Many homeowners make pretty common home selling mistakes, whether selling privately or with the services of a real estate brokerage. Since home selling doesn’t happen every day for most people, they tend to make subjective decisions based on little to no experience.
However, due to an extremely high real estate industry attrition rate (most fail within their first 5 years in the business, with about half generating one of zero transactions annually), though they may claim otherwise, many licensed real estate sales representatives also lack the experience and confidence necessary to effectively guide a homeowner through the sometimes complex steps involved in selling their property, thereby avoiding common home selling mistakes.
Over the years, I’ve listened to countless homeowners describe previous regrettable experiences, some of them nightmares, while trying to sell privately or with an agent. And virtually every scenario was avoidable if smart, fully informed choices had been made at the time. I realize hindsight is 20/20, but home selling mistakes that resulted from such critical choices could possibly have been avoided with a little RCR.
Knowledge is readily available to anyone who cares to invests a little time and effort to seek it.
Below are several common home selling mistakes made by homeowners who either failed to do sufficient RCR before making critical decisions, or were poorly advised by their Realtor®. Or they were advised wisely, but chose to ignore that advice.
If you have a home selling mistake story, whether disastrous or humourous, and care to share it, at the bottom of this page is a submission area. By sharing, you could help others avoid making the same mistake. Or if in hindsight, it's a funny story, to share in your laughter.
Every seller obviously wants to obtain the highest price possible for their home. Ironically, the best way to accomplish this is to ask a reasonable price to begin with. List too high and most prospective buyers won’t even inquire about the property, let alone view or offer on it. Since the introduction of the Internet, buyers are much more informed about market values, thus can usually no longer be duped.
Overpriced listings tend to grow stale and eventually expire unsold. (The number of expired listings usually exceeds the number sold.) Or if the asking price is reduced after a period of time with no action and it finally sells, the sale price will often be even lower than what might have been obtained if listed realistically in the first place. Remember – there’s a buyer for every property, but at the right price. Click here for more advice on setting the right price.
to mistake #1 is the second most common mistake made by homesellers. If they
over-price their home, after a period of poor activity, they fail to reduce the
asking price soon enough. They initially list too high because they want to
“try it for awhile”, believing their home is worth far more than what the
market will realistically provide them. Or they fall into the trap of believing
that a buyer can always “try an offer”. I've actually heard a homeowner suggest that all the buyers out there are idiots if they don't see the value!
This strategy does work occasionally, but in today’s hectic marketplace, buyers generally refuse to even view listings owned by dreamily misinformed homeowners. Remember – buyers are much more informed nowadays. Plus they’d prefer to avoid insulting a homeowner by offering what they perceive as a fair price. Click here for more help on effective pricing.
Though easily addressed in many cases, except when major renovations are indicated, this completes the top 3 most common home selling mistakes.
When attempting to sell a home through a real estate brokerage or privately, a seller should not forget to make their home look as attractive as possible. To enjoy the best results, a wise seller must put their best foot forward, so to speak. Washing and waxing a car before advertising it for sale is pretty standard, right? Prior to beginning marketing ...
Repair. Clean. Polish. Purge.
A poorly maintained house, inside and outside, will definitely turn off some buyer prospects and will often result in a lower sale price. So, prior to beginning the marketing phase, it's wise to properly prepare your property. Click here for more advice on home staging.
that a value resulting from a formal appraisal prepared for refinancing or legal
purposes will necessarily be the same as fair market value. To encourage their refinancing
business (hence improve their bottom line), lenders often estimate the value of
a property to be higher than it actually is. Conversely, a lender appraising a property for a buyer's loan may very well be more conservative and evaluate it at a lower amount.
A prudent homeowner, who prefers a
private sale, will seek an opinion of market value from a local Realtor® (for a
small fee, of course, if there’s to be no listing). The agent will prepare a
Comparative Market Analysis (CMA), which is a report and considered opinion of
neighbourhood sales as well as active and expired listings of comparable
When it comes to their own castle, it’s very difficult for a homeowner to be anything but subjective. And since they’re emotionally invested in it, that’s quite understandable. It’s their own home, decorated, furnished and improved according to their own personal tastes and standards. In their eyes, it’s perfect, and falsely believe it will be the same for buyer prospects.
But to arrive at an evaluation that likely reflects fair market value, they must be completely objective, and see it through the eyes of a stone-cold, judgemental stranger. That’s one of the major advantages of hiring a Realtor®, and why many private sale attempts fail. Click here for more on what a real estate agent can do for you.
This mistake is quite common for both private sellers and untrained Realtors®. There’s a right time and a wrong time to attempt a close on a buyer prospect. If a homeowner (or the showing agent) times it wrong, the result will likely be the buyer prospect running for the door.
Don’t rush them. Be attentive, friendly and respectful while watching for signs of sincere interest. Then, at the right moment, attempt a trial close by asking them how they ‘feel’ about the property, or when they’d like possession, or if they want the appliances included. Click here for helpful hints on selling your own house.
