It’s easy to find lists of common homebuying mistakes, but home selling errors are harder to describe. They’re subtle, often involving mindset and attitude. Here are six home selling mistakes and how to avoid them.
1. Stop thinking of it as your home: Learn to live in a staged home
Even if you still sleep and shower in your house while it’s on the market, it’s not really yours anymore. One of the most common sellers’ mistakes is thinking that the home is still theirs once they’ve put it on the market for sale. It is easy to understand why but it should not be the case. Bear in mind that when a home is put on the market to be sold, ideally, it should be:
Depersonalized: this way the potential buyers are not getting enamored with your baseball collection, but they’re enamored with the house;
Decluttered: in other words, a blank slate so buyers can imagine putting their own imprint on it;
A showcase for any adaptable spaces or bonus rooms. Showing that a place is versatile and can be set up as a bedroom, a den, an office is always advantageous.
2. Selling your home As-Is does not mean without performing any home inspection: Get your property inspected before putting it on the market
You’re more likely to sell your home as-is, without paying for repairs or renovations, when you’re upfront about its condition and share the home inspection reports with prospective buyers. On the contrary, if you refuse to pay for the home inspections before marketing the property to the public, you are running the risk that the buyers whom you accepted an offer from will come back to you to re-negotiate a lower price after they paid for the inspections. Every single item described in the report(s) that is not marked as close to perfection will be used against you by the buyers to reduce their offered price. Learn more about the true meaning and purpose of the As -Is clause in the residential purchase contract.
3. Overpricing the home: Your home is your castle, not the buyers
It’s tempting to predict where neighborhood home prices will be in a few weeks or months and set an asking price based on that. It is also not uncommon for sellers to determine a selling price based on the money they need to buy their new dream home after they paid off the mortgage of their current property. Also, even in a seller’s market, don’t make the mistake of just throwing a house out there and think you’re going to get top dollar because there’s an inventory shortage. It will most likely not happen.
All of the above and any other relating logic that is not based on the current fair market value of the property by comparison to similar properties that recently sold in the same neighborhood, simply are a recipe for disaster. By pricing the residence too high, it could sit on the market longer than necessary and yield a lower-than-desired price.
4. Seeking multiple offers as an end, not a means
What’s the goal for clients to receive multiple offers? The aim is to capture the best price and terms by encouraging a bidding war. What are the most common means used in real estate to attempt to create a bidding war?
Pricing the property accurately which mean at fair market value or slightly under;
Setting a deadline for the offers. When this tactic works, a bunch of people submit bids and then they wait for their phones to vibrate with the good news that you’ve accepted the offer.
When to set the offer deadline depends mostly on the average days on the market of the surrounding similar properties that are currently for sale or recently sold in the area and/or the sellers need to close the deal quickly for instance when they want to use the proceeds of the sale of their current home to buy another property they’ve already put an offer on.
Here too, if the property is overpriced the chances for you to get multiple offers are slimmer.
5. Not taking yes for an answer: accepting the first offer you will receive
There are 2 situations where sellers could be in a position to accept the first offer, they receive:
The preemptive offer situation: an offer is made before the seller's designated date to hear offers/ offer deadline;
The no deadline offer situation: in this configuration offers will be presented by the real estate agent to the sellers in the order in which they were received.
In the above-mentioned situations, should you rush to accept the first offer you will receive as long as the price is decent, or will you gamble that an even better offer(s) will arrive soon? The most common example to illustrate this scenario is that you receive a cash offer with no contingencies that can close in 15 days. What to do… knowing that cash an offer usually comes at asking price or slightly under? I am of the opinion that you should not necessarily accept the first offer you receive. If the other party is in such a hurry to present their offer and give you only a few hours to say yes or no, that tells me that they know they can be bitten up by the competition. That said, the client decides not the real estate agent.
6. Be aware of the appraisal gap when choosing an offer: the highest offer is not always the best offer
The “appraisal gap,” occurs when the house appraises for less than the purchase price. The buyer typically has to come up with personal funds to bridge the difference. If they do not have these funds they will come back to the sellers and say sorry the property did not appraise at the price we offered we will pay you that price or we have to bail out of the transaction.
This is not good but there is worse: When the appraiser sent by the buyers’ lender to value the property comes back under the asking price the buyers ‘loan will usually be reduced to 80% of the appraised value. If the buyers do not have enough personal funds to pay the difference between the loan they were initially granted and the new loan (80% of the appraised value) they have no other choice than to cancel the contract. As an example, X got a $900K loan for a home he /she was willing to pay 1.2 million for. The value attributed to the property by the appraiser is 1 million. Therefore, X new loan will be 80% of 1 million which is $ 800K.
Therefore, before you accept the highest offer make sure your real estate agent does the math for you. If not, you will be back to square one .i.e. your home will go back on the market and the number of days you wasted dealing with an offer that should never have been accepted in the first place will show on the MLS. It is stating the obvious to say that the more days a property sits on the market the less likely you are to get an over-asking price offer.
Hope this helps;