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6 common mistakes people make when selling a home, which can cost them thousands
6 common mistakes people make when selling a home, which can cost them thousands
Steven JohnFeb 1, 2019, 08:19 IST
Joe Raedle/Getty Images
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Selling a home is the largest transaction most people will ever take part in, and it's usually the most complex one as well.
By failing to properly plan for the home-selling process, including the careful selection of the professionals who will assist, home sellers risk losing thousands.
These are some of the mistakes many homeowners can make during the long, complicated process of selling a residence.
Selling a home is a big deal. With the median home value in America standing at $223,900 as of December 2018, according to Zillow, even homes on the lower end of the price scale represent major assets.
And if you make mistakes during the home sale process, you stand to leave major money on the table - or, more accurately, to hand it over to the new buyer and the agents involved in the sale.
In order to sell your property, you need to be objective about everything. Yes, this is your home and you love the place, but once it's time to sell, it's a financial asset - you'll always have the memories; now it's time to think of the money.
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Before you list, there is a lot of work to do, from making sure everything in the home is up to code, there are no liens in place, that you have plans in place for the move and for housing after the sale, and that you know with whom you'll be working during the process.
There are a lot of ways to mess up during the home sales process. Here are six common ones that I've encountered or observed, which, hopefully, won't be an issue for you.
Your real estate agent stands to help you make the largest possible profit on your home sale if all goes well, but they can also cost you thousands if things don't. This is your home and your capital, so put yourself and your family first. Don't feel obliged to work with a friend or family member, and thoroughly vet anyone you find.
You can also consider skipping the traditional agent path altogether — you can use a home seller's education platform like Sold.com to determine the best route for your home sale and to find the best tools and or people to help you in the process. (And keep in mind that even the most gregarious of realtors is also looking to make the best possible commission — make sure to negotiate a fair deal no matter who you work with, friend, family, or perfect stranger.)
They don't properly fix up the home
You know how a stitch in time saves nine, right? Well so too do a new water heater, a re-tiled bathroom, and a replaced window end up saving thousands of dollars. Savvy buyers (and, more importantly, home inspectors) can see through a fresh coat of paint to the real problems lying beneath.
If you spend the money to properly fix problems, replace worn out hardware, and upgrade dated fixtures and features, you can command a much higher price for your home. In most cases, the investment that improves your home from fixer-upper to move-in ready will more than pay for itself. (If your home is in a red-hot market, then you can consider minimizing the time and money you put in fixing it before listing, FYI.)
They improperly stage the place
Some sellers refuse to change their homes during the sales process, leaving too many personal effects around — too many photos on the walls, trinkets on the shelves, toys on the floor — to allow a prospective buyer to reimagine the space as it would be once theirs.
On the other hand, going too minimalist with the staging can have the effect of making a home austere and unwelcoming. Have an unbiased party, whether your real estate agent, a staging professional, or a friend with a knack for decor and for candor, help you stage the place.
They set an unrealistic timeline
Your house may very well sell the same day you put it on the market, or it may still be for sale six months after you first listed it. Unless you live in a zip code with highly desirable real estate, it's almost impossible to say just how fast the place will sell, so don't count on it moving quickly.
If you need to close on your home before securing a loan for another, don't consider any new home you find a guarantee, and budget for the expenses of your existing residence for many months to come. On the other hand, know your place might sell fast, and have plans for housing, house hunting, and the moving process in place before you list.
They don't know the real value of their home
Without going into specific numbers, when my wife and I put our home in Glendale, California, on the market a few years back, our realtor recommended a figure that just seemed too low to me. We decided to list it 12% higher, a hefty chunk when dealing in home price figures.
As it turned out, the home went for much more even than that, selling for 18% more than her original figure. Had we simply trusted our agent, experienced and knowledgeable as she was, we would have left tens of thousands of dollars on the table. We got that one right, but many other people don't.
Use recent sales in your area as comparisons, consider a second or third opinion from other agents, and consider how much you have invested into renovations and maintenance over the years — you may know your home's value better than a professional realtor thanks to your firsthand experience living there. (Also, note that listing too high can lead to repeated drops in the price, signaling to buyers that you're desperate to sell and giving them leverage in the process.)
They try to got it alone
Many home sales that start out as a FSBO (For Sale By Owner) end up with a professional agent handling the process, meaning all the time, effort, and capital dedicated to the FSBO attempt were a waste.
Many DIY sellers ultimately end up working with a real estate agent simply because they didn't appreciate the scope of the work involved. Sell your home by yourself means being available at all times for showings, it means successful marketing of your home, proper staging, and of course a lot of hefty legal and financial paperwork.
Yes, a FSBO sale can save you a lot of money, but not if you're losing wages by missing work or spending unwisely on marketing, staging, or other expenses that would be kept tightly in check by a professional.
