Selling a house will likely bring in the most significant payday you've ever had. It is easy for sellers to get in over their heads when selling a home, and when this happens, they will likely leave money on the table. Let's take a look at some home-selling mistakes and how you can avoid them.
Tips and tricks on how to get the most money out of your home.
Pricing The House Too High
What's the first thing a potential home buyer notices about a home for sale? The price, of course! Pricing your home accurately according to your local market conditions is vital since an overpriced home could increase the number of days it sits on the market. Pricing the home right the first time will increase interest, translating into more buyers stepping foot inside your home. The more buyers who see your home, the better the chances of getting an offer are.
When preparing the sale of your home, you should research how much similar homes in your area are selling for. Here are some of the topics to compare:
- Number of bedrooms
- Number of bathrooms
- Square Footage
- Garage or covered parking spaces
- Property type (single-family home, condo, etc.)
After you see how much similar homes have sold for, you should be able to come up with a realistic listing price.
Taking It Personally
For many people, the house they are selling is more than just a place to store their belongings. It is a place where they raised their kids and celebrated holidays. It's a reflection of themselves, and hearing criticism can be challenging. Whether the criticism comes in negative feedback after a showing or a low offer, sellers need to find a way to take emotions out of the equation.
It's important to remember that selling your home should be treated as a business transaction. This is one area where a licensed real estate professional can help. They can often soften the blow of any negative feedback and try to make you see the buyer's point of view.
Bad Photography or Staging
Since most home searches begin on the internet, the photos you use of your home are crucial to generating interest. To prevent home buyers from continuing to scroll through to other listings, you need to make sure your marketing photos are of the highest quality. If you have dark, blurry pictures or just an overall low quality, the chances that homebuyers will stop to take a look at your listing are slim to none.
Professional home photography is pretty standard these days, and for a good reason. According to the National Association of Realtors, the use of professional photographs helps to sell a home 32% faster.
Professional photographers know what angles the best capture a room and take photos that enhance the focal points of space that home buyers want to see. They also make the most of natural lighting in your home, as well as subtle editing software to make your photos look like an accurate representation of your space. Staging also helps with photos and showings since the home stager will work in conjunction with the photographer to choose pieces that will make you appear more prominent.
Not Making Your Home Available For Showings
When your house is for sale, you need to do everything in your ability to make the home available for showings at any time of day. Some people are only available in the middle of the day on a Tuesday to see the house, while others may only be available at dinner time on a Sunday. Yes, this can be inconvenient, but if you don't cater to the potential home buyer's schedule, there's a good chance they'll decide to move on to the following listing and not give yours a chance.
You want as many people to see your home in person as possible. Will it be challenging to keep your house clean if someone wants to schedule a last-minute showing? Absolutely. Will you have to change up your routine? Most likely. But doing this is the best way to make sure your home sells quickly and for the highest price possible. Remember that the market is racing in most places, so this won't last forever.
Pro Tip: Using a Bluetooth lockbox and a home scheduling application will significantly reduce the sellers' stress during this period. With a scheduling service, you can list dates and times your home is available to show that agents must comply. And with the Bluetooth lockbox, you can give the licensed agents who scheduled the showing the ability to enter your home without you having to be there.
Only Considering the Highest Offer
Accepting the highest offer sounds like a no-brainer, but it isn't quite that simple in real estate. Many offers come with contingencies that must be satisfied before the transaction can close. Contingencies that are written into the purchase contract protect the buyer from losing their earnest money in the event they are not able to close on the home. Some contingencies are pretty straightforward like the buyer has to get a mortgage before the transaction closes. Others can be more complex like the buyer has to sell their house, which has not yet been listed for sale before they can close on your house. That sounds like it could potentially put you in a bad spot.
You need to read through the entire offer and not just the dollar amount the buyer is willing is to pay before you open escrow. If there are multiple offers on the table, it would be wise to see which is the "cleanest," meaning it has the best chance of closing on time without hiccups.
Ignoring Major Repairs
Before you put your house on the market, it's a good idea to make any significant repairs that your home needs. Chances are, whoever buys your house will have a home inspection and expect those repairs to be taken care of before closing anyway, so instead of potentially jeopardizing or delaying anything during escrow, get it taken care of now.
Choosing the wrong agent
Not all real estate agents are the same. Many are inexperienced, lack discipline, and will not work in your best interest. An inexperienced agent will end up costing you thousands of dollars. On the other hand, an excellent real estate agent will be on top of everything to know when selling a house and guide you through the process with ease. To avoid working with an inexperienced agent, you should interview a few agents before committing to one. Ask them how many homes in the area they've recently sold and what their average price point and days on the market are. You could also ask friends and family for a referral of an agent who went above and beyond.
If you can't find a real estate agent who checks all of the boxes, you may be wondering, "can I sell my home myself?". The answer to that is yes; you could consider taking the agent out of the equation altogether and going about the home sale yourself. Let's look at the pros and cons of selling your home yourself.
Pros and Cons of FSBO
Selling a home in a process known as for sale by owner, FSBO for short, can be risky, but it could also save you a lot of money. Here are some pros and cons to consider:
Save money on commission – Although there is no "standard" rate, you can expect to pay at around 6% of the home's purchase price in real estate commissions. So, if you sell your home for $700,000, that equals $42,000 in commissions. Removing the sales agent from the equation will save you that fee. It is worth noting that many homebuyers will insist on having a real estate agent represent them, and it is customary for the seller to pay for their agent. So, you will most likely still need to pay a commission for the buyer's agent.
More control – A real estate agent is usually the person who talks to the title company, home inspector, other agents, and any other parties to the sale of the home. If you don't have an agent, you can do all of those things yourself, and you won't miss out on any information. You will be in control!
Lack of real estate knowledge, including negotiation – good real estate agents know what fees to negotiate to maximize the money you make on the sale of your home.
Liability – Real estate agents have something called errors and omissions insurance, and if something happens during a transaction, sellers and agents are covered. However, you don't. Buyers can come back and sue you if part of the agreement was done incorrectly by you, and it doesn't have to be something big. It could be something as small as listing marble countertops when they are granite, and now the buyer wants money back for it. If you had hired an agent, their insurance would cover it. If not, you're responsible. You could always consider working with a flat-fee real estate agent who will administer the paperwork and take on any liability that goes along with selling a home but does not cost as much as a traditional agent.
Slower sale – A Realtor has access to more marketing opportunities and will therefore sell your home more quickly.
Hopefully, if you're preparing to sell your home, you now know what common mistakes to avoid. It's a great time to be a home seller, good luck!