You may have made the best memories, and your home could have had the most profound effect on your lives, but for reasons like upsizing, downsizing, new job in a new city, finances, or just the natural need for change, it might be time to move on.
Having weighed all your options, you are sure that selling your home is the best thing to do, and you want to make the right decision with the sale, specifically the numbers. But how do you do that, especially when you are not a real estate agent? Do you know what not to do when selling and trading off your house keys with that sweet pile of money? How do you get the best deal from that big sale?
Understandably, your home could be the most expensive things you ever sell, and you wouldn’t want to mess up that sale – the regrets that come with some mistakes are just too costly, not only leaving your stomach-churning but also dropping a huge bomb on your financial goals.
So, it’s imperative that you protect yourself from some of these common home selling mistakes. Many have made these mistakes in the past; you don’t want to be part of the statistics.
10 Common Mistakes That Home Sellers Make
1. Not considering your broader financial situation.
One of the usual home selling mistakes is not considering your current finances. Does the price feel right? Can you hold off the sale for a few more months? And most important, have you taken into account the common costs associated with selling your home? And why do want to sell the house?
In terms of finances – we’re talking about your current financial burden and the cost of selling the house.
Should you be selling a mortgaged home or an upside-down home?
If the mortgage on your home isn’t fully paid for yet, selling the house would only make sense if you use the proceeds from that sale to pay off the balances on your loan.
However, things take a whole new direction if your property’s value has gone down over the years. In such cases, you’d find that you owe the bank more than what the home is worth – a scenario known as your home being upside down, you having negative equity on the property, or being underwater. In such cases, there is no guarantee that selling the house will make you enough to pay the mortgage balance.
Selling might not be the ideal solution, and one of the things to do before putting a house on the market is to find an option that allows you to break even on the sale. Generally, you shouldn’t think of selling when you’re underwater unless your decision to sell is fuelled by the need to avoid foreclosure or bankruptcy.
What costs affect the cost of selling a home and its profitability?
To the common man, selling your house and finding a buyer is one of those straightforward things – simple cash and key exchange. But this isn’t the case, and there are several home selling costs that will catch you by a great surprise.
These costs aren’t often listed on the blogs you will read on ‘how to sell your home, which is why you need to research vastly to identify all the costs associated with selling a home. Below is a breakdown of the common costs you should be aware of:
Agent’s Commissions – Selling your home might seem like one of those things you could do without any help, but you’d be gravely mistaken if you choose to do it alone. The right sales agent will not just help you get more money for the house but also sell the house faster and ensure a streamlined selling process. Just know that you’d have to part with about 6% in agency fees. This might seem like a lot, but it’s worth it in the end.
Staging cost – This is the other cost that’s often overlooked. The staging cost isn’t fixed, and it will vary depending on the size of your home, location, number of rooms to be staged, the staging décor – yours or rented, and the staging consultation fee. Though it appears like another small cost, it piles up fast.
Closing costs – Did you know that the closing costs for your home could be anything between 1 and 3% of the value of the home? These costs include the title transfer fees, the sales tax, attorney fee, and the closing fee for the party organizing the final cost on the closing day, for example, a lawyer or the company you work with.
Home Inspection and Home Repairs Costs – Before your house is up for listing, you might want to pay a licensed home inspector to look at your home. The home inspector lets you in on some of the issues with the house. From the inspector’s report, you may want to repair the problem, and if you don’t, then the buyers coming in will be looking to score huge discounts.
Seller Concessions – Despite knowing what the market prices are, buyers will ask for discounts, depending on the current housing or real estate market. You may have to offer concessions like throwing in a dryer/ washer if they pay the full price or, in other cases, paying off the closing costs.
Other costs – Moving costs, the affordability of your next home – whether it’s to be paid for in cash or by a mortgage.
Obviously, the ‘hidden’ home selling costs are too high and shouldn’t be underestimated. Consider these costs, the expected money from the sale, and the viability of the decision to sell your home, especially when you want to sell house fast.
2.Not Hiring A Professional Home Sellers
As mentioned above, you may have to spend as much as 6% (more or less), depending on the agent whose services you enlist. Now, unless you are a real estate agent, you don’t really need help selling the home, but if you have no experience in real estate and the housing market, failure to use a licensed real estate agent might be the biggest mistake you make – this is also the case when you opt for the ‘For Sale by Owner’ option.
