The process of selling a house can be difficult no matter what is happening in the housing market. Saying goodbye to a cherished family home can be heartbreaking for certain homeowners who have created so many happy memories in their current place.
Some would rather jump straight to the exciting part—decorating and relocating to a new location. The majority of sellers aim to maximize their earnings. Whatever your situation, there may be many challenges on the way to the closing table, ranging from misunderstandings during negotiations and showings to unpleasant surprises during the inspection.
But if you work with an experienced and competent real estate agent, a lot of these issues can be avoided. Here are seven typical errors, for instance, that a lot of home sellers make. These may make you anxious, take up time, and reduce your earnings. Thankfully, we can assist you in avoiding these blunders and positioning yourself for a stress-free and prosperous selling experience.
1. Pricing Too High
A common belief among sellers is that they will get the most money if they set their prices high and wait for the "right buyers" to show up. Nonetheless, homes priced too high in the current market and in the specific neighborhood frequently remain unsold, which can cause a price decline in the long run.
On the other hand, if you price your house at market value, or even a little less, it may rank among the best within the price range of similar homes in your area that have recently sold. Your chances of getting several offers could rise as a result.
We'll do a Comparative Market Analysis (CMA), to assist you in determining a fair price. Using data from comparable properties that have recently sold in your neighborhood, this crucial research will assist us in determining the optimal listing price. This information is factual, not a guessing game. We create our CMA's as close to an appraisal as possible. Keep in mind, unless you have a cash buyer an appraisal will be a requirement of the buyer's lender.
We can assist you in identifying the sweet spot where you can attract customers without sacrificing profitability.
2: Attempting to Predict the Market
Our market has been volatile for several years now. We still have low inventory but that is accompanied by high interest rates. We are seeing more expired listings than we have in the past several years. Those homes were priced too high for the current market based on condition or location.
Prices in the Greater Phoenix and Scottsdale real estate market have been increasing continuously. Does that mean you should wait until it reaches the peak of value? How will you figure that out?
It is almost impossible to make a certain prediction about the market. Your next home's price might go up if you put it off.
This could reduce any extra money you make from the sale. Your pool of possible buyers is already smaller because of current high mortgage rates, which would also affect your next purchase unless you're paying cash.
If you need to sell and move for whatever reason, then you need to deal with the current market. We're not seeing it getting much better any time soon. Are you ready to downsize? Maybe there's a baby on the way and you need to get a bigger place. Or you have decided to move to a different area because of a new job offer. There are multiple reasons to make a move no matter what the current real estate market is.
3: Neglecting to Make Necessary Repairs or Updates
Buyers are paying historically high prices for homes now. They have high expectations for those prices.
Imagine if you are buying a different place after you sell yours. You will quickly learn prices based on the condition of other homes on the market, and this is based on all price ranges. Just because a place is priced in the millions, if it doesn't compare with other homes in the general area, it will get low offers or none.
Most buyers will have a home inspection. If a significant problem is not resolved, customers may reject the purchase, demand expensive repairs, or cancel the contract and get their earnest money returned.
Prior to listing your house for sale, it's critical to complete any necessary repairs in order to prevent these kinds of disruptions. You should consider having what is called a "pre-listing inspection." That way you can fix items that we know buyers will ask for and you won't be surprised when it comes to their home inspection.
An inspector will show every little problem. We will help you decide what repairs should be made, as we know how most buyers react to these issues.
4. Ignoring to Stage Your Home
Staging doesn't necessarily mean you have to pay thousands of dollars to get your home set up to attract the interest of most buyers. I have helped sellers get quick sales at above market value by walking through their homes and creating a list of things they need to do, and sometimes it's as easy as cleaning and rearranging furniture.
Is home staging guaranteed to net you more money with your sale? No, there is no guarantee as even the best stagers or interior decorators won't always hit what a particular buyer desires. Everyone has different preferences. But most professional stagers try to keep things as neutral as possible; they attempt to create a model home feel.
Interior staging can include cleaning, decluttering, and packing personal items away (you'll be able to unpack and use them in your new place) to painting, refinishing items like cabinets or floors, or replacing flooring (that can make a huge difference).
Exterior staging might include painting, refinishing or replacing the front door, cleaning up the front and back yards, cleaning windows (outside and inside), and planting some annual flowers to welcome buyers and create a welcoming first impression.
If you would rather do it all yourself (which most of our sellers choose), we can provide you with advice and recommendations or connect you with a qualified stager before your house is listed for sale.
5: Judging Offers Only Based on Price
The offer price is what most sellers look at first when reviewing offers. Even though money is important, an expensive offer has no value if it never gets to the point of closing or it doesn't give you the timeframe you need.
For this reason, it's crucial to take into account additional elements in addition to the buyer's offer, like:
-Purchaser requirements and financing
-The amount of earnest money
-Arrangements for other contingencies such as post-closing possession offered if needed
-Date of closing
You might not care about all of these items, but they can be important parts of an offer. You definitely want to know that your buyers are qualified to make the purchase. You might get multiple offers with mostly pre-qualified buyers. If you get a pre-approved buyer, you might want to negotiate with them first, even if their original offer isn't the highest. Here is the difference between pre-qualified and pre-approved.
Some sellers think that if a buyer ends up not qualifying for the mortgage then the seller gets to keep their earnest money. That isn't true unless they breached the contract. Even then, you would most likely have to go to mediation and wait to see if you have a right to any or all of the buyer's earnest money deposit.
