Merry Silbaugh, ABR
Associate Broker   Cell 602-617-3245
9 Common Mistakes That Cost Home Sellers Thousands of Dollars

Don’t Put Your Home On The Market Until You’ve Read This…

 

 

9 Common Mistakes That Cost Home Sellers Thousands of Dollars!

 

            Selling your home can be a nerve racking, exhausting experience.  Last minute calls, inconvenient showings, price adjustments, and the uncertainties of being stuck with a house that doesn’t sell for months on end can all take their toll.  If you are not completely prepared, you could end up losing thousands of dollars in profit!

 

            The difference between a profitable, smooth transaction and a miserable experience is often a fine line.  The majority of home selling nightmares are caused by a lack of knowledge.  This report is designed to make you aware of 9 common mistakes that cost sellers serious money.

 

1.                  IMPROPER PRICINGSet the price too high and the home will sit unsold and be stigmatized as a problem property.  Price it too low and you may lose thousands in profit.  Either way you lose. Price involves the evaluation of numerous factors…and it’s critical! In fact, 80% of the marketing of your home is done if it’s listing at the right price!

 

Most over-pricing results from one or more of the following:

 

·        Falling into the “gotta get syndrome”.  The market determines the price for which your home will sell. It has nothing to do with what you need to get!

·        “Testing the market” with a higher-than-market price.  Thinking that you can always lower it will hurt you. Days on market is used all the time by buyers to determine the desirability of a home. Even if a buyer loves your home, they will use the days on market to their advantage, paying you less for your home than they otherwise would have.

·        Allowing an agent to “buy your listing” with an inflated, unrealistic list price.  Like all professions, the real estate industry has some bad apples . . . agents that will do anything to get your listing. They will attempt to entice you to choose them by telling you that your home is worth more than other agents are indicating. Don’t fall for it!!

·        Adding the cost of improvements on top of the fair market value.

It is unrealistic to expect to re-capture the cost of projects that either maintained or improved the property. These projects will make your home more desirable allowing it to sell quicker, but many may not add actual dollars at all.

·        Failing to use a “Total Market Overview” in addition to the standard “Comparative Market Analysis” when determining price. The Overview results in a more accurate projection because it eliminates the subjective comparisons that the traditional market analysis causes one to make, thereby incorrectly skewing the price.

 

Under-pricing occurs most often as follows:

 

·        A seller who is not abreast of current market conditions tries to “save” money by selling the home him/herself and inadvertently prices it lower than the market would bear.

 

·        Occasionally, one of those bad apples we talked about earlier, sensing that a seller is not aware of the current market, will deliberately under-price a home, hoping for an easy, fast sale.  

 

2.                  SELLING WITH INADEQUATE OR INEFFECTIVE MARKETING-This error results

in longer selling times, lower sale prices and less advantageous selling terms.  The seller or seller’s agent must employ the systems that utilize the laws of supply and demand to the seller’s advantage to assure the best outcome.  For example:

 

·        The seller doesn’t want to pay a sales commission, so decides to be an unrepresented seller and market the home on his/her own. Here’s the analogy: Let’s say you want to sell a rare, antique table and you want to be confident that you obtain top dollar. Would you be content to place an ad in the local newspaper, try to sell it at a garage sale or place it on a website with limited visibility? Although you might sell the table using the above techniques, I don’t think that you would believe, even for a second, that you had obtained anything close to the highest price. I think that you would make a concerted effort to utilize the systems that exist in the antique furniture business to obtain the greatest exposure to potential buyers; the systems that create the antique furniture “market”. And you would do so even though the use of those systems will cost more than the previous options. I think you know instinctively that you will obtain a higher net profit if you use the antique furniture “market” in your sale. It’s the same in real estate! In real estate, the Multiple Listing Service (MLS) is the system that creates  the real estate “market”.

 

The MLS is the source of “homes for sale” for hundreds of thousands of REALTORS who make their living selling real estate. It is also the only source of listing data for REALTOR.com, the #1 real estate website, the site that is easily located & accessed by buyers all over the world. In fact, 82% of the time that users spend looking for real estate properties online is spent on REALTOR.com. The MLS is the only real estate marketing system that fully engages the laws of supply and demand by exposing your property to the most potential buyers which will result in the highest possible price & best terms for your home!

 

·        The seller wants to pay a lower sales commission, so becomes under-represented by using a limited service real estate broker.

