Top Mistakes Sellers Make
Of course you want to sell your home for the most money in the least amount of time. The best thing you can do is know the common mistakes from the beginning and not make them! They can and will cost you money and cause you grief.
Pricing Incorrectly
Every seller wants to realize as much money as possible when he sells his home, but a listing price that is too high often gets the seller less than a price that is at market value. If your house is not priced competitively, people looking in your price range will reject your house in favor of other, larger homes for the same price. At the same time, the people who should be looking at your house will not see it because it is priced over their heads! Overpricing usually increases time on the market, and that adds to the carrying costs. Ultimately, many overpriced properties sell below market value.
Failing to “Showcase” the Home
Buyers look for homes, not houses, and they buy the home in which they would like to live. Owners who fail to make necessary repairs, who don’t spruce up the house inside and out, touch up the paint and landscaping, and keep it clean and neat chase buyers away as rapidly as REALTORS can bring them. If you were selling a car, you would wash it, or maybe even detail it to get the highest price. Houses are no different.
Mistaking Lookers For Buyers
For Sale By Owners always get more activity than houses listed with an agent. No question about it. REALTORS will only bring qualified buyers, and these will be fewer than if you open your front door to every one who walks down the street.
A qualified buyer is one who is ready, willing, and able to buy your house. We find that most people who go looking at For Sale By Owners are just starting to think about moving. They may be good buyers, but they’re just 6-9 months away from being ready. They don’t want to bother an agent yet, so they call the “By Owner” ads to get a feel for what’s available. They may have a house to sell first, or may need to save some more, or may have credit that needs fixing. When everything is in place, that’s when they go out looking with a REALTOR. An agent will ask a buyer how much he can really spend for a house, how much he has to put down, how good his credit is, how much he can pay each month, how much he will realize (realistically!) when he sells his present home – and about a dozen other questions like that. But unless your REALTOR finds all the facts first, you must ask all these questions before the buyer crosses your threshold. Otherwise, you may have a parade of Sunday afternoon shoppers with a dream of owning a home some day.
Limiting the Marketing and Exposure of the Property
The two most obvious marketing tools (open houses and classified ads) are only moderately effective. Surprisingly, less than 1% of homes are sold at an open house. Agents use them to attract future prospects, not to sell the house! Not only that, but open houses are a great way for your house to be cased by a burglar! Advertising studies show that less than 3% of people purchased their home because they called on an ad. And if a machine answers, most callers just hang up without leaving a message.
The right REALTOR will employ a broad spectrum of marketing activities, emphasizing the ones he believes will work best for you. There are dozens of more effective ways to find buyers than just open houses and advertising. By the way, he or a trained member of his staff will be there every time the phone rings. Did you know that most calls come in during business hours when sellers are away at work, and most home showings are between 9:00 and 5:00 Monday through Friday?
Believing that a Refinance Appraisal is the Market Value of Your Home
An appraisal is an opinion of value for a certain purpose. If the lender wants to lend you the money, they are motivated to have the appraisal come in high. The appraiser may ignore foreclosure or distress sales in order to justify the high value. But a real buyer in the real world will not ignore these properties. They are your competitors when you try to sell.
I can’t tell you how many ridiculous refinance appraisals I’ve seen. Don’t make the mistake of thinking that the value you were told 6 months ago when you refinanced is what a real buyer would pay. Ask your REALTOR for ALL the solds in your area, then decide.
The sale of your home could well be the most important financial transaction you have ever been involved with. The person you select can make it a satisfying and profitable activity, or a terrible experience. It’s your home, and your money. The choice of your REALTOR is up to you. Make that selection carefully.
Placing the Home on the Market at the Wrong Time
It can make a significant difference in price depending on what time of the year you sell your home. If you have the luxury of deciding the time of year to start marketing your home, talk to your agent to determine the best plan to begin.
Selling Without Professional Assistance
Although it is tempting to “save the commission” and sell your home without a professional real estate agent, but it is very likely that you will end up making a legal mistake that will haunt your for years or cost you a significant amount of money. Studies show that professionals can sell your home at much higher price than you can sell yourself, even after deducting agent’s commission. Why take risk and go through hassle when it is not worth it? Let professionals handle what they do best.
Not Cooperating With Your Agent
The agent needs your full cooperation to effectively market your home and bring in the highest priced offer in the shortest amount of time with the least inconvenience to you. Not cooperating with your agent may hinder her efforts.
Not Allowing a Lock-Box
If you do not allow your agent to put a lock box on your door you will miss a large number of potential buyers. Agents prefer showing properties with a lock box. If your home is not easy to show, many agents will avoid showing it to potential buyers.
Requiring an Appointment to Show Your Home
If an agent must make an appointment to show your home, you will miss a significant portion of potential buyers. The agent will first take the buyers to show properties that are easy to access and then if the buyers do not find a house that meet their requirements in the first few days, the agent will considers properties that are without lock boxes or require an appointment. Many times the agent sets up two or three homes to show, only to figure out at the first house that the buyer is looking for something totally different. That is when the agents laptop comes out and a new search begins. Usually, the agent calls from the road to schedule showings therefore gives very little notice. Be ready to show at all times!
Not Disclosing All Known Defects in Writing
If you fail to disclose all material defects in the house, you may end up getting into legal entanglements, the sale can be rescinded or seller can be held liable for monetary damages. A Seller Property Disclosure will be given to you at the time of listing the home for you to fill out and kept on file.
Not Maintaining the Housekeeping
Many sales are lost for not taking care of seemingly insignificant items, such as lawn maintenance, cluttered rooms, bad stains, dirty kitchens and bathrooms, unpleasant odors, etc. Imagine buying a home and then cleaning it. Prospective buyers seek home in an immaculate move in condition.
Overlooking Minor Repairs that are Needed
When selling a house, do not hold back on spending money on necessary repairs including house cleaning, painting, carpeting, or lawn maintenance. Without these your house will be difficult to sell and bring a much lower price than what you can save by avoiding these expense. Experience shows that even minor improvements will yield as much as three to five times the repair cost at the time of sale. It is not a good idea to plan on buying new carpet, air conditioner, etc upon the sale of the house. Install it now and get more money for your house!
Lavishly Over-Improving
While it’s important to fix whatever needs fixing to get your home ready for sale, undertaking a major project could cost more money than you would recover from the sale. Spending too much on remodeling projects just drains money out of your pocket. If your improvements will push your home’s value more than 20% over the average neighboring home values, don’t expect to recoup the entire cost. (Some major projects, however, like replacing a roof, should be done if they are needed.)
Negotiating Lower Commission
Many agents will offer their services at discounted rates, but keep in mind the same agent will try to save on marketing your property, will be less motivated to sell your property and will prefer to take buyers to full commission properties.
Making Decisions based on Emotions
You must realize that selling your home is a business transaction. Do not let your emotions cloud your judgment in making decisions.
Failure to understand market conditions
Before deciding on selling your house, understand the current market conditions. Is it a sellers or buyers market? Remember the price of your house will be dictated by the market.
Lack of a Solid Marketing Plan
In addition to attitude and motivation, chose an agent based upon offering a solid marketing plan that far reaches traditional marketing techniques. Also, ask for commitment to the plan in writing allowing you to cancel the contract if agent fails to meet the commitments.
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