There are many factors you need to consider if you are selling your home. Even though the housing market has been showing signs of recovery, there is still an over-supply of inventory on the market. Buyers have a lot of options to choose from these days, from new construction to foreclosed properties, so home sellers must be prepared for the competition.
While the home selling process can sometimes seem a bit daunting, there are several things you can do to help ensure a smooth transaction. Here are some costly mistakes that home sellers should avoid making.
Mistake #1: Trying to Sell Without Doing the Proper Research
It is important for every home seller to prepare themselves for the showing and selling process. Do as much research as you can online — know the steps you’ll need to take and how to stage your home. Shop around for real estate agents and look at comparable homes in your neighborhood. Read through your current mortgage contract to review the rules regarding loan assumption and prepayment penalties. You must also determine where you are moving to, and whether you will buy a new home before yours is sold, or after. It’s vital to get all your ducks lined up and make sure that you (and the property) are ready to sell.
Mistake #2: Letting Your Emotions Get in the Way
Once you decide to list your house, you have to “let go” and realize that your home is now a product on the marketplace. Therefore, the home must be appropriately prepared, priced, and marketed like a commodity. You must learn to forget about what you want and how you feel, and focus on what the market bears. Don’t get upset if a buyer dislikes your design choices or wants to get rid of your beloved garden shed. Your priorities now are to sell and move on.
Mistake #3: Hiring the Wrong Real Estate Agent
There may be nothing worse than having an inexperienced real estate agent handling your home sale. Your agent must be someone you can look to for professional advice and knowledge. Don’t make the mistake of hiring your cousin, for example, just because they’re family. Make sure you shop around before selecting a real estate agent, and consider asking neighbors for recommendations. Your agent should have a solid track record and experience with properties in your local housing market. You also want to look closely at how long it generally takes them to sell a home. On the other hand, while some people do manage to successfully sell their home themselves (without an agent), you must understand the risk that comes with. In many cases, going it alone can end up costing you more overall than the price of an agent's commission.
Mistake #4: Being Unrealistic with the Price
The real estate market took a big hit during the financial crisis in 2008, and it’s been struggling to recover ever since. While some parts of the country are seeing their home values begin to climb back up, other regions are still riddled with foreclosures and underwater mortgages. You must be aware of the current market conditions in your neighborhood and be prepared to price your home accordingly. Don’t expect to get your asking price. Note that listing your property too high can scare buyers away from even coming to see the home. Setting a lower price tag, however, might bring in multiple offers and actually help raise the final sale price.
Mistake #5: Skimping on Marketing
Giving your home proper exposure is a key element to selling successfully. People can’t give you an offer if they don’t know your home is on the market. Go through as many advertising channels as possible, including local newspapers, online databases, and social media networks. Keep a good-sized “For Sale” sign on your front lawn to catch passers-by. You want to provide plenty of photographs of your property, particularly of the kitchen, bathrooms, and yard. It’s also a good idea to make a video tour of your home, which can be posted on YouTube and/or shared on Facebook. Make sure everyone knows your property is for sale, and keep checking that your real estate agent is advertising consistently for you as well.
Mistake #6: Concealing Problems or Not Disclosing Them
In most states, sellers are required to disclose any issues with the property (such as roof leaking, termites, or improper insulation). Even if you don’t reveal these problems up front, they will be discovered when the potential buyer orders a home inspection. It is in everyone’s best interest that you are open about any issues from the start. Therefore, you may want to get a home inspection before you list the property, since there could be problems that you don’t even know about. Try to fix as much as you can before putting your home on the market to make it more appealing to buyers and avoid any nasty surprises.
Mistake #7: Over-Improving Your Home
While it’s generally recommended for homeowners to upgrade their appliances (especially in their kitchen and bathrooms) to attract home buyers, you don’t want to take those upgrades too far. Ideally, you want to get the most “bang for your buck” when it comes to making home improvements — for example, a well-done kitchen renovation may cost $12,000 up front, but allows the seller to add $20,000 to their asking price. Run the numbers several times before going ahead with any upgrades to make sure you’ll get your money back. Look at comparable homes in your neighborhood to see how they’ve been improved recently so your home isn’t the odd one out. Spending too much on home upgrades can backfire if the buyers don’t care or are unimpressed. Remember, you are making the home ready for them not for you!
Mistake #8: Not Preparing Your Home for Sale
If you want your home to fetch a good price, it needs to be prepared and staged properly. This includes minor repairs (such as a leaky faucet, bare spots on the lawn, or a fresh coat of paint) as well as larger upgrades (like a new stove or flooring). The more issues you can take care of yourself, the more appealing your property will be. Buyers need to be able to imagine themselves building a life there, so your home should be clean and free of clutter. Keeping things clean on a daily basis is a good idea in case real estate agents want to drop by with potential buyers. Staging your home is a major part of getting it sold.
Mistake #9: Interfering with the Showing
Don’t be too eager by following buyers around during an open house. In fact, it may be best to make yourself scarce altogether. People want to be able to look around without feeling pressure from the seller or the agent. The less the buyers see of you, the more they can picture themselves living there. So don’t get in the way! Give buyers space so they can evaluate the property and discuss it on their own.
Mistake #10: Wasting Time on the Wrong Buyers
A lot of home buyers can get pre-qualified or pre-approved for a mortgage loan to give themselves more negotiating power. Some home sellers require a letter of pre-qualification or pre-approval to confirm that the buyer can actually afford the home. It’s also important that you know whether a potential buyer’s offer is contingent upon them selling their own home, since that could put you in a tricky situation (if they can’t sell theirs).
Selling your home is a complex process that will require you to do your homework and be mentally prepared. Even if you do everything you’re “supposed” to, unexpected scenarios can still pop up. Having a good selling strategy and making use of all the resources available will help you reach your goals and avoid the mistakes discussed above. Be patient and do the work, and you will be on your way to a smooth and successful home sale.