Real estate business models that feature severely discounted sales commissions also feature severely limited marketing and/or representation. Severely limited marketing will not get you top dollar for your home. Trying to sell your home without MLS and REALTOR.com exposure is like trying to sell that antique table at a garage sale! Selling without maximum representation is also penny wise and pound foolish. Brokers who so easily devalue their own worth can hardly be expected to care about maximizing the worth of your home.

 

3.                  NOT PROVIDING EASY ACCESSAccessibility is a major key to a profitable sale.  A lock-box is very important. The more accessible your home, the more showings, and the better the odds are of finding a person willing to pay top dollar. Any restrictions you place on showings will increase your sale time & reduce your sale price. In today’s competitive market, buyers who can’t get into a home when they want to, will skip it, go on to other homes, and purchase elsewhere.

 

4.                  BAD HOUSEKEEPING – The prospective homebuyer’s first impression is critical.  An unbelievable number of home sales have been lost to unkempt yards, cluttered rooms, dirty kitchens & bathrooms, unpleasant odors, stained flooring, etc.  Remember the way you live in your home is not the way you sell your home.

 

5.                  FAILURE TO MAKE REPAIRS –In addition to making the home less appealing to buyers in general, buyers will greatly exaggerate the expected cost of repairs and mentally discount the price of the home to offset their inflated estimates. Completing even minor improvements ahead of time will often result in a higher sale price reflecting as much as three to five times the actual repair cost. Buyers can only see what they are looking at and buyers will only pay for what they see.  Completing repairs ahead of time can often make the difference between a closed sale at top dollar and a lengthy sales process where the home languishes on the market for months and ends up selling at less than its real value.

 

6.                  POOR SHOWING TECHNIQUES – Your home should be neat, clean & well-maintained, but that’s just the beginning. The proper “staging” and “detailing” of your home will make a big difference in the length of your marketing period and in the price you receive. Understanding buyer motivations and emotional responses allows you to maximize the appeal of your property. In addition, the things that you do or say when your home is shown are also of utmost importance.

 

7.                  MAKING SELLING DECISIONS BASED ON EMOTION- When you are buying a home, it is natural to rely on your emotions to a great extent, but as a seller, you must see the transaction as a dollars and cents business decision.  Don’t let emotional ties to your home affect your judgment and your decision making.  Remember, buyers are not buying your home. They are buying a house to make into their home.

 

8.                  FAILURE TO UNDERSTAND MARKET CONDITIONS- Supply and demand creates current market conditions for the housing industry just like it does for the stock market.  Most buyers compare dozens of homes and arrive at a perception of current market value.  It is very difficult to sell at a price higher than that perception would dictate.  No owner, firm, or agent has any control over the market! So weighing the pros and cons of, and being realistic about, current market conditions can create a much better outcome for you.

 

9.                  HIRING THE WRONG REALTOR– The vast majority of all sold homes were listed by REALTORS and sold by other cooperating REALTORS. But all REALTORS are not equal – not even close. REALTORS are individuals who have real estate licenses and agree to abide by a Code of Ethics. Without the Code, one is just a real estate “agent.” Unfortunately for the consumer, obtaining a real estate license is pretty easy and it doesn’t mean that you will be a good agent. That’s why so many agents cycle in and out of the business. In fact, 80% of new licensees will not be in the business 12 months later. And another 10% will fail before their 3 year mark. And surprisingly, even REALTORS are not required to provide minimum standards of service. So having a license isn’t enough and being a REALTOR isn’t either. In fact, neither necessarily indicates any expertise whatsoever. Equally as dangerous is hiring a REALTOR because they have a great personality; because they work for a large, well-known company; because you know them personally as a friend, relative or neighbor; because he/she will charge you less and a host of other insufficient reasons. What matters when hiring a REALTOR is proof of verifiable results. Can he/she show you a long term record of selling homes at the best price & terms in your local community in both seller’s and buyer’s markets? The listing agent’s reputation, experience, knowledge, and marketing plan will have a huge impact on your success. Listing with the right REALTOR can make all the difference in the world. Don’t fall for offers that are too good to be true, “bait and switch” sales commissions, misleading guarantees and other real estate gimmicks. The old adages are true: “You get what you pay for!” and “If it seems too good to be true, it is too good to be true!” And remember, your home may sell even though you hired the “wrong” REALTOR. You’ll just never know how costly that decision was, because it isn’t possible to simultaneously sell your home again, but this time with the “right” REALTOR.

 

Don’t fall victim to these costly errors!

 

 


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RE/MAX Sun Properties
16704 Ave. of the Fountains 101 • Fountain Hills, AZ 85268
Associate Broker • Cell 602-617-3245