It takes a lot to sell a house, which is why it is important to avoid as many mistakes as possible. There are plenty of things that you can be doing to ensure the process goes well, such as making sure you do the right home repairs in order to get the highest return for your investment. You will also have to interview and select the best agent to sell your house, maintain an immaculate house for showings (which may include weekends and holidays), negotiate wisely with your buyers, open your house to home inspectors and appraisers, deal with unexpected repair issues and being prepared for the possibility of closing delays.
All of this can be downright nerve-racking! Unfortunately, there is also a lot of room for mistakes when selling your home. It is important that you take care when selling a house, as there is a lot of time and money involved.
To help you, here are 5 mistakes that you should avoid when selling your home. These tips will keep you from complicating the sale of your house, increasing the days on market and negatively affecting your home’s final sales price.
Mistake #1: Picking an agent just because they give you the highest listing price
Picking an agent who gives you the highest listing price could be the costliest mistake you can make when selling your home.
Unfortunately, some real estate agents will “buy your listing”. To get you to sign a listing, they’ll price your house higher than any other agent, even if they know your house will not sell at the listed price.
They figure they have nothing to lose. They’ll tie up your house with an exclusive 6 or 7 month listing agreement, hoping you will eventually lower the price, thereby securing their commission.
They’ll tell you, “There is no harm in testing the waters and you can always reduce the price at a later date”.
Any experienced agent knows that is simply not true. If you want to avoid this mistake and sell your house at the best price in the shortest amount of time you must price your home correctly right from the start. The first weeks your home is on the market are crucial. If your home is overpriced, buyers will simply skip your house.
Even worse, smart selling-agents will use your house to bounce educated home buyers to correctly priced property. By comparison, your overpriced property can make a well-priced property seem like a steal. This is a sure way agents get buyers to commit to a property (not yours) and earn a commission.
Whichever way you look at it, an overpriced house will sit on the market for a long time and may get the dreaded “kiss of death”. This may be the first time you have heard of this. But trust us, it is very real.
As a home sits on the market for a long time, it gets stigmatized. Buyers and agents assume that the reason your home is not selling is that there is something inherently wrong with your house.
Once your home gets the “kiss of death” it’s almost impossible to sell your house unless you drastically reduce the price to overcome the buyers’ and agents’ negative impression.
You may eventually sell your house, but most likely at a much lower price than if you would have priced the home correctly right from the start.
Mistake #2: Forgetting to factor in cost for repairs to your bottom line
Unless your house is perfect, don’t forget to factor in the costs of repairs. This is often one of the biggest mistakes that people make when selling their home. You should factor in these costs and reduce them from the amount you expect to profit even if you plan on selling your house as-is.
When you’re selling a house the traditional way with an agent, you’ll attract traditional buyers. Traditional buyers are made up of families that buy homes they intend to live in. Virtually all traditional buyers have another thing in common. They buy a home with mortgage financing.
That means your home will have to pass an appraisal inspection so that the buyer can get a mortgage approval. Here is where things can get complicated for you as a seller, especially if you plan on selling your home as-is and save money on the cost of repairs.
If an appraiser discovers a major repair, safety or health issue, you will have to make the required repairs whether you like it or not. If you refuse to make the repairs, your buyer will be unable to get a mortgage approval and you’ll have to start the sale process all over again.
Mistake #3: Assuming you’ll find a buyer right away
Buyers sometimes make offers only to find out later they cannot get financing. Other buyers can have a change of heart and back out of a deal.
A big mistake buyers make when selling their home, is assuming they will find a buyer right away and rush into purchasing another home. You should commit to buying a new home only after finding a buyer and making sure they will be approved for a mortgage.
Mistake #4: Assuming you will close fast
When selling your home, make sure you avoid the mistake of assuming that your home will close fast.
You’ll avoid unneeded stress by giving yourself extra time for your future plans.
Remember that just because you have found a buyer, it doesn’t mean that there won’t be closing delays.
If you want to find out what are the most common closing delays so you’re not caught by surprise read, 9 Closing Delays That Prevent a Fast House Sale.
Mistake #5: Underestimating your closing costs
Underestimating your closing cost when selling a house could permanently derail your plans. This can be especially troublesome if you’re relying on the money from the sale of your home to buy a new house, pay for moving expenses, or pay off existing debts.
One sound piece of advice is to calculate and deduct all your seller’s closing costs from the sales price to get the exact amount you will receive the day of closing. You can also find ways to reduce these, for example, by partnering with a full service real estate agent who offers 1% listing fee.
Make sure you enlist the help of a reputable real estate agent who has the skills and experience to help you avoid costly mistakes when selling your home.