Should You Buy a House That's Been Sitting on the Market? Why Stale Listings Can Create Buyer Leverage

Homebuyers naturally gravitate toward new listings. A house hits the market Thursday, the photos look great, and by Saturday everyone wants to see it.

That's understandable.

But if I'm trying to find negotiating opportunities for a buyer, I also want to look in the opposite direction.

Show me the houses nobody is talking about anymore.

Show me the listing that's been sitting for 45 days.

Show me the property that went pending and came back.

Show me the house with bad photos, ugly carpet or an asking price that buyers clearly rejected.

In the right situation, a stale listing can create an opportunity that a brand-new listing simply doesn't offer.

And today's housing market makes that worth discussing. New-home sales fell 10.5% in July, while high borrowing costs continue to suppress buyer demand. Sellers have also been adjusting expectations: Realtor.com reported July asking prices were 2.4% lower than a year earlier as sellers increasingly priced for today's weaker demand rather than yesterday's market.

That doesn't mean every old listing is a bargain.

It means time can change the negotiation.

Why Has the House Been Sitting?

This is the first question.

Sometimes the answer is simple: it's overpriced.

Maybe the seller listed at $1.1 million when comparable properties supported something closer to $1 million. Buyers saw it, rejected the price and moved on.

Other properties have cosmetic problems. Terrible photography can hurt a listing. An outdated kitchen can scare away buyers. Bad staging, unusual paint or deferred maintenance can make a perfectly functional home look considerably worse online.

And sometimes there really is something wrong with the property.

That's why “days on market” isn't enough information by itself.

We need to understand why buyers haven't purchased it.

Time Can Change Seller Motivation

Think about the seller's experience.

Day one?

They're excited.

Their agent just listed the property. They've cleaned everything. The sign is out front. They're imagining multiple offers.

Day 10?

Still optimistic.

Day 30?

They're paying attention.

Day 60?

The conversation may be completely different.

Maybe they've already purchased another home.

Maybe they're carrying two housing payments.

Maybe they're relocating.

Maybe they're tired of keeping the house ready for showings.

Maybe they've simply accepted that the market isn't going to pay the price they originally wanted.

None of that guarantees a seller will negotiate.

But it gives your agent something worth exploring.

Don't Only Negotiate the Purchase Price

This is where the financing strategy becomes interesting.

Suppose a house is listed for $900,000.

The obvious strategy is:

“Let's offer $875,000.”

Maybe that's the right move.

But depending on the transaction, I'd also want to model whether a seller concession could create more immediate value.

Could the seller contribute toward eligible closing costs?

Could a credit be used toward an eligible temporary or permanent rate strategy?

Does the buyer need cash more than they need another small reduction in purchase price?

We can run the scenarios.

The point isn't that seller credits are always superior.

It's that purchase price is only one thing you can potentially negotiate.

A Price Reduction and Seller Credit Aren't the Same Thing

This distinction matters.

If a seller reduces the purchase price by $10,000, the buyer isn't generally saving $10,000 in cash immediately. They're borrowing slightly less money and potentially making a somewhat smaller down payment.

A properly structured seller credit can potentially reduce certain eligible costs at closing.

Depending on the loan and transaction, that can create a very different immediate financial impact.

That's why I like looking at the entire structure:

Price + credit + mortgage + cash to close + monthly payment.

Don't negotiate blindly.

What About a House That Needs Work?

This can be another opportunity.

Buyers frequently reject homes because they're cosmetically ugly.

Old flooring.

Outdated bathrooms.

Terrible paint.

A kitchen from another century.

Those things matter, but they're also potentially fixable.

If the location, lot and underlying property are right, we can compare the cost of buying the ugly house and improving it against purchasing the beautifully renovated property everyone else wants.

Renovation financing may also be available for eligible borrowers and properties.

You can't renovate the location.

You can renovate a kitchen.

What If There's Actually Something Wrong With It?

Then we need to know.

A long market time shouldn't convince you to ignore inspections, disclosures or property concerns.

If the house has significant structural problems, insurance issues, title concerns, unpermitted work or another major defect, the “deal” may not be a deal at all.

Negotiating leverage is useful.

Due diligence is still mandatory.

Builders Can Be Worth Negotiating With Too

This strategy isn't limited to resale homes.

The latest new-home sales report showed July sales falling sharply despite builders already dealing with affordability pressure. That can create situations where builders have incentives to move completed inventory.

Builders may approach negotiations differently from individual homeowners. Depending on the community and inventory, incentives can potentially involve closing-cost assistance, financing incentives, upgrades or price adjustments.

Again, nothing is automatic.

Ask.

Why Buyers Ignore These Properties

There's a psychological component to this.

People want what other people want.

A new listing with a packed open house feels desirable.

A property that's been sitting for 73 days feels suspicious.

Sometimes that suspicion is justified.

Sometimes it isn't.

The buyer willing to investigate why the house hasn't sold can potentially discover an opportunity everybody else simply scrolled past.

The Market Doesn't Need to Crash for Buyers to Gain Leverage

This is important.

People constantly ask whether the housing market is going to crash.

You don't need a housing crash to negotiate.

You need one motivated seller.

National prices could be flat.

Your city could be competitive.

And one particular homeowner might still need to sell.

Real estate is negotiated one property at a time.

That's why I'd rather analyze individual listings than sit around waiting for some dramatic national headline telling everyone that buyers suddenly have leverage.

Questions to Ask About a Stale Listing

Before making an offer, have your agent investigate.

How long has the property actually been available?

Has it been relisted?

Has the price changed?

Did a previous transaction fall apart?

Are there disclosures explaining why?

Has the seller already moved?

Is the property vacant?

What do comparable recent sales support?

And perhaps most importantly:

What does the seller need to make a deal happen?

That last question can be worth a lot.

The Bottom Line

Don't buy a house simply because nobody else wants it.

But don't reject one for that reason either.

The house that's been sitting for 60 days may have a legitimate problem.

Or it may simply have an unrealistic seller who is finally becoming realistic.

It might need $50,000 worth of improvements.

Or it might need $3,000 of paint and somebody with imagination.

You don't know until you investigate.

While everyone else is refreshing Zillow waiting for tomorrow morning's new listings, I'd also be scrolling backward.

Sometimes the best opportunity isn't the house everybody wants.

It's the seller who's finally ready to make a deal.