With that said, the higher the amount of earnest money, the less likely a buyer would breach. But some buyers simply don't want to put a huge amount towards earnest money. For us, the pre-approved buyer with lower earnest money would be more important if we can get near to what we want in price vs. a buyer that puts up a larger deposit.
If you want to make sure your house is sold before looking for your next one, you might ask a buyer to allow you to stay in your home for a time period after the closing. You would have to pay the new owner rent for the amount of time you would be staying.
Most buyers don't want to do this because they weren't buying a new place to become a landlord. You would no longer be the owner of the home, but a short-term tenant. The buyer might have nowhere else to go.
We have resources for sellers in this predicament. There are multiple lenders and programs that offer different types of bridge financing. This way you would not be a Contingent on Sale or Close buyer on a place you want to purchase. That could go against you if you're up against multiple offers, and contingent buyers can be bumped by non-contingent buyers.
I have seen offers come through where the buyer wants to push out the closing date for whatever reason. Or a cash buyer wants to close in less than 2 weeks. Those timeframes might not work for you.
To choose the offer that best suits your needs and objectives, we can assist you in evaluating them and negotiating for you.
6: Taking Action Based on Feelings Rather Than Reason
I think most of us have some kind of emotions for the homes we have lived in for a length of time. But if you've made the decision to move you shouldn't let those emotions hinder you from negotiating an offer.
I have always figured that anyone who makes an offer on my home tells me they really like it. If it's a low offer they might be following advice from family, especially if they're first-time buyers.
Other buyers just need to win. They love negotiating and just want to see how low you will go. Some sellers are the same and can lose a sale by playing that game, just as a buyer could lose the house they love.
Don't get mad at them or their offer! I've seen so many sellers refuse to negotiate on the first offer they received because it was less than full price. They say they are offended and won't even give a counteroffer.
Some of those sellers wish they had been thinking without being offended because they never got a better offer, or another offer at all! I've been able to calm many sellers down and have gotten buyers with a lowball offer to come up to almost full price.
Another scenario I've seen more than once is when a seller refuses one offer and a second one comes in at the exact same price. These are two different buyers that did not know each other, but after seeing other homes in the area they both felt this was the price the home should sell for. In cases like this, the first buyers already purchased something else so we couldn't go back to them. The seller then accepted the second offer so they didn't lose these buyers.
You might hear a phrase that "the market sets the price." Buyer actions have a big effect on any market. A Seller's Market is when there are more buyers than available homes. The fact that there are more buyers ready and willing to purchase in a low inventory situation causes that kind of market. A Buyer's Market is when there are more listings than available buyers.
Buyers have seen and compared multiple homes. They know which homes are priced correctly and those that are priced too high. Sure, some will make those dreaded lowball offers. But in a low inventory market where there can still be multiple offers on the homes that show the best in the price range, buyers are less likely to come in too low - if the home is priced correctly to begin with.
A great deal of sellers experience hurt feelings or offense at some point during the selling process. Lowball offers sometimes come across as slights. Requests for repairs may come across as condemnations.
Sellers sometimes feel their agent isn't working in their best interests if it feels like the agent is trying to suggest what a seller should do. I feel I'm not doing my job if I don't make suggestions for my sellers to consider. I give them options and explain the consequences.
Try to make an effort to maintain composure and be open to making reasonable accommodations in order to get an accepted contract and get to the closing table. We can assist you in considering your options and offer logical counsel that keeps your best interests in mind.
7: Not Using an Experienced, Local, Full-time REALTOR®
Did you know that according to a recent National Association of Realtors® study, homes listed by agents sold for 22 percent
more than the typical for-sale-by-owner property? I have listed homes that started out as For Sale By Owners (FSBO's) and some of them even had accepted contracts.
Either the buyers never got pre-qualified and/or just didn't take the FSBO contract seriously. Some never brought in earnest money and most didn't follow any of the timeframes that would cause a breach of contract. Others just couldn't qualify for a mortgage.
Some buyers who could qualify didn't work with their lenders in a timely manner. There wasn't a real estate agent on the buyer or seller's side to push things along and converse with the other agent or lender.
As real estate agents we can't force the other party to do something, but we can certainly communicate with everyone and try to get the transaction on track. I've held many transactions together so my sellers could make it to closing.
Most sellers don't know Arizona real estate rules that apply no matter if you use a REALTOR® or do it yourself. The higher earnings attained by employing a more successful marketing and negotiating approach may more than offset the commission paid to your agent.
We're here to make sure all timelines are followed from getting an offer fully accepted, opening escrow, receiving earnest money, having the inspection done per the contract and negotiating buyer requests, to following up on the buyer's financing. I have programs to keep everyone up-to-date on the transaction.
Use a Knowledgeable Guide to Avoid These Pitfalls
Selling your house doesn't have to be a difficult process, although I will admit buying the next one is more fun. I have been there many times and I follow my own advice. I wouldn't expect a seller to do anything I wouldn't do to sell my own place.
I will create a personalized sales strategy when you choose me to list your home so you can sell your house for top dollar within your time frame, and with the least amount of stress possible. Reach out to me to arrange a no-cost consultation and receive a Market Analysis of your home. I will also share my comprehensive marketing plan with you and you're under no obligation. Call 480-906-1500.
Posted by Judy Orr on
Leave A Comment