What is a Stale Listing and Should You Buy One?
A stale listing is a listing that has a high number of days on market (DOM) in the MLS. This typically indicates the listing has been up for sale for a longer time than is common for that market. Depending on the market, a listing might be considered stale after only three to five weeks. The most important thing to understand when considering a “stale” listing is the reason or reasons why the listing has become stale.
Reasons for Stale Listings
There are a number of reasons a listing could become stale and languish on the market longer than other listings in the market typically do. Here are a few of those reasons:
1. There is a backlog of inventory for sale. When there are more homes available on the market to choose from, the length of time on the market often increases. If the listing is in an area where there are a lot of homes for sale, this could be a reason why it has earned a high DOM.
2. The listing is overpriced. This reason can become a double-edged sword because as the sellers lower the cost, it could cause buyers to perceive the price drops as indication that something is wrong with the property instead of considering it was overpriced to begin with.
3. A contract on it fell through. This reason happens when a listing is under contract and the buyer or their financing ultimately falls through and the contract is released. This is a very common reason for a listing to appear stale.
4. Issues with the location. This can happen when the property is located in a flood zone, near a loud highway or airport, on a busy street or other location that has unfavorable conditions.
5. There’s a problem with the home. Even if the seller is offering concessions, many buyers don’t want to deal with major repairs right away when they buy a property.
6. The seller is unmotivated. This could happen in a case where the seller is simply testing the waters on selling or has a high price point and isn’t willing to budge. An unmotivated seller will wait and let the listing sit on the market until a buyer comes along who wants to pay the price they’re asking for.
7. The property is simply outdated. Whether it is outdated inside, outside or both, this is an all too common reason for a listing to go stale. Many buyers don’t want to tackle renovation projects before or right after they move into a home and can be turned off by a listing that is outdated.
If You Proceed
If you decide you want to proceed and put in an offer on a stale listing, make sure you know all the reasons why the listing has become stale. You’ll want to make sure to get a home inspection contingencies clause in the contract and never waive a home inspection, especially on a stale listing. The contingencies clause allows you to back out if the inspector finds major problems with the home or issues of concern.
Ultimately, a stale listing could be a bargain in disguise, depending on the reason why it has become stale. If a prior contract simply fell through, that is less worrisome than a home that needs a new roof before you move in. Your agent can assist you in finding out all of the reasons for a stale listing and evaluate if those reasons present an opportunity for you or a pitfall.