How To Avoid 7 Costly Mistakes When Selling Your Home

The decision to place your home on the market can involve a number of stresses and strains. Many home sales are motivated by circumstances outside your control: Job relocation, family problems, financial issues, divorce, and more. Others are related to family issues: The need for a bigger home, a better neighborhood, schools, etc.

Whether you’ve lived in your home two years or 20, you know it’s not just a shelter, or even another investment. It’s the place where your dreams come to life. In flower gardens and family rooms. Backyard barbecues and home-cooked Sunday dinners. It’s the place we raise our children. The nest we nudge them out of, and welcome them back to again and again.

And for some, it’s even our place of business.

But there comes a day when it’s time to move on. Time to reflect on old memories, and prepare to build new ones. Time to leave the past behind for a new future. It’s no wonder why buying or selling a home is often emotionally charged and potentially overwhelming.

Regardless of your reasons for selling, your goal is to sell your home for the most money, and in the shortest amount of time. And for the least amount of hassles and distractions.

Unfortunately, The Way Many Sellers Go About Selling Their Home Leaves Them Wide Open To The Very Problems They’re Trying To Avoid.

When you’re getting ready to put your property on the market, there are a number of things to think about, to prepare for, and to organize. Here’s a list of seven costly pitfalls to look out for when selling your home:

• Mistake #1: Failing to DRESS Your Property For Sale
• Mistake #2: Pricing Your Home Incorrectly
• Mistake #3: Limiting The Marketing Exposure Of Your Property
• Mistake #4: Thinking Your Appraisal Is The Market Value Of Your Home
• Mistake #5: Not Understanding Your Rights And Obligations
• Mistake #6: Signing A Listing Agreement With NO WAY OUT!
• Mistake #7: Selecting The WRONG Agent

Mistake #1: Failing to DRESS Your Property For Sale

Buyers look for HOMES, not houses. They buy homes in which they FEEL they would like to live. One of the major factors in getting your home to sell quickly is very simple: MAKE IT FEEL LIKE “HOME.”

Most buyers select their home based on EMOTIONS. Once their decision is made to buy, they justify their purchase with LOGICAL reasons: facts and features. So, it’s most important to make your home appeal to all senses. Your property is NOT the only home the buyers will see. You are competing with other homes in the market, and some of them have been professionally decorated.

The Way You Live In A Home, And The Way Your SELL A Home Are TWO Very Different Things

When you’re showcasing your home for sale, it’s going to look very different from the way it looks when you’re living there. Here are a few tips for showcasing your home for sale:

Mistake #2: Pricing Your Home Incorrectly

Every seller wants to realize as much money as possible when selling their home. The natural inclination is to price the home high, thinking you can always come down in the future.

But a listing price that is too high frequently nets the seller LESS money than an original price at market value. Why is this? Because people looking for homes in your price range will reject your home in favor of other homes in a reasonable price range.

And here’s the real clincher: Agents who would readily bring buyers through your home will automatically cross it off their showing schedule because it’s priced too high. They’re only motivated to show homes with the highest probability of selling. Agents simply will not show overpriced homes because they work by commission. They know market values because it’s their job to know. And they don’t want to waste their time.

So you price your home high, thinking you can come down. Problem is, the agent and buyer community don’t look at it that way. They see it as an overpriced home. After a few months go by, eight or 10 open houses, signs, agent tours…and not a nibble. So you decide to lower your price again. But it’s too late…your home has already been “branded” by the agent community. So you reduce your home a little more. And little happens.

Finally, in order to attract attention back to your home, you’ve reduced your home price more than you ever thought you would, and you’re now netting much less than if you had priced it correctly in the beginning. And think about this: The money you lost is not just the lower sales price, but all the extra interest you paid on your mortgage…all the extra property taxes and other carrying costs that accrue while your home is waiting to sell.

Real Estate Fact: The Seller Is Solely Responsible For How Much, And How Quickly Their Home Sells!

Overpricing almost always increases time to sell, and adds to your carrying costs.

Mistake #3: Limiting The Marketing Exposure Of Your Property

The most obvious marketing tools everyone uses (Open Houses and classified ads) are only moderately effective. Successfully marketing of your home (getting the highest price, at the right time, and with no hassles and problems) requires much more.

Surprisingly, less than 1% of homes are sold at an open house. Agents use open houses to attract buying prospects, not to sell your home. And advertising studies show that less than 3 % of people purchased their home because they saw it in an ad.

Mistake #4: Thinking Your Appraisal Is The Market Value Of Your Home

An appraisal is an opinion of value for an entirely different purpose than selling your home. Usually an appraisal is to provide a bank or mortgage institution information to fund a loan. If a lender is motivated to loan you money, his appraisal may come in higher than the true market value of your property. The appraiser might ignore other issues in his analysis, such as foreclosures in the market or distressed sales.

When a buyer looks at a home, they look at all the factors: foreclosures, distressed sales, bankruptcies, divorces, and area fluctuations. Don’t make the mistake of thinking the “appraisal” value of your home is what a diligent buyer would pay.

Mistake #5: Not Understanding Your Rights And Obligations

Real estate law and regulations can be very complex. When you sign a contract for the sale of your property, it’s a legally binding document. An improperly written contract can create many problems for you: a sale could fall through, cost you thousands in forced repairs, inspections, and remedies for items included or excluded in the purchase offer.

You must understand what repairs and closing costs you are responsible for in a contract. And you must know whether the property can legally be sold “as is,” or how deed restrictions or local zoning will affect your transaction.

You also need competent review of your title, and whether or not your property is in conflict with local restrictions or laws. If you have to remedy these items yourself, you can spend thousands on legal bills, fines, contractors, and other costs. Using a competent lawyer and/or Realtor up front can help identify and avoid these issues before they become “problems.”

If you decide to go about it on your own, you can find legal documents here.

Mistake #6: Signing A Listing Agreement With NO WAY OUT!

Just about every agent has good intentions about helping you sell your home. But situations and circumstances change. The agent might have personal problems, or simply decide to retire or get out of the real estate business.

Or other situations may arise where the agent isn’t doing his or her job as you expected. The home may not be getting the exposure you desire. Or perhaps you haven’t heard from your agent in six weeks!

What do you do now?

When this happens, you should have the right to fire your agent. But the listing agreement you signed is with the BROKER, not the agent. If you’re unhappy, the broker may assign your home to another agent – someone you neither personally selected, nor do you want. But you’re stuck with him or her until the listing agreement expires. And that can cost you a lot of money!

Always protect yourself by: 1) carefully selecting the right agent, and 2) make certain that in a “worst case” situation, you have the flexibility to modify or cancel your listing agreement.

Mistake #7: Selecting The WRONG Agent

Do you remember the old riddle that goes, “What do you call the person who graduated dead-last in their medical school class?”

Answer: “DOCTOR!”

Well, it’s the same with real estate professionals. Someone with vast experience and extraordinary professionalism usually costs the same as someone with little or no experience, or with compromising standards. You need to know how to tell the difference up front.

Bringing competence and experience into your transaction may mean the difference between a higher negotiated sales price and losing money, selling in less time or in more time (costing you potentially thousands in added interest), and experiencing problems and hassles or a problem-free transaction.

Our community is loaded with Realtors who are WRONG for you, your area, and your home. Some agents are in business part-time for a little extra cash. Others are subsidizing other businesses or careers. And then there’s your “cousin Harry,” who you may feel obligated to because he “really needs your business.”