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Appraisals / Closing

Selling a Home Pitfalls

Selling a Home Pitfalls That Cost You!

1. Priced Too High.

There is a sweet spot for your home on the market.  Too low and you leave money on the table.  Too high and buyers will not tour the house and if they do, it will be on their way to the neighbor’s house which is also on the market and you will help sell that home.  If you are the highest priced home in the subdivision, the condition and amenities of the house should match.  If buyers feel you are even 5% over market ($10,000 for a $200,000 house) you will know from the lack of ‘showing requests’ you receive.  Alternatively, they may tour your house, but not write an offer. Sellers like to think the buyer will just write an offer anyway, but buyers will not.  A common selling a home pitfall is setting the price too high. Pricing high is a psychological signal to buyers that you are looking to haggle. They might be willing to negotiate around 2%-3%, but for most buyers, finding a home is stressful enough that they are not looking to create friction with the sellers right from the start. Those buyers who like to haggle are also the ones to low ball offers, renegotiate after inspections, and fight for every concession. For many sellers, it is not worth the few thousand dollars that ‘may’ have earned pricing above market.  As a side note, can you price a home too low in this market?  If the average home in your neighborhood is $250,000 and you price it at $245,000, every Realtor who knows that market is going to call their buyers, and any buyer looking in that neighborhood or area is going to jump on it and want to see it. Moreover, in this market you would likely to have multiple offers, and buyers willing to pay {way} over listing price for a home they think is a good value.

2. Did Not Stage the Home.

It can be expensive to stage a home, but it does not need to be. Sometimes stagers can use the furniture you already have.  In fact, removing some of your furniture might be the best thing you can do.  Most research, informal and formal, has indicated that staging a home increases the price a buyer is willing to offer.  Most studies estimate that increase in the offer amount is somewhere between 3% and up to 10%.  So, if you are selling a $200,000 house and the staging costs $2,500 (1.25%) the chances are extremely high that you will earn more than the costs of staging in the buyer’s offer. Psychologically, buyers are better able to see themselves living in a home that is generically beautiful and inviting.

3. Did Not Clear Out Enough Clutter and/or Clean Enough.

This is a big selling a home pitfall. It is hard to show off your home if buyers cannot see past your personal items.  We have worked with many buyers that will not write an offer on a home because the seller (or tenant) has too much stuff move in time and they think it would be impossible to get it clean afterwards.  Whether this is true or not, this is the buyer’s perception.  Choose the message you are sending to the buyers touring your house deliberately and not by accident.  To create an inviting clean space for buyers to picture themselves in, clear 2/3 of the floor space for walking, leave space on every shelf, clear every surface, clear out closets enough to see every shelf and the floor.  We have even had sellers tell their kids to pretend they are on vacation and live out of one dresser.

4. Ignored the Ambiance of the House.

Dark and smoky might be great for a cocktail bar, but unless you are looking for Brian Flanagan to buy your house, that is not what will appeal to most buyers.  Have some friends give you honest feedback.  Your home should be as open, bright, and inviting as possible.  Replace all the lightbulbs with brighter (100-watt) bulbs.  Clean every window, lamp shade, curtain, and leave the curtains open for the natural light.

5. Did Not Get Quality Photos.

Most buyers are touring your home the first time from their couch. Photos can keep a buyer from scheduling a showing IRL (in real life). Just like for beauty pageant contestants, photos should be taken from the most flattering angle and in the best light.   Professional photographers know how to get the best shots for your marketing.  You will be amazed at the quality compared to the ones you took with your phone.

6. Took Negotiations Personal.

Most experienced Real Estate agents have been there.  The seller wants to sell, and the buyer wants to buy, but they can not agree over a $750 grill on the patio and the $350,000 deal falls through.  It is easy to get caught up in the negotiations game and to get your feelings hurt. Remember, if they did not like your home, they would not have made an offer. Your Real Estate agent is there to remind you of your goals and help you reach them and not let the buyer’s annoying personality get in your way.  They should be part of the solution and will help keep the sale on track.

7. Did Not Invest in the Right Marketing.

Every Real Estate agent should have a solid marketing plan to reach the likely buyers of your home.  Depending on the audience your home would likely appeal too, agents can be highly creative.  We ultimately sold a log cabin with targeted marketing to New Yorkers during a snowstorm.

8. Made Showings Difficult.

Buyers do not have a lot of options right now, so they are seeing fewer homes before they write an offer.  If they plan to spend Saturday evaluating their options, but you cannot make that work because of a scheduled birthday party, that buyer will move on and look elsewhere.  In this market, if a home is still on the market in 30 days, buyers start to wonder what is wrong with it and will expect a price drop.  We have also worked with buyers who would not tour a home because there was a dog in a kennel in the house.  Some people are deathly afraid of dogs and seeing one in a house they are trying to picture themselves in is often a deal breaker.

9. Did Not Disclose.

As soon as a buyer discovers something about a home that was not disclosed, and they think it should be, the buyer loses faith and trust in the seller.  Some things are not required to be disclosed, like whether the home was the scene of a crime but put yourself in the shoes of the buyer. This is another reason for a pre-listing inspection, it gives you an objective view of your home that you can share with qualified buyers.

10. Did Not Read, or Understand, the Contract.

If there is any clause on the contract that is not clear, or obligation that does not make sense, contact an attorney.  What the attorney charges per hour is minimal compared to what a misunderstanding can cost you. This is especially true for addendum and attachments to the contract.

Storytime:  We know one seller on the market without an Real Estate agent that accepted an offer on a home he was flipping.  By the end of negotiations, the buyer and seller agreed to installing a new air conditioning unit, trimming of the oak over the house, and installing/repairing the radon mitigation system.  The seller completed the work and closed the permits and was ready for closing day. However, he and the buyer could not agree on the tree limbs over the house.  The insurance company wanted them at least seven feet from the roof, and the seller could not reach that high with his chainsaw and he would not hire a professional tree trimmer.  The buyer terminated the contract and received their binder back because the contract was incomplete.  There are checkboxes on the contract to indicate that riders, disclosures, or addendum (clarifications to the contract) are part of the complete contract.  If that rider, disclosure, or addendum are not signed by all parties, the contract is not complete, and the buyer can walk away and get their deposit back. Seller went back to market and sold six months and two more repairs later. Couple lessons here – 1. Do not try to sell it on your own unless you are prepared for dirty tricks like this, which are completely legal and experienced agents know to how to stop.  2. Buyers get to decide whether to accept the repairs and saving money with shoddy work can lead to the seller losing more than the cost of a quality repair.

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Appraisals / Closing