The percentage of real estate listings that do not sell during their listing contract is commonly known as the “failure rate” or “expired listing rate.”
In a buyer’s market, the failure rate for listed homes increases significantly.
Under these conditions, you can expect the failure rate to be in the range of:
40% to 60%
This means that in a buyer’s market, 4 to 6 out of every 10 listings with a real estate agent will expire or be withdrawn without selling.
Why the Failure Rate Skyrockets in a Buyer’s Market
The dynamics of a buyer’s market magnify all the typical reasons listings fail:
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Extreme Price Sensitivity: This becomes the dominant factor. With an abundance of choices, buyers have no incentive to overpay. A home priced even 5% above its true market value will be completely ignored. Sellers who are emotionally attached to their home’s peak-market value are almost guaranteed to fail.
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High Inventory & Fierce Competition: The number of homes for sale (months of supply) is high. Your listing isn’t just competing against a few similar homes; it’s competing against dozens. Buyers can be extremely selective and will often make low-ball offers, knowing they have many other options.
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Longer Market Time (DOM): Homes sit on the market for months. This “stale” listing effect creates a negative feedback loop; buyers begin to wonder, “What’s wrong with that house that no one else has bought it?”
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Condition is Non-Negotiable: In a hot market, buyers might overlook dated kitchens or worn carpets. In a buyer’s market, they will not. Any home that is not impeccably staged, professionally cleaned, and in excellent repair is at a severe disadvantage. Buyers will simply move on to the next, more move-in-ready option.
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Stringent Buyer Demands: Buyers feel empowered to ask for significant concessions, including closing cost contributions, home warranties, and repairs for minor issues. Sellers who are unwilling to negotiate on these terms will often see deals fall apart.
The Profile of a Failed Listing in a Buyer’s Market
In this environment, a listing that fails almost always has one or more of these fatal flaws:
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Overpriced from Day One: The most common and critical mistake.
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Poor Condition: The home is visibly dated, cluttered, or in need of repairs.
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Ineffective Marketing: In a crowded market, simply putting a listing on the MLS is not enough. It needs superior photography, virtual tours, and aggressive promotion to stand out.
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Unrealistic Seller: A seller who refuses to acknowledge market reality.
- The Seller’s margin is too thin and does not want to (or cannot) lower the price – unless sells FSBO whereupon the price can be lowered without sacrificing the Seller’s profit – by saving on the cost of Agent’s commission.
Conclusion: While the normal-market national average failure rate is 20-30%, a buyer’s market is a much tougher environment. Success hinges almost entirely on aggressive, data-driven pricing from the start, impeccable property presentation, and a seller who is prepared to be highly competitive and flexible.