Common Mistakes When Selling Your Home
There are many common mistakes when selling your home that can result in significant revenue loss, sale closing delays, and even legal headaches.
With careful research and planning, you can stack the home sale profit deck in your favor to win optimal profits.
Let’s explore some common home sale blunders and what you can do to head them off.
Choosing the wrong real estate agent
One of the most costly and common mistakes in selling your property is choosing the wrong real estate agent. In theory, hiring the wrong agent can cost you thousands, if not tens of thousands of dollars or more in lost profits, and days or months in lost time while your home languishes unsold.
Solution ~ Interview multiple agents
Instead of blindly hiring an agent that’s a “friend of a friend” or a relative, do your homework and interview multiple agents before deciding what all star performer you want to hire to get maximum return on your home’s sale.
Your home is likely one of the biggest investments you’ll make in your lifetime, so when it comes time to sell, it makes sense to hire a professional with a documented real estate track record versus turning over the reins to an unproven rookie.
Not choosing an all star real estate professional to sell your home, is like asking Little League baseball players to play in a World Series starting lineup.
Agent interview questions:
What’s your experience in selling homes in this zip code/neighborhood?
What are recent home “comps” in the area selling for?
How many homes/properties have you sold in the last year? What was the average selling price?
In addition to MLS, what advertising will you do to sell my home?
What’s your social media and digital media strategy for selling my home?
What’s the average time it takes to close on homes sold in my area?
Why should I hire you to be my realtor?
Seller’s agents and buyer’s agents possess different skill sets
Another factor to consider when hiring a seller’s agent, one that will “list” and sell your home, verus a “buyer’s agent”, one that will find a home for you to purchase, is that both agent types possess different skill sets.
The seller’s agent must be proficient in marketing and selling your home in its current location and be proficient in home pricing. Ideally, the buyer’s agent must be a ninja at ferreting out properties that will fit your needs, have a well connected network to hear of available properties before they hit MLS, and be a fierce negotiator in representing your interests as a buyer.
Granted, an agent can be equally talented in representing buyers or sellers, though it’s not a given that an agent will be proficient on both sides of the transaction table.
Failing to consider finances
It’s easy to underestimate the capital you’ll need in preparation for your home’s sale. Before selling your home, you’ll want to estimate and plan for all associated costs.
Expenses to consider:
It’s wise to consider investing in home staging to help your home sell faster and for more money.
From leaky faucets to roof repairs, it’s likely that you’ll need to put aside some funds to get your home in turnkey shape.
You’ll need to be mindful that as a seller you may pay upwards of 5 to 6% commission on your home’s sale. Typically the person selling the home pays both the buyer’s agent and seller’s agent commissions.
According to a recent survey, in the United States an average buyer’s agent commission is 2.65% and average listing agent commission is 2.72%. Real estate commissions are negotiable, however, so do your due diligence in investigating local realtor commission rates.
Depending on the current home market, sometimes buyers will ask the seller for concessions for assistance with closing costs, home repairs, etc.
In a “hot” real estate market where there is less inventory available, it’s less likely buyers will ask sellers for concessions. Conversely, if the market is in a downturn, with an abundance of properties available with decreased demand, buyers are likely to hit sellers up for concessions.
Depending on the amount of items you’ll need to move from your home and the distance you’ll be moving them, moving costs can be significant. You may need to budget for a storage unit, moving van, and/or mover service.
In the first half of 2021, the national average for single family home closing costs was $6,837 including taxes and $3,836 excluding taxes. The cost calculations included transfer tax, land surveys, recording fees, appraisal, settlement, lender’s title policy, and owner’s title policy.
Budget for your next home
You’ll need to plan a budget for your new home that may include repairs, upgrades like new cabinets, appliances, furniture, landscaping, and more.
Selling solo - FSBO
Selling your home solo, otherwise known as “for sale by owner”, at first glance may seem like a great way to cut the significant cost of real estate agent commissions and increase your home sale profit.
In many ways, choosing to sell your home sans realtor can be akin to watching YouTube videos to fix major car repairs without any prior mechanical experience. While selling your own home is doable, it’s important to weigh the cons with the pros before diving in the deep end of the real estate sales pool.
If you go it alone, there are many aspects you’ll need to be prepared for from a financial and time perspective including properly prepared legal contracts, optimally pricing the home, being available to show the home, marketing the home, etc.
