reasonably accomplish. In these cases, an owner may leave their stale listing on the market so that when these buyers are looking for their next project, they won’t miss the seller’s land.
Second of all, some high-end listings remain on the market for a few years before selling. For example, an expensive home in Brookline, just west of Boston, sold for $23,000,000 earlier this year and after almost four years on the market. The average home in Brookline that sold in the last six months was listed for just under three months. Although four years is a long time to be on the market, there are few buyers looking for homes in that price range, so it is understandable that it was on the market for an extended period of time.
There Is Something Wrong With the House
Of course, the more common reason a home is on the market for an extended period of time is simply because it is overpriced. Sometimes a seller cannot accept the fact that what they dream being built on their land is not realistic, and therefore, their land is only worth a fraction of what it is listed for.
Other times, the home gains a reputation and is simply undesirable for another reason. Perhaps it is close to the highway or maybe it is unbuildable. Or the home does not keep in style with the rest of the neighborhood. As noted above, some owners have a hard time accepting the reality of their situation.
In the Future You Will Have Trouble Selling the Home
If you buy a stale listing, that means a lot of other people ruled it out before you. If many people ruled it out, it is likely that when you try to sell it, the same will happen. Of course, if you spend money upgrading the home, this may not be the case. However, a home’s reputation is not usually forgotten, and can be easily looked into via the local MLS.
Generally, if you plan on buying a stale listing, you are stuck with it for the long haul. But if you are not deterred, there are some tactics you should employ when considering putting in an offer.
How to Negotiate on a Stale Listing
The simple solution is to always hire a real estate agent. See my article (How to Find a Real Estate Agent – The Ultimate Guide). You want an agent who is local to the area and knows the history of the listing. Under almost all circumstances, this agent should try to talk you out of buying the stale listing.
When buying real estate, one should never become attached to a home. If you like a stale listing, consider it a long shot. Never feel that you must have the home. That is the main ingredient in the recipe for overpaying.