Why a Used Condo Won’t Sell and What to Do: Appraisal, Price Cuts, and Agent Review

You want to sell your used condominium, but it is not moving. Your next home is already decided, the costs have already been factored in, and now you are wondering what to do. In a situation like this, where anxiety gradually builds, it is important to pause and think calmly. Is there a clear reason? Would it help to review the conditions or the sales approach? To help you take the next step without losing perspective, we will share practical information that can guide you.

Why is the used condominium not selling?

When a used condominium is not selling, the first priority is to identify the reason as clearly as possible. The right response differs significantly depending on the cause.

The main reasons it does not sell can broadly be divided into two categories.

Cases where the issue lies with the condominium itself

• The building has become older
• The facilities have become dated and less appealing
• It is not well organized and presents poorly

In this case, measures need to be taken for the condominium itself.

Cases caused by changes in the surrounding environment

• Market prices for used condominiums have fallen due to economic deterioration
• Many newly built condominiums have appeared nearby, reducing its relative appeal
• The real estate company has weak sales capability
• Popular nearby amenities, such as schools, are no longer there

In this case, it is necessary not only to take direct action on the condominium, but also to review the overall sales strategy.

First, clarify why it is not selling, then move on to the next measures. It is also important to understand how real estate information circulates when building a sales strategy.

What are four effective measures when it is not selling?

The four representative measures for a used condominium that is not selling are listed below. We will explain them in order of priority.

1. Increase the property value through renovation

Renovation means making substantial improvements to an existing building in order to create added value. It is an effective measure when the reason the property is not selling is its condition, such as age or outdated facilities.

Particularly important arewater-related facilities. Bathrooms, washbasins, and kitchens are the areas buyers care about most, and simply updating these spaces can change the overall impression significantly.

In addition, home staging is also effective after renovation. Home staging means using furniture and accessories to improve the appearance of the living space so that buyers can more easily imagine actually living there. Even if the property has been beautifully refreshed, an overly bare presentation can make it harder to close a deal, so it is worth using proactively after renovation.

2. Convert it to a rental until the real estate market recovers

When real estate prices are falling, used condominiums become harder to sell. It can also be effective to switch to renting it out and earn income while waiting for the market to recover.

According to the Land General Information Library of the Ministry of Land, Infrastructure, Transport and Tourism, the real estate price index for condominium units rose from 100 in 2010 to around 150 by the end of 2019. By contrast, after the Lehman Shock in 2008 and 2009, there were periods when it fell below 100. The timing of a sale has a major impact on price.

3. Use multiple real estate companies (general brokerage agreement)

There are two main contract types with real estate companies: an exclusive brokerage agreement and a general brokerage agreement. An exclusive brokerage agreement is an exclusive contract under which you ask only one company to handle the sale. It has disadvantages, including the risk of information being kept in-house and difficulty in judging an appropriate price.

If you want to sell a used condominium more quickly, it is advisable to choose ageneral brokerage agreementand work with multiple real estate companies in parallel. Reaching a wider pool of buyers increases the likelihood of closing a sale. For more detail, please also refer to the issue of property hoarding by real estate companies and the available countermeasures.

4. Lower the price (last resort)

Lowering the price is the simplest approach, but because it reduces the value of the property, it is best avoided where possible. Try the measures above first, and consider it only as a last resort if the property still does not sell.

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Frequently Asked Questions (FAQ)

How long does it usually take before a used condominium is considered difficult to sell?

In general, three to six months is considered a typical benchmark for real estate sales activity. If it still does not sell after that, there is a high likelihood that the issue lies with the price, the condition, or the sales method, so it is important to analyze the cause and take action.

How much of a price reduction is appropriate?

A reduction of about 5% to 10% of the market price is a common benchmark. However, avoid lowering the price too readily, and try other measures first.

How much does renovation usually cost?

If the renovation focuses mainly on bathrooms and kitchens, a rough benchmark is 1 million to 3 million yen. It is important to proceed while carefully weighing cost effectiveness.

Which is more advantageous for selling: exclusive brokerage or general brokerage?

If the property is not selling, it is often more advantageous to switch to a general brokerage agreement and work with multiple companies. However, that also increases the management burden, so the decision should be made based on your circumstances.

What should you keep in mind when converting an unsold condominium into a rental property?

After converting it to a rental, there may be restrictions on a later sale. If there is an outstanding home loan balance, you will also need to confirm the situation with your financial institution. We recommend consulting a tax accountant and a real estate company in advance.