Many people rush into selling their homes, without thinking about the consequences of certain actions. Half the battle of selling a home is anticipating problems before they come up. Selling a home is a major life milestone, and it can be complex when you consider all of the steps involved: preparing and listing; making repairs; finding a buyer; navigating the closing process; and finally moving into your next place.
The consequences of a mistake in selling a property can impact your finances and most importantly, your peace-of-mind. And some of the some of the most common mistakes you should avoid when selling a home includes.
(A) UNDERESTIMATING THE COSTS OF SELLING:
The total cost to sell a home can amount to much more than the 5-6% in agent commissions most people expect to pay. When your account for closing costs, repairs, and other concessions to the buyer, the costs of selling can be closer to 10% of the sale price.
For example, if you move into your new home before selling your old one, you may have to rent a temporary place or pay for both mortgages as well as other carrying costs. Learn more about trading-in your home to avoid these costs. You can use a home sale calculator to estimate your net proceeds; the amount of money you’ll pocket after selling costs are accounted for. Knowing this information before listing can help you choose the best way to sell and give you a better idea of how much you’ll have to spend on your next house.
(B) INCREASE IN THE ASKING PRICE BY THE SELLER:
Seller’s greed can kill the market as fast as it was created. It is only natural that after hearing about others cashing in big selling their homes, most of the population expects and chases the same. The challenge comes when people get so infatuated with this seemingly quick way from rags to riches that they start demanding unrealistic prices or when they’re beginning to get several offers for their property, they take advantage of the opportunity of increasing the asking price of the house, which in turn chases most buyers. When buyers experience this sticker shock over and over again, they become defeated. Educated buyers won’t buy overpriced homes. They study other comparable homes in the area recently sold. They will go back two to three years, seeing how the average price of the homes in the area has shifted and a huge jump in just a few months is a red flag. The asking price must be defensible, which is why it is best to heed the advice of an expert real estate agent.
(B) SETTING AN UNREALISTIC PRICE:
The price you want and what the market will pay can be two very different things. You might hear the term Fair Market Value, which refers to how a home is valued when both the buyer and seller are reasonably knowledgeable about the property and neither is under any pressure to buy or sell. For the seller, it’s the sweet spot between asking too much or too little. If you can’t hit the sweet spot, you risk leaving money on the table or having your home sit on the market for a longer period of time, which can have consequences. You may have a general idea of how much your home could be worth based on homes with similar sizes and features that have sold near you. These comparable sales, also referred to as “comps”, are what many real estate agents use to suggest a listing price. The challenge is that no two comps are the same so you’d need to account for each difference between home features to be accurate. This is often called making adjustments, and it’s incredibly hard to do manually.
We use a robust valuation model to compare individual features for hundreds of pairs of comparable homes. This allows you to make a competitive offer based on market data, as well as inputs from sellers themselves.
(C). IGNORING MAJOR REPAIRS AND MAKING COSTLY RENOVATION:
A long list of maintenance issues can turn buyers off and potentially decrease the value of your home. More importantly, buyers expect the condition of your home to match the description. Consider prioritizing the most glaring issues, particularly those that are likely to turn up during a home inspection—many buyers will require an inspection before closing.
When we conduct home assessments, we look for items that are broken, in poor condition, or can affect the safety, structure, or functionality of the home. These are some of the most common repair’s items we find. If you’re preparing your home for sale, use our home maintenance and repair checklist as you inspect each space.
Many sellers also consider making renovations or improvements to increase their home’s value. Renovations can be costly, and you won’t always recover the cost in the purchase price. Furthermore, some buyers prefer to make their own renovations to personalize the space. Be sure to carefully consider any renovations if your goal is to add to the home’s value.
(D) NOT PREPARING YOUR HOME FOR SALE:
One of the challenges of listing your home on the market is showing your home to prospective buyers. Generally speaking, the cleaner, less cluttered, and more well-decorated your home is, the more appeal it can have. Moving.com suggests that clutter can make your home appear smaller and make it more difficult for buyers to picture themselves living in your home. In fact, staged homes sell 88% faster and for 20% more than those that aren’t staged, according to Realtor.com.
(E) CHOOSING THE WRONG AGENT OR THE WRONG WAYS TO SELL:
If you choose to work with a real estate agent, make sure you select an agent who has your best interests at heart. According to Realtor.com, some agents charge a flat fee, while others charge a percentage of the sales price, usually 5 percent. Sellers can negotiate the commission. To help ensure you’re getting the most bang for your buck, take the time to interview potential real estate agents. Check their licensing and credentials, talk with past clients, and make sure they have plenty of experience selling in your particular area and price point.
(F)NOT CONSIDERING YOUR BROADER FINANCIAL SITUATION:
Many sellers don’t have a clear picture of their financial situation before selling. This can lead to painful surprises. Before you make the decision to sell, it may be helpful to assess your income, debt, and any upcoming expenses during your move.
(G) LIMITING SHOWINGS:
Once you’ve put your home on the market, you’ll have to try to cooperate when your agent wants to show it. That could mean scampering out at dinnertime for a private showing, or vacating for several hours—or most of the day—for a weekend open house. The goal is to accommodate as many buyers as possible, even if their timing is inconvenient. If your house isn’t easy to show, it won’t be easy to sell either. While interruptions and added weekend planning may feel inconvenient, just remember the end goal—a good return on your investment that can support your next move. Selling your home is a major life-changing decision, but it doesn’t have to involve aggravation, frustration, or hassle. Steer clear of these classic mistakes and you might close your sale faster and easier than you’d have thought possible.
At the end of the day, you want the home selling process to be as smooth and painless as possible. Thinking about all the things that can go wrong might be overwhelming, but remember that knowledge is power. Now that you’re aware of some common mistakes to avoid when selling your home, you can be more confident when something doesn’t go as planned.
