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7 Mistakes to Avoid When Selling a House
Lucky is the homeowner who has experience with selling a home. First-time sellers have a steep learning curve ahead of them and many obstacles on the road to a successful sale. Although common with first-time sellers, some of these obstacles aren't obvious.
1. Not Preparing the Home for Sale
"Dress your house for success," is probably the best advice for home sellers. Just as you wouldn't attempt to get top dollar for a car without cleaning the interior and detailing the exterior, so it goes with the sale of your home.
Cleaning the house is the first step because, face it, nobody will buy a dirty house. But, here's incentive for you to put on the rubber gloves and drag out the cleaning supplies: Clean houses sell quicker and for more money.
According to a recent survey, commissioned by one of the big real estate companies, a $402 investment in cleaning and decluttering a home realizes a 403 percent return on investment. That is a whopping $2,024 in your pocket at the closing table.
As impatient as you are to move on to the next phase of your life, it is vitally important to get the cleaning, painting, repairs and staging done before the house goes on the market.
2. Not Pricing the Home Realistically
The first few weeks that your house is in the local Multiple Listing Service database are known as the "honeymoon period." This is the time when it will get the most traffic. All the traffic in the world, however, won't compensate for a too-high price.
Buyers aren't ignorant and neither are their real estate agents. They are well aware of current market values in the areas they are searching and will know that your home is overpriced. In the meantime, you've wasted the honeymoon period. By the time you lower the price, agents and buyers will think there is something wrong with the house.
3. Not Hiring a Real Estate Agent
Yes, you will pay a real estate fee when the home sells. The flip side to hiring an agent is going it alone. If this is your first time selling a home, that would be a huge mistake.
First, unless you are a lawyer, how will you know how to protect your interests during the process? How will you understand the contracts and which ones to use when? Then, consider the negotiating process. Without an agent to advise you or to negotiate for you, you may make costly mistakes.
Finally, a 2008 Stanford University study showed that "the use of a broker increases the probability of a sale during the first month on the market by nearly 25 percent." In other words, homes sold by owners remain on the market significantly longer than those sold by real estate agents.
4. Trying to Hide Problems
Full disclosure of everything you know about the property is not only the law, but it protects you as well.
Home sellers are legally required to disclose anything that affects the home's desirability or value. This doesn't mean just the big stuff, but neighborhood nuisances such as the weekly parties the college kids next door hold or the yappy dog that keeps you up at night.
A buyer can sue you in a court of law when the defect is discovered if you didn't disclose it, in writing.
Remember, you are only required to disclose issues that you know about. There is no need to hire an inspector to learn if the house has defects you don't know about. That is the buyer's responsibility.
5. Letting the Ducks Run Wild
Many first-time sellers are also purchasing another home. Trying to juggle two real estate transactions is challenging, and it's easy to let some of the details fall through the cracks. When that happens, though, you risk derailing either - or even both - of the transactions.
Line up all the stray ducks early in the process. Get your financing for the new home under way, and respond to the lender's requests in a timely fashion. Check your current mortgage for prepayment penalties. In the case of a short sale, determine if there is a second lender. This is important information for your real estate agent.
6. Being Inflexible
Buyers look at houses when it is convenient for them, not for you. Many look at homes after work or on weekends - busy times for most families. It's important to try to accommodate showings, even if it's inconvenient for you.
You never know, these may be the buyers who fall in love with the home. It's important to understand, and let your family understand, that, although the situation is uncomfortable, it's only temporary.
7. Not Checking With Your Homeowner's Insurance Agent
There will hopefully be a lot of people coming through your house and wandering around the property. Find out if your insurance covers slips and falls or anything else that might happen to a buyer while touring your property.
Take the time to walk around the property to find any hazards that exist. Cover the pool during showings and remove pets.
With the right real estate agent you'll avoid most of these mistakes, experience a smooth transaction, and soon be on the road to your new life.
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