That Home Has Been Sitting on the Market. Is That a Red Flag or an Opportunity?

You find a home you really like. Then you check the listing history and realize it has been sitting on the market for weeks, maybe even months.

Naturally, your first thought is probably: What’s wrong with it?

It’s a fair question. But a longer time on the market does not automatically mean there is something wrong with the house.

Maybe it was overpriced from the beginning. Maybe the photos didn’t do it justice. Maybe the seller turned down an offer early on that they now wish they had taken. Or maybe there are simply more homes for buyers to choose from than there were a year or two ago.

And sometimes, yes, there is an issue with the property that buyers need to understand.

For buyers, though, an older listing can create an opportunity. The key is figuring out why the home hasn’t sold before deciding whether you’ve found a good negotiating opportunity or someone else’s problem.

More Sellers Are Adjusting Their Prices

Homes simply aren’t flying off the market the way they did when inventory was extremely tight and buyers had very few choices.

In August, 49.1% of active listings nationally had received a price reduction, according to Realtor.com. Redfin also reported in late August that new listings had reached a four-month high while pending sales had fallen to their lowest level in six months.

But those are national numbers, and real estate is local.

Here in San Diego, I can show you two homes just a few miles apart and see completely different buyer activity. A beautifully presented, well-priced home in a desirable neighborhood can still generate immediate interest. Another home that comes on the market even slightly too high may sit.

That is why I look at days on market as information, not a conclusion.

So, Why Hasn’t the Home Sold?

Before deciding what to offer, I want to understand why the property is still available. Usually, it comes down to one or more of these things.

1. It Started Too High

This is probably the most common reason.

Sellers sometimes price based on what they hope to get rather than where the market actually is. And today’s buyers have access to plenty of information. They are looking at competing homes, recent sales, price per square foot, condition and location.

If a home doesn’t feel like a good value compared with everything else they’re seeing, they move on.

Eventually, the seller may reduce the price, but by then the listing has lost that important “new to market” momentum.

That doesn’t automatically mean the new price is a bargain either. I want to compare the current price to recent comparable sales and current competition, not to where the seller originally started.

2. The Marketing Didn’t Do the Home Any Favors

I see this more often than you might think.

Dark photos, cluttered rooms, poor staging, no floor plan, an incomplete description or simply failing to showcase what makes a property special can absolutely hurt a listing.

Sometimes I walk into a house with buyers and think, This is so much better than it looked online.

That can actually create an opportunity. If the home itself is good but the marketing failed to get buyers through the door, there may be less competition for a property that deserves another look.

3. The Condition Is Scaring Buyers Away

There is a big difference between a dated kitchen and a major property issue.

Paint, flooring and an older kitchen are things you can usually quantify pretty easily. A roof nearing the end of its life, water intrusion, foundation concerns, major electrical issues or difficulty obtaining insurance are another story.

That doesn’t necessarily mean you should walk away. It means you need to understand exactly what you are buying.

This is where disclosures, inspections, contractor estimates and good due diligence really matter. The question isn’t simply, Does the house need work?

The better question is: Does the price make sense once we factor in that work?

4. It Was Under Contract and Fell Out

This one always gets buyers' attention.

A home goes pending, comes back on the market and immediately everyone wonders what the previous buyer discovered.

But don’t automatically assume something terrible happened.

The buyer could have had financing issues. Their circumstances may have changed. They may not have been able to sell their existing home. Or, yes, an inspection or appraisal may have uncovered something that caused the transaction to fall apart.

I want to know what happened.

If there were inspections or reports completed, we can ask whether they are available. If repairs were requested, we want to understand those too.

The history matters, but it doesn’t necessarily tell the whole story.

5. The Timing Was Just Bad

Sometimes there is absolutely nothing wrong with the house.

Maybe it came on right before a holiday. Maybe several competing homes hit the market at exactly the same time. Maybe the seller had very specific timing requirements that made the property difficult for some buyers.

This is also why understanding the seller’s motivation can be just as important as understanding the house.

A seller may care about price, but they may also care about certainty, timing, a rent-back, a longer escrow or coordinating the purchase of their next home.

That information can help us write a stronger offer without necessarily offering more money.

Questions I Would Ask Before Writing an Offer

If you are considering a home that has been sitting on the market, these are some of the things I want to know:

• How long has the property actually been on the market, including previous listing periods?
• Has the price been reduced, and when?
• Has it been under contract before?
• If so, why did that transaction fall apart?
• Are previous inspection reports, disclosures or repair invoices available?
• Are there known insurance or financing concerns?
• How does the current asking price compare with recent nearby sales?
• What improvements or repairs would you realistically need to make during the first year?
• Is there something besides price that is important to the seller?

Those answers can tell us whether we are looking at a marketing problem, a pricing problem, a property problem or potentially a really good opportunity.

Days on Market Does Not Automatically Mean a Desperate Seller

This is an important one.

Buyers sometimes see 60 or 90 days on market and immediately think, Great, let’s offer $200,000 less.

Maybe there is room to negotiate. Maybe there is a lot of room.

But days on market alone don’t tell us that.

Some sellers have substantial equity and no urgency whatsoever. Others may already have reduced the home to the lowest number that makes sense for them.

My approach is to look at the data, the condition of the home, the competition and what we know about the seller’s situation. Then we can decide where there may be an opportunity and build an offer that we can actually support.

What This Means for San Diego Buyers

The San Diego market has changed.

Buyers have more choices in many neighborhoods and price ranges, and homes that are not positioned correctly from the beginning can sit longer than sellers expect.

But San Diego is also incredibly neighborhood-specific.

A home sitting for three weeks in Rancho Santa Fe can mean something very different from a home sitting for three weeks in Poway, Encinitas, Rancho Bernardo or Solana Beach. Even within the same ZIP code, price point and property type can completely change the picture.

So if you find a home you love and notice that it has been sitting on the market, don’t automatically cross it off your list.

And don’t automatically assume you’ve found a bargain either.

Look at the history. Understand the condition. Find out what happened before you got there. Compare it with what has actually sold.

Then determine what that home is worth to you in today’s market.

Sometimes the listing everyone else has stopped paying attention to is exactly where the opportunity is.