A proven accomplished agent will have up to the minute knowledge of local area home pricing and be able to price your home competitively for maximum profit and a fast sale. A savvy agent will also be a skilled negotiator and can help you avoid administrative delays and prevent you from incurring legal quagmire.
Not investing in repairs to get your home sale-worthy can turn around to financially bite you when negotiating the sale and in limiting the buyer pool for those prospects that will only consider “turnkey” homes.
Using subpar videos and photos
Use of poor quality property videos and photos is a quick way to have buyer prospects “bounce” from your homes’ MLS listing or social media post to a more attractively marketed home.
The money Invested in high quality professional photos and videos can help you attract your ideal buyer fast which in turn can lead to faster closing times and a higher net profits.
Missing the optimal listing price
If you “miss” listing your home in the pricing “sweet spot”, you’ll risk having your home sit on the market if it’s priced too high. If it’s priced too low, you’ll stand to lose precious dollars on your home sale.
To price your home effectively, it’s important to do Comparative Market Analysis, known as “comps” in real estate lingo. The analysis will compare your home to other “like” homes with respect to features, size, and location, that have sold usually within the last 3 to 6 months.
It’s likely that your buyer prospects and their agents will come armed with their comps’ research when considering your home so it’s important you’ve done your pricing homework too.
Limited availability to show home
If you, in the case of FSBO, or if your home is MLS-listed with an agent, have limited availability to show your home you risk losing the sale.
Prospective buyers and their agents expect quick access to view your home. If there’s a hassle in scheduling a time to view your home, your prospects may lose interest.
Letting emotions get in the way
It’s easy to let emotions get in the way of making the most profitable decisions for your home’s sale. It can be hard to let go of and be open to negotiating on the home where you’ve made so many wonderful memories with friends and family.
To distance yourself emotionally from the transaction, it can help to visualize yourself as the home buyer or as the salesperson tasked with the home’s sale. Looking through a business lens, you’ll see things from a more balanced practical perspective that will help you glean optimal profit.
Failing to disclose specific home challenges
It’s true. You can run from disclosing problems with your home, but you definitely can’t hide. Your home, unless there is a waiver, will undergo an inspection by a licensed inspector, once the home is under contract.
The buyer’s home inspection will uncover any concerns with electrical work, heating and cooling systems, plumbing, sewage, and water. The inspection will also check for damage from fire, water, insects, and any other situation concerning the property’s valuation.
In addition, certain states have disclosure rules where sellers are obligated to disclose known home problems if asked by a buyer. Other states mandate voluntary disclosure by sellers.
Solutions for your home challenges can include fixing the issue prior to the sale, adjusting the listing sale price accordingly, or listing the property at comparable market value and offering the buyer a credit allowance.
Forgetting to present your home as a store front
If you don’t present your home as a “store front” you may lose prospective buyers to other curb appeal enhanced homes that are perfectly staged and can pass the most stringent “white glove’ test.
In fact, a recent real estate agent survey overwhelmingly attested that 94.25% of agents agree that “great curb appeal adds value to a seller’s bottom line.”
Similar to shopping in a high end brick and mortar retailer, buyers are more likely to purchase in a store with an inviting appearance that’s attractively merchandised and meticulously clean.
Thoughtful “first impression” touches like a neatly mowed lush green lawn, beautiful blooming flowers welcoming visitors at the home’s entrance, and a freshly cleaned and sparkling exterior are a few ways to add home buyer eye candy.
Not negotiating price
Being firm on your home price may not be the best approach to achieve maximum profits.
As a seller it’s wise to consider a negotiating strategy for your home’s sale. Negotiation options include but are not limited to: highest and best offer bids, bidding wars, enforcing expirations dates on counter offers, and rejecting counter offers.
Chances are your prospective buyer and/or their realtor has some offer flexibility and may not reveal their best offer out of the gate.
Depending on your home’s condition and the current housing market, your negotiations may include concessions for home repairs and/or assisting the buyer with closing costs.
Selling when you have negative equity in your home
If you sell your home when you have no equity or negative equity in your home, it may not be the best financial decision for you. It may be wise to consider increasing your home equity by investing in repairs and/or remodeling that will generate net profits when your home is sold.
Alternatively, it may be an option to rent your home and wait for an upturn in real estate prices prior to deciding to sell.