An enthusiastic buyer prospect may cause a seller to feel that their home selling efforts may soon prove fruitful. However, due to insufficient income and/or down payment or a poor credit report, the buyer may not be able to afford to buy the property. Even a dump will appeal to someone whose living standards and financial worth are both very low. Prior to beginning negotiations, a buyer should be pre-qualified.
This is usually a task for the Realtor®. However, if selling privately, before accepting their offer, a seller should insist the buyer seek a pre-approved mortgage loan certificate from a lender. A Realtor® should be able to discern between realistic qualified buyers and lookers. But if going the private route, this becomes the responsibility of the homeowner.
It’s very important that a homeowner keep their eyes open and be well-informed about the real estate contract before signing one. Agreements of Purchase and Sale, and the myriad supporting standard forms, are legally binding documents. To a novice in particular, they can seem complex and confusing and should be treated seriously. Misinterpretations could cost big time.
A prudent seller should clearly understand their responsibilities, including disclosure of latent defects. If unsure, and selling privately, I recommend seeking the advice of a lawyer before signing anything.
The three most common marketing tools employed by Realtors® are open houses, lawn signs and classified ads, in print and on brokerage and assorted websites. Traditional Realtor® websites and print ads have limited usefulness, but can be included in a wide variety of marketing methods.
The most important tool is the MLS System® in Canada or America. These hugely popular sites actually generate the vast majority of realty sales. Signs can definitely be helpful, especially if a neighbour knows someone who may be interested in moving to the neighbourhood.
Though I've personally enjoyed much success with open houses, they can often prove ineffective, at least as far as generating a buyer for the property on open. The exception is if the home is sharp, well-priced, located in a popular neighbourhood and listed during a hot market. Having said this, Realtors® often use open houses to attract general prospects to add to their stable of buyers. Thus, open houses are advantageous to all sellers in general. If the listing agent holds an open, but fails to generate a buyer prospect for that particular home, this doesn’t mean that s/he couldn’t find one from an open on another of their listings. So, I advise that you don’t stop your agent from employing this common marketing method.
The right way to find and hire a real estate agent is to have a trusted friend or family member recommend a Realtor® with whom they enjoyed a good experience. But not everyone is so fortunate to have that benefit.
If no personal recommendation is forthcoming, a prudent homeowner will interview more than one agent, and make a choice dependent on who is the most professionally impressive. Traits such as integrity, experience and market knowledge are obviously important, including what they promise to do for you.
However, many sellers these days base their choice of agent upon the amount of their fee and/or how much of their future commission they'll use to pay for home staging or whatever. This is definitely the wrong way to choose an agent. Above all else, a wise seller will make their choice based upon trustworthiness. Can the agent be trusted to professionally serve the seller's interests, and ahead of their own?
If unsure, a smart seller will insist on the shortest listing term possible, and get any agent promises in writing. Down the road, if satisfied with the service and integrity, the contract can always be extended or renewed.
I'd be remiss in my responsibility if I failed to add this increasingly common home selling mistake to the list. Consumers often fail to appreciate the time, effort and expense (not to mention expertise required) that many (but not all) agents invest, all on the speculation that the property will sell and they'll be paid. Accepting an agency, which involves fiduciary (legal) responsibility, is a substantial risk for the agent to assume. Thus, they should be compensated accordingly, even if the actual marketing period seems brief.
Also, to entice buyer agents to show their property, sellers should also seriously consider offering a competitive commission to the buyer agents. This can be just as important as setting the right asking price.
If a homeowner chooses to make a private sale attempt, whether through a private sale company or independently, particularly in a balanced or buyer's market, they'll soon appreciate what real estate agents have to deal with while plying their trade. Food for thought. Click here for more on real estate commissions.
Whether buying or selling - with or without professional help - check out my book The Happy Agent. It contains the sum total of the real estate knowledge, philosophies and techniques that I've accumulated, practiced and polished during a highly successful 40-year realty career.
Learn how to effectively
evaluate your home and prepare it for market to maximize the ultimate
sale price. There are also lots of ideas on how to
market and advertise effectively, how to handle showings and open houses
like a pro, how to
successfully negotiate an offer and more. You'll also learn how to recognize the signs of when it's
time to throw in the
towel and hire a professional, and what to expect from them.
When you consider that you're dealing with arguably your largest financial asset, and if selling, the huge
possible savings in
real estate commission with a private sale attempt, a small
investment of your time and a pittance of your
money could save you thousands of dollars and a ton of heartache. At the very least, you'll be
encouraged to try it alone, at least for awhile. Remember - knowledge is power.
Available virtually everywhere print and e-books are sold.
Do you have an interesting, expensive or even humourous story about a home selling mistake you made? To help others avoid making the same mistake, or to allow others to laugh along with you, I invite you to share it.