Selling a home may seem like a simple process. You clean it up, show it to a few people and one of them buys it. The trouble is that the process is actually much more complicated, with legal and practical considerations you may not know much about. Sometimes, sellers make simple mistakes that could cost them big, even after the sale is complete.
Once you decide to sell your home, it can be helpful to start thinking of yourself as a businessperson and a home seller, rather than as the home’s owner. By looking at the transaction from a purely financial perspective, you’ll distance yourself from the emotional aspects of selling the property that you’ve undoubtedly created many memories in.
Here are common selling mistakes that could cost you money:
Pricing Your Home Too High
Some homeowners think that the most objective way to price their house is the price they paid for the property, plus the cost of improvements, in addition to the real estate agent’s fees. That list pricing rationale is not objective from a buyer’s perspective – and has little to do with market value.
Some sellers want to “test the market” by pricing high, but this is potentially the most costly seller mistake. Avoid playing games with pricing. Set it right from day one!
The listing price for a home must be based on a consideration of the present market value, which is typically estimated by a comparison of recent home sales and current listings for similar homes. While this may not mesh well with your expectations for the home, if you overprice your home based on sentimentality or a wish to “test the market,” you run the real risk of having the home sit on the market for months.
Pricing a home to sell quickly is not just efficient, but common sense. The fact is, the longer a home sits as an active listing, the more buyers start to wonder what is wrong with it. Overpriced homes don’t do sellers any favors.
The best way to avoid an overpriced listing is to listen to your real estate agent. Agents know the market and what comparable homes in your neighborhood have sold for in the past few months.
If you don’t listen to a real estate agent and base your listing price on an inflated view of your home’s value, you’re likely to end up selling after multiple price drops for less than you would have if you priced it right the first time.
Ordering Expensive Upgrades Shortly Before Selling
There is a big difference between getting a home ready for sale and undergoing extensive remodeling. The former is practical and can generate a better sale price, while the latter rarely results in an equal return on investment.
No matter how much money you could throw into your home, target improvements that are most likely to increase your return on investment. For example, updating your outdated carpet could help sell your house more quickly. While gutting the kitchen and rebuilding it from scratch will most likely cost you several thousands more than you will receive in increased home value.
Answer Incorrectly on the Seller Disclosure
During the selling process, you will complete and sign a lot of paperwork. Consider all of it legal documentation, and treat it with the utmost respect.
On the seller disclosure, homeowners are asked to indicate their knowledge about certain aspects of the home. Typically, they are directed to check “yes,” “no” or “do not know”.
If a seller confirms the good condition of a particular structure or system in the home and they are knowingly answering incorrectly, not only could it kill the deal, but even in a successful sale, the buyer may have grounds to seek remedies against the seller after closing. Hoping that a buyer or their inspector won’t find out about the leak under your bathroom sink or the fact that your basement gets flooded every winter is never a good idea. You run the risk of a nasty negotiating period – or worse, a lawsuit after the closing. To avoid such a scenario, home sellers should strive to be forthcoming about the information requested on the seller’s disclosure.
Selling Without a Real Estate Agent
There are homeowners who sell their homes without the services a real estate agent. However, these sellers take on a lot more responsibility for the sale of the home.
Selling For Sale By Owner is time consuming and difficult. It takes more than finding a yard sign on Pinterest and posting an ad on Craigslist. You have to spend time showing the property, make sure you have the correct paperwork required by your state, and spend hours reading and understanding the legalese of the contracts you’ll need your buyers to sign.
It is true that real estate agents charge a commission on the sale price as their fee. However, with this fee comes a significant amount of expertise and support for you as the seller. Also consider, the agent earns nothing if the home doesn’t sell – so they are assuming “risk” as well.
An agent can take out some of the high emotion by interacting directly with potential buyers, so you don’t have to; and eliminating tire kickers who only want to look at your property but have no intention to buy.
An agent will also have more experience negotiating home sales than you do, potentially helping you get more money than you could on your own. Further, if any problems crop up during the process – and they commonly do – an experienced agent will be there to handle them for you.
In general, selling your home without an agent makes other real estate agents and buyers hesitant to engage with you on a sale, because they know that they are probably not working with a professional or an expert.
Ignoring Expert Real Estate Advice
Sellers pay a real estate agent to be an expert to help them sell their homes with the least amount of stress. It is a service that is designed to make your life easier, and to net you more money at closing. You should be an active participant in the discussion about how best to sell your home, but all advice should be taken seriously.
Selling a home calls for amazing attention to detail. Homeowners who set reasonable prices, minimize major upgrades, follow their agents’ advice and maintain honesty in the selling process are more likely to sell their homes without hassle.
Failing to Prep Your Home for the Sale
Decluttering, cleaning and polishing shows off the condition of the house and lets prospective buyers imagine themselves in the space. Prepping the house is one of the biggest, most time consuming jobs, so if you’re considering skipping this step, it’s understandable – but don’t. If you want a better return on your investment and buyers to feel comfortable in your space, preparing your house is essential.
Not only should everything be scrubbed and shiny, you should also consider giving your walls a fresh coat of paint in a neutral color such as beige. Neon green walls are fine when you’re living there, but they could turn off potential buyers.
If you fail to declutter your home, your emotional attachment to your stuff could cost you thousands of dollars on the price of your home. Maybe that’s worth putting your keepsakes in storage until you can find the perfect place for them in your new home.
Prepping your home for the sale includes the outside. If you polish and primp the inside of your home but neglect to pull weeds or paint your front door, you run the risk of potential buyers leaving without ever entering your home.
Letting Your Pets and Kids Spoil a Sale
During the selling process, you need to recognize that while you love Fluffy and your darling twins, buyers want to visualize themselves and their own family in your home. Bribe your kids if you have to, but make sure the house is neat and as neutral-looking and smelling as possible. Take the kids and your pets out (or lock up pets) when prospective buyers are visiting. You never know if someone who is allergic or terrified of dogs or cats will be turned off from making an offer because of your adorable pet.
The road to a successful closing date is paved with mistakes, but now you know to take out the trash, paint your walls beige, list at your real estate agent’s recommended price, and to take your pets with you during a showing.
If your goal is to sell your home, the best thing your can do is hire a qualified Realtor to help with the sale – and then listen to their advice. Most Realtors are aware of the various moves that turn off buyers and can help you avoid them.
Or, you can buck the system and do things your way, but if your pink walls and leopard print carpet turn buyers off, don’t say you weren’t warned.
By Bonnie Marlow, Realtor