Not utilizing social media and word of mouth marketing
If you don’t leverage social media or word of mouth marketing, you may miss out on an easy and quick home sale.
There are many local “buy and sell” Facebook groups where you can share your home sale listing at no cost. Be sure to check each specific Facebook group’s rules to make sure your home sale post adheres to the posting guidelines.
Don’t forget to tap into your network with old fashioned “word of mouth” marketing. It’s worth mentioning to your neighbors and other connections that your home is for sale.
Not considering how the buyer’s financing can significantly extend closing times
It’s important to consider a buyer’s financing and how that will impact your home’s closing time. A cash sale will obviously close more quickly than USDA, FHA, or VA loans that may require additional documentation that can extend closing times.
Underestimating the time needed to sell your home
If you’re on a timeline to sell your home fast in the case of a looming foreclosure, estate settlement, divorce, move to another state, or other life event, you’ll want to start with the “hard date” when you need to have your money in hand.
Depending on the situation, it can take up to 60 days or more to close on a traditional real estate agent MLS listed sale, and that’s not counting the days or weeks it will take to prep your home for sale.
When you start with a cash-in-hand date in mind and work back from there, you’ll be better equipped to choose the best home sale route that meets your financial needs.
Not offering virtual tours
If you don’t offer virtual tours of your home, you can easily miss out on buyers that may not immediately be available to view your home in person due to a work schedule or being located out of state.
According to a 2021 National Association of Realtors Profile of Home Buyers and Sellers Report, 95% of buyers used the internet during their home search. Virtual home tours are a great way to help buyers decide to take the next step in viewing your home in person. Conversely, the virtual tour can save you and your agent time in not having to do personal home showings to buyers not interested in your property.
Skipping staging your home
Hiring a company to stage your home or even going the DIY route can help your home sell faster and for more money. Granted, staging in an upfront investment though it’s one that can pay off with added profits.
According to a National Association of Realtors Research Group report, 25% of buyers’ agents concurred that “staging a home increased the dollar value offered between 1% and 5%, compared to other similar homes on the market that are not staged.”
If home staging isn’t an option, at the very least, take time to ruthlessly declutter your home. Prospective buyers will appreciate a neat and tidy space they can visualize as their new dwelling.
Not “visually scrubbing” your home
Giving your home a visual “bath” by removing all personal items so prospective buyers view the home as their own versus a holiday visit to Grandma’s and Grandpa’s.
If personal things are strewn about the house, it may be a conscious or unconscious turn off for the prospective buyer - so much so that they don’t move forward with an offer.
Not giving your home the “white glove” test
A home that can’t pass the “white glove” test risks being passed by for a sale. It’s important to ensure every nook and cranny of your home is sparkling for those buyers that open every drawer, windowsill, and peak under every rug.
Let “game over dust bunnies” be your battle cry, and you’ll be sure to win over buyers with your commitment to clean!
Not considering how offensive or unpleasant odors can tank a sale
Offensive or unpleasant odors can send buyers packing even before they’ve had a chance to view the entire home. Smoke, fish, strong cleaning chemicals, pet odor, and mold are just a few smells that many people find repelling.
In addition, you can go overboard in mixing too many “pleasant” scents in an effort to entire buyers. For example, rose candles, cinnamon potpourri, and lemon scented furniture polish, when appreciated individually can be appealing. Mix that trio of scents together in a dining room, and you’ll have buyers scrambling for the nearest exit.
It may be wise to do a home “scent review” with your agent or friends in advance of your home’s showing to ensure a pleasing environment for the most discerning buyers’ noses.
Head off home sale mistakes with a careful planning to maximize profits and streamline your home’s sale
It’s understandable that with the stress involved in selling your home, it’s easy to overlook things that can derail your home sale and/or contribute to lost revenue.
It’s wise to review common mistakes in selling your home and make an action plan that prevents those pitfalls, streamlines your home’s sale, and maximizes your profits.
Rising Phoenix Real Estate
We’re a trusted, respected, and experienced real estate investor in the Dallas - Fort Worth and San Antonio area that can help guide you in making the best decision for your home sale.
We will provide you a fair value, fast cash offer for your home in a quick-to-close hassle free transaction that accommodates your needs.
Call us today at 972-544-1862 to get started in selling your home to a real estate investor.