12 Common Mistakes to Avoid When Selling Your Home
Avoiding these pitfalls may save you thousands of dollars, and make selling your home so much easier…
The process of selling a home can be stressful enough, without unwittingly falling into a few common traps. Below, I’ve put together 12 mistakes made by sellers to help you have the best experience when selling your home.
Selling for the right price is important – very important. One of the most common and serious mistakes that sellers make is overpricing their property. They hope and pray that someone will pay “absolute top dollar”, but that is a long shot. Hoping does not replace solid market research. Overpricing usually results in a property being on the market for a very long time. This inevitably leads to poor offers by buyers who assume that the sellers will be in a more desperate position to sell, or that there must be something wrong with the home. I urge you to market your house at the right price from the start, and don’t be afraid to accept a fair offer if you receive one.
If you list your home for sale and an offer comes in early, it’s only natural to think that you may have set the price too low (assuming you’ve listed an asking price) or that you’ll keep getting more, higher offers. This scenario also applies to pre-auction offers if you are offering your property for sale by auction. In this situation, many sellers turn the offer down and wait for others to keep rolling in. And they keep waiting … and waiting. I can’t count the number of times I’ve heard a regretful seller say, “I wish I could go back in time and accept that first offer.”
The best approach is to treat every offer on its merits, i.e. don’t dismiss the offer solely because it’s an early offer. It might end up being the only one! If the offer is close to your target price then you need to consider it seriously. Remember, you still have the opportunity to make a counter-offer. Hopefully the other party will meet you in the middle, in which case you’ve just sold your home!
You should factor in a premium for selling your home quickly, because there are many financial and non-financial benefits that follow a quick sale.
This only applies to properties sold with an asking price. A great deal of work was done to set a target price, which was predominantly based on what the market is likely to offer for the property. A seller should trust the negotiating skills of their salesperson to justify to the buyer why they should pay the asking price. While adding a small margin is understandable, adding a large percentage (10% or more) could deter legitimate buyers who might not be able to afford the inflated asking price, or will assume that you are an unrealistic seller. Don’t take that risk.
It is understandable for a seller to want to avoid paying real estate commission, especially if they think they can do it themselves. If you have the skills to sell your own home, or if you have already found your own buyer, then by all means consider doing it yourself (consult your lawyer first though). However, statistics show time and again, in every kind of market, that you will get a better price and your house will sell much faster when you work with a reputable, hard-working real estate salesperson.
The true reality of a private sale is that buyers tend to factor in that the seller won’t be paying professional fees, and will often adjust their offer down to allow for this. So the private seller may take on all the extra workload & stress, with little actual benefit! When asked, most people agree that it is the net funds received after the sale is completed that matters to them most, rather than the amount of the success fee.
Over time, some homeowners fail to maintain their property adequately, and they allow its condition to slowly deteriorate. When it’s time to sell, the owner can be overcome by the amount of time and work it will take to bring the property up to a saleable condition, and consequently elect to market the home in a poor condition. In this situation, a seller may lose out considerably for neglecting to fix defects and other problems. A buyer will often discount their offer by more than the amount the seller would have spent had they fixed all the problems in the first place.
Of course, some properties are so dilapidated they are sold as ‘doer-uppers’ to DIY enthusiasts or developers. There is no problem with this, especially if the seller lacks the capital to do all the repairs and renovations.
When dealing with a professional real estate agency, disclosure of known defects is now a mandatory legal obligation during the listing process. If the seller fails to tell the salesperson of a problem with their property (e.g. – the fact that they didn’t get a building consent for the carport), it will almost certainly come up later, with negative consequences for the seller. Honesty is the best policy, and a skilled salesperson may be able to offer some suggestions to either fix the problem or minimise its effects.
When a real estate salesperson sits down with the home owner to develop the Marketing Plan, the seller can often baulk at the prospect of having to invest their funds into their marketing campaign. Similarly, when a property has been on the market for a while, the seller may become despondent and reluctant to keep investing in more advertising. They may think the salesperson should pay for the advertising and marketing out of their own funds. But the commission (success fee) is for selling the property, not marketing it. It is also worth noting that the salesperson only gets paid their success fee if the property actually sells. Effectively they are working for free up until that point, as every cent of the marketing funds they receive is used exclusively to promote the property.
Asking a real estate salesperson to sell your home without giving them an advertising budget is like asking a mechanic to fix your car without having tools & spare parts. They might manage to get the job done, but it’ll be difficult and will take them a lot longer. Remember, if you commit fully to the Marketing Plan, you might just sell your home faster and thereby end up investing less in advertising overall.
It’s impossible to foresee all the challenges that can arise when selling a property. Things don’t always go the way we want in real estate, and a seller needs to be ready, willing and able to make adjustments to their plan. You will get the best results if you are open to sensible advice from your professional advisors, and not be distracted by well-meaning, but often ill-informed friends and family. Your real estate salesperson has probably been in the same situation many times before. You are paying for their experience and expertise, so work as a team and take advantage of their advice.
A common example of this is during the final stages of negotiation. Sometimes the parties can be just a few hundred dollars apart and the deal is lost because neither party would compromise. Be flexible enough to create a ‘win-win’ situation.
There is nothing quite like a well-chosen, high-quality photograph selection to motivate a potential buyer to call the salesperson or attend an Open Home. Poorly produced photography may not eliminate a buyer, it will just leave them feeling neutral about your property. If you are paying for a large signboard for your front lawn, why not have stunning photos to maximise its impact.
Most real estate agents work with preferred professional photographers to take photos of the very best features of your property. A good photographer, with a good selection of lenses, can add thousands to the asking price of your home. More recently, walk-through HD videos, along with other modern digital marketing options, have become more readily available, and more expected by buyers. These extra initiatives are well worth your investment and may help make your home more appealing to prospective buyers.
You might be surprised to know that prospective buyers often go away after a viewing a property and continue to view the photos and video of the house they’ve just walked through several more times. Sometimes it is days later before they feel compelled to act on their attraction to these images.
You need to choose a real estate salesperson with strong credentials and a proven track record. They should be able to demonstrate modern marketing strategies to put your property in front of the right kind of buyers, and have strong negotiating skills. Avoid choosing a salesperson simply because you like them, or because they have worked for the longest time in your area, or because they said they could sell your property for the highest price (the biggest mistake!).
In a future blog I will share with you my thoughts on how to select the right salesperson. Watch this space…..
Most pet owners love their animals, and many of them assume others feel exactly the same way, but there are many people who don’t really like animals that much. Some are afraid of dogs, even little ones, or they may be allergic to pet hairs. Others are sensitive to animal smells and intolerant of animals living inside. This applies to real estate salespeople as well as potential buyers.
So it’s best to play it safe as far as animals are concerned. Before viewings and Open Homes, make sure you:
Some sellers list their property on the market, with a real estate salesperson, with little intention of selling. Sure, they will accept an incredible offer if they get it, but otherwise, they’re just testing the market. It takes a great deal of time, effort and money to sell a home. If you ask a real estate salesperson to promote your property and they find a buyer with a reasonable offer, it is extremely unfair to the salesperson and the buyer if you refuse to accept the offer.
If you want to take this approach, I would suggest you be honest with the salesperson at the beginning, or that you try to sell the property privately.