5 days ago
What causes a 'stale' home listing? How buyers can use it to their advantage
Homebuyers know the feeling all too well: You're several months into your home search, and the properties you're interested in are selling at lightning speed. But there's that one home that's been sitting on the market since you started looking.
Buyers pay close attention to the number of days a home has been listed for sale. And more often than not, once a property becomes a "stale listing," it is more undesirable to buyers the longer it sits on the market.
"Buyers start their search a year out. They're very well educated on the market and inventory these days," said Padraic Gallagher, founder and managing broker of Story Residential at Compass in Hoboken, New Jersey. "And so, when they see a property and then continue to see it not moving as they look over time, there's a stigma attached to that property."
Buyers may assume there's something wrong with these properties, especially in a market where things tend to sell quickly. But that's not always the case, and these homes may present a unique opportunity to otherwise struggling homebuyers.
What is a stale listing?
A stale listing is a home that has been on the market for an extended period of time without receiving any serious offers. The amount of time varies depending on the market and how fast other similar listings have sold.
"A stale listing is usually considered to be a property that's sitting on the market past the average days on market. Every type of property has a different average days on market," Gallagher said. "But a stale listing would be one that's on for longer than previous comparative listings."
There are exceptions to this, though, such as for luxury properties that tend to sit longer because they appeal to a smaller group of buyers.
There once was a time when the average home could be listed on the market for as long as two to three months, or even longer, before it would be considered stale. Steven Finkelstein, a broker-associate with Russo Real Estate in Teaneck, New Jersey, said this was the standard prior to the pandemic.
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"There's no doubt we've gotten very spoiled over the last couple of years now. Because of the lack of supply, we've gotten offers within a week or sometimes days after an open house," he said. "Under normal circumstances, it would not be surprising if a home sat on the market for at least a month before getting an offer. And during those times, we would consider something stale if it was on the market for maybe two or three months."
What causes a stale listing?
Listings can become stale due to there being something inherently wrong with the property, such as major structural issues, which is what buyers typically assume is the case.
But more often than not, Gallagher said, the biggest culprit of stale listings is overpricing. He said that regardless of how nice a property is, buyers will not be interested if they believe it's listed for more than it's worth. This also applies to listings where the seller raises their price after seeing a neighbor's house sell for more, he said, because it leads buyers to believe the seller could be "unreasonable."
"We're also definitely seeing more inventory come out, which is also a change right now because suddenly some of the prices that made sense over the last several months need to be adjusted to suit the demand and the rising inventory that we're seeing," Finkelstein said.
The timing in which a property is listed can also contribute to this, Finkelstein said. While properties are sold throughout the year, homes sell faster during the spring season, historically the busiest time for real estate.
Other common factors are that the property is situated in what's viewed as an undesirable location, or it's in need of some cosmetic upgrades. Poor marketing, or a lack of photos and information, can also discourage buyers from considering a certain home listing, both Gallagher and Finkelstein said.
What a stale listing means for buyers and seller
While buyers may want to stay away from listings that have become stale, Finkelstein recommends not counting these properties out of your search just because of how long they've been listed.
"If the price is the number one issue it could be an opportunity for them to possibly negotiate the price down," he said. "The seller might also be more apt to accept an offer that they otherwise wouldn't. In terms of accepting an offer, cash is the number one position and then we go into mortgages, with a conventional mortgage being more desirable than maybe an FHA loan or a VA loan. The seller may be more apt to pick some of the other types of loans, be more open-minded to taking a smaller down payment, be more open to a buyer's concession or more willing to loosen up some terms."
He also said that every buyer views a property with a different set of eyes, with some people prioritizing a move-in-ready space while others may have a vision for how they can upgrade a home. So just because others couldn't see a home's potential doesn't mean it's not the home for you.
On the other end, Finkelstein said sellers who find themselves in this position need to evaluate what they did wrong in the process, or if they were guided in the wrong direction by the agent. In addition to looking at the pricing, he said they should consider whether they need to make repairs that they initially weren't willing to do, or change the staging and marketing, to increase buyer interest.
"If a house is sitting on the market, a seller has to be realistic as well to say that their strategy isn't working," he said.
Gallagher said this shows why it's important for sellers to work with an agent that is knowledgeable about construction and home improvement. In situations like this, he said they can help identify improvements or modifications sellers may need to make in order to make the listing more desirable.
"Everyone's situation is different, so one person might be looking at a house as needing a big renovation while another person might think it's the perfect opportunity to get in and build equity. Or maybe the location is a big step up for someone who is in an otherwise bad location, while another person can afford to be more fussy," Finkelstein said. "All it takes it one buyer."
Maddie McGay is the real estate reporter for and The Record, covering all things worth celebrating about living in North Jersey. Find her on Instagram @maddiemcgay, on X @maddiemcgayy, and sign up for her North Jersey Living newsletter. Do you have a tip, trend or terrific house she should know about? Email her at MMcGay@
This article originally appeared on Stale listings explained: The hidden opportunities for smart buyers