While this might save you some cash because you are not paying the agency fees/ commissions, you may end up losing a lot more than what you’d spend hiring a real estate agent. For starters, you may be undervaluing your home significantly, losing out on so much more.
In addition to hiring a real estate agent to ensure that you don’t miss out on any details and to get the prices right, you also need an agent to handle the showings. ‘No one knows your home more than you do’ is a sentiment you have to shove aside because you’ll just make everyone feel awkward, and you may not be able to answer all the questions correctly. So, don’t stick around during showings.
Keep in mind that in as much as you have the right to hire the best real estate agent, it’s also within your rights to fire a bad real estate agent. There are companies like Mr. Home Buyer who ensure that you have the professional help you need for the most profitable and the fastest sale.
3. Setting the wrong price for your home
This is the other big mistake made by home sellers, and ‘studying’ the market for weeks or months isn’t reason enough for you to be an expert at property prices. You may price your home too low, missing out on thousands in profits, or too high, turning away most of your serious buyers, wasting months or weeks, then being forced to sell the house at a lower price.
So, stop trusting everything posted on the internet. Instead, engage the services of a reputable real estate agent or agency for help on everything involved in selling the property. They will run a comprehensive comparative market price analysis for properties in your area, giving you an accurate price for your property.
4. Selling an empty house
Staging is what determines if your house sells in the first few days of the listing or if it stays on the market longer. So, along with being aware of the staging costs, you shouldn’t skimp on how much is spent on staging. Staged right, your house will fly off the market faster, and you may get more attractive offers. In other words, you shouldn’t show an empty house.
5. Over-improving your home
The flipside to the staging matter above would be you mistakenly over-improving your home. Don’t go overboard with the staging. While staging is one of the things to do before putting the house on the market, just keep things fairly normal.
6. Neglecting Necessary Repairs Prior To Sale
Want to get to most out of your home, be honest. You could be in a tight spot, but that’s not a reason for you to hide or ‘forget’ to mention that seasonal bug problem. Buyers would notice the leaking roof too, and even if they don’t notice it initially, smart buyers have a home inspection done in the properties they are interested in, and the results would end up delaying the closing date or even tear apart the deal completely. So, pay for the home inspection in advance, fix what needs to be fixed, and disclose potential issues the new buyers may have to fix.
7. Using Poor Quality Photos or Showing a messy, dirty, cluttered house
Clutter not only sends off your best potential buyers, but it also hides the beauty of your home. If you are selling your home, get rid of those piles of paper, put away the misplaced toys, and get rid of the old, torn furniture. You may want to keep your pets away from your home too. In other words, make your home the cleanest space ever on the open day, and clean all corners, even if you’ve never had time to. Make it a fancy, marketable canvas that anyone would want to live in.
On the same note, get the listing photos taken by a professional and after the house is cleaned and staged. You also need to get the lighting right. In as much as the new owners would fix the lighting after they’ve moved in, but if you want to sell that house, you have to get the lighting right. Brighter rooms sell faster and easier because they appear bigger, which is why you should shine lights in all the nooks and crannies in your home. Think 100watt bulbs throughout the space. You could also throw in some candles for a cozy, warm feel.
8. Failing To Complete A Full Set Of Disclosures Prior To Closing
You can lose a lot of money if you hide or ignore to mention some of the imperfections in your home. Be honest and forthcoming about the issues and potential issues with your home. These issues will spring up later and cost you good deals.
9. Being adversarial during negotiations or Being too personal about low offers
It may not seem like it, but the first offer you get from a buyer is not always a reflection of what the buyer thinks about your home or even how your house has been taken care of. Think of this sale as a business transaction, and there is always room for negotiation. So, make a counteroffer to their low offer – interested buyers always go up on their offers to match or get closer to yours.
10. Not immediately responding to buyer negotiations
It might seem wise to give things time and wait for better offers from buyers, but doing this is a mistake because you may miss out on a great deal as you wait for something better. Always take time to respond to all those buyer negotiations when they come in.
These are just the mistakes to avoid when selling your home. Get ahead of these issues, and you’d be guaranteed a better deal from the sale.