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Avoiding Critical Home Selling Mistakes

The selling and buying of a house can be a stressful and confusing process. Not only is it very expensive to ‘learn from your mistakes’ but very few people move often enough to gain the needed experience.

Although there is no substitute for doing your homework (start by asking your family and friends who have recently moved for their experiences) the following list of common pitfalls may be helpful.

  1. Pricing incorrectly (too high or too low).
    Make sure you determine the market value of your home correctly: If your asking price is significantly higher than what the market is currently bearing, many potential buyers looking for your style of home will view similar but lower priced homes first. Not only does this limit the pool of potential buyers but it also increases the chances that your home will sell for less than it’s actual value. This is due to the “discount” often associated with properties that have been on the market for a longer than average time. Buyers are often overheard asking their agent, “What’s wrong with that home? It’s been for sale forever.” Alternatively, if your asking price is too low, you are literally giving away your hard-earned equity just because you did not know what the market would bear.

  2. Failing to “showcase” your home.
    A little work can improve the first impression of your home a thousand-fold. First impressions are lasting impressions and can dramatically affect a property’s perceived value.

  3. Mistaking a bank’s appraisal or a new tax assessment as your home’s actual market value.
    These processes are based on general guidelines such as lot size and square footage, not the specific qualities and improvements of your home. Using either of these as a baseline could cause you to over-price or under-price your property. It requires detailed background knowledge of all recent neighborhood sales as well as homes currently for sale in order to estimate value accurately. Ask your REALTOR® for a detailed market evaluation.

  4. Choosing the wrong REALTOR® or choosing a REALTOR® for the wrong reasons.
    It is critical that you have full confidence in your agent’s experience and abilities. You want a REALTOR® who can explain the whole selling process to you, has a good feel for the market, has access to potential buyers and offers sound advice on how to improve your chances of selling. Try to avoid choosing a REALTOR® on the basis of which one gives the highest estimate of your home’s value. In order to achieve the best sale price within a reasonable period of time you need an accurate indication of what the true market value of your property is. Knowing this allows you to properly price your home, thus maximizing your chances of selling and allowing you to make your future plans with the sure knowledge that your goals can be attained.

  5. Failing to take current market conditions/trends into account.
    Is it a buyer’s market, a seller’s market, a balanced market? What do future trends look like? Ask your REALTOR® for a full analysis.

  6. Not taking advantage of market fluctuation.
    Moving up in a market downturn? If your $150,000 home has dropped 10% in value, so has your $300,000 dream home. Yes, you lose $15,000 on your current home, but you save $30,000 on your next purchase! Always keep in mind the big picture.

  7. Using “hard sell” during showings.
    No one likes being pressured. As well, buyers might wonder why you are so anxious to sell. Let your home speak for itself.

  8. Mistaking “lookers” for “buyers.”
    Many people who look at homes for sale may just be getting a feel for the market, seeing how others ‘showcase’ their homes, or even just looking for decorating ideas. Your REALTOR® deals with these situations on a full-time basis and has the experience needed to separate the “lookers” from the actual “buyers.”

  9. Relying too heavily on advice from the buyer’s REALTOR®.
    The interests of buyers and sellers are often opposing. In an agency relationship it is very difficult for one REALTOR® to look out for the interests of both the buyer and the seller. You want to make sure you are familiar with real estate relationships and the difference between being a client or a customer before accepting advice from an agent or entering into any formal relationship with an agent.

  10. Limiting the marketing and exposure of your property.
    Part of what a good REALTOR® does is to ensure that your property is showcased and marketed in the best and most productive manner possible. Not allowing a “For Sale” sign on the front yard, or limiting viewing times can dramatically reduce the number of prospective purchasers seeing your home and have a serious impact on your bottom line.

What to Expect When You Get an Offer

All the decisions have been made. The house has been prepared like a model. Advertising and marketing has begun. The listing is in the MLS and the showings are in full swing. Now it is time for the reason that all the work has been done: an offer. Also check out https://www.xtremecomforts.com/

An offer in Real Estate is a bit different than it is in many businesses. If a buyer asks a shopkeeper, “could I buy this for $10?” and the shopkeeper accepts the offer, the buyer can still change their mind and walk away. Not so when you are dealing in Real Estate. When a buyer makes an offer, it is in the form of a legal contract. If you, as the seller, accept the offer, the house is sold. If you counteroffer, negotiations may continue. It is important to understand that all of the offer and counteroffer activity that you will engage in is framed legally.

This is why it is so important that a seller never gets involved in oral offers and negotiation. If you have a house listed at $175,000 and the buyer asks “would you sell the house for $165,000?” Almost any response you make –short of “put it in writing”– can cause problems. If you verbally accept the offer, not only does the buyer have no obligation to actually buy the house, many will say to themselves, “Gee, that was easy …. I wonder if $150,000 would work?” This is why an agent will never deal in verbal offers.

Some important points regarding offers:

  1. If you intend to accept an offer (or make a counteroffer), do it as soon as possible. At any time prior to your acceptance or counteroffer, a buyer can withdraw their offer.

    EXAMPLE: Seller Jones receives an offer from Buyer Brown. The acceptance date on the contract is the next day at 6:00 PM. Seller Jones knows that he is going to counteroffer at a price just a bit over Buyer Brown’s offer. At noon the next day, Buyer Brown, in a cold sweat, withdraws the offer. Seller Jones is out of luck.

  2. Any changes made on the contract require written approval of all parties for the contract to be enforcable. Even seemingly minor changes open the door for either the seller or buyer to change their mind.

    EXAMPLE: Seller Smith receives an offer on his house. He accepts all of the conditions of the offer (selling price, financing agreements, etc.) except for one. He changes the occupancy date from July 31st at 12:00 noon to July 31st at 6:00 PM, wanting to give himself a bit more time for moving. If the buyers agree (in writing), there is no problem and the contract is valid. If the buyers change their mind about buying the house, however, the contract is not enforcable. There has been a change (the occupancy time) that has been approved by only one party to the contract.

What about low offers?
No matter how well you have prepared your house and how certain you are that it is priced at fair market value, there is always the possibility of receiving a low offer. It could be simply a shot in the dark, or it could be due to a limit in the buyer’s mortgage qualification ability. No matter what the case is, though, the most important thing to remember is do not take it personally. Many home negotiations, if they had just been allowed to run their course, very well may have come together acceptably for all concerned if the negotiations hadn’t fallen into a “grudge match”. Yes, it is your home, and yes, you have put a great deal of love and effort into it, but taking a low offer as a personal affront solves no purpose. Reject the offer or counteroffer it and move on.

If you do get a low offer, it is far more important to try to get as much information as you can relative to the offer. Why was it at the price that it was? What was the motivation of the offer? (Be aware, though, that if the offer has come from a Buyer’s Agent, the information you receive will only be as much as the Buyer’s Agent wants you to know. They owe their loyalty to the buyer and cannot disclose any information that may put their client at a disadvantage.) There still may be information that will be revealed to you, which will help you as you structure a counteroffer.

FaQ

Q: What does a real estate agent do for the seller?

A: Through his or her MLS contacts, the agent can expose the property to a great number of potential buyers. Many Brokers are tied to national relocation networks that attract transferees. They often are the most motivated buyers. The agent helps a buyer set the price by doing a market analysis, taking a survey of the house and property, and looking at recent comparable sales in the area. The agent will likely advise the seller to hire an appraiser and recommend a list of competent appraisers. The agent provides an eye-appealing yard sign, a description of the property, which includes lot size and tax information, plus an information sheet on the house including photograph. He also determines whether the property conforms to local codes, and helps the seller determine what steps to take to get the house ready to sell. The agent can provide a contract for a home warranty plan, and acts as a liaison between buyer, seller and the home Warranty Company. In the final phases of the sale, the agent oversees home inspection schedules, and keeps the seller informed on the buyers progress of the financing process.

Q: Why do people try to sell on their own?
A: Independence, spawned by fear a broker will pressure them. Or they feel they can successfully market the house and save the broker’s commission. According to nationally syndicated real estate columnist Edith Lank, fewer than 1 in 10 homes nationwide sells without a broker.

Q: How do you find a good real estate agent?
A: Look for a person compatible to your own personality, someone with training, experience, enthusiasm and a professional demeanor, someone referred by friends who have sold a home recently or an agent who specializes in your area or town.

Q: How much should I do to the house to get it ready for sale?
A: Give it good curb appeal by tidying up the lawn and planting flowers. Touch up exterior paint. Make sure the inside is spotless and uncluttered. Ask a friend or relative to store the excess from closets, attic, and basement. Repair small items such as silent doorbells, sticky doors, and drippy faucets. If major items such as the roof, carpeting or basement walls need substantial and costly repairs, get written estimates and have these available for buyers to read. Bargain accordingly.

Q: What’s the best way to negotiate?
A: If an offer meets your financial expectations and timing requirements, accept it. If the price is right but other details are wrong, counter the offer and keep the lines of communication open.

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