So, you have decided to take the big step and sell your home to capitalize on today’s surging real estate market. But while the potential for a huge profit is promising, the process of selling a property itself isn’t always as straightforward as it seems. There is a lot of room for mistakes, and if you are not careful, it can greatly impact your finances and peace of mind. It is important to know the common mistakes to avoid when selling your home to maximize your profits.
Learn from the mistakes of others and avoid these mistakes when selling your home.
This is probably the most common mistake most home sellers make, but it’s quite understandable. You’ve taken good care of your house and made plenty of renovations and repairs over the years. Obviously, you want to get as much money as possible. However, the price you want might be different from what the market thinks it’s really worth. This is where the term ‘fair market value’ comes into play.
Fair market value is the determined value of the property and how much it would sell in an open market between willing and informed sellers and buyers.
The idea when it comes to selling your property is to find the sweet spot between too much and too little. Put an unrealistically expensive price tag and you will risk having your property sit on the market for too long, which will definitely have unpleasant consequences. Price it too low and you will risk leaving a good amount of money on the table.
You may have an idea of how much your property is worth based on similar homes in your area. While that information can help, it’s far from accurate. What you need is a professional appraisal, and from there, make some tweaks to make it realistic and fair for both you and your potential buyer.
A wise buyer will always negotiate. Well, you would do the same, right?
The thing is, there’s a good chance you are not the only one selling a property in your area. If you want your listing to attract interest from potential buyers, then you have to play ball.
The idea is to put a price that will attract buyers and still leave room for negotiations. This is a good strategy to make buyers feel they are getting a good deal, while also leaving you with a good amount of money from the sale.
Whether you end up with less or more than your asking price depends not only on your pricing strategy, but also if you are in a buyer’s market or in a seller’s market. The former means there are more properties for sale than buyers, while the latter means there’s a shortage of properties or more potential buyers than houses. Also, staging and modernizing your property also helps.
As said earlier, there are lots of things that go behind the process of home selling. And this whole process comes with a price. Selling a home in today’s market usually costs around 5 to 6 percent of the property value in agent commissions. If you account for all other concessions, including repairs, permits, insurance, HOA dues, taxes, etc., the cost could shoot up to 10% of the property’s sell price.
Most lenders will require sellers to get homeowners insurance. If you don’t, then you have to make sure you have the property insured in case any unfortunate incident happens inside your premises. The last thing you want is to pay for damages for someone who got seriously injured while checking your property.
More importantly, you need to mitigate the chances of this problem by making sure there are no possible hazards on your property. Get your dog out of the house during shows. Keep the kids of your potential buyers away from the pool.
If you think you can get away with hiding damages and other major problems in your property, think again. Every potential problem inside and outside your property will be uncovered during the buyer’s inspection. They expect the description of the property to match the description in the listing. And if the buyer gets a long list of maintenance and repair issues, then expect them to either back out or haggle the price even lower.
Make sure you prioritize the most obvious issues, especially those that will be easily seen during inspections. Fix problems ahead of time. Check for items and areas that are in poor or broken condition or anything that can affect the integrity of the structure and/or functionality of the property.
Many sellers want to increase the value of their property by doing major renovations and improvements. Most of the time, however, these renovations are just unnecessary expenses. Renovations aren’t cheap, and there’s a good chance you will not recover the cost from selling your home.
Furthermore, many buyers prefer a clean slate to work on and do their own renovations. They want to personalize the space to fit their preferences and lifestyle.
Most buyers look for listings online today. While you may save a couple of hundred bucks by doing the photos yourself, you will be doing your property a disservice if you don’t have the skills and tools to create high-quality visuals. A simple search for “homes for sale” around your area will give you a good example of why this is a bad idea.
Good quality photographs from real estate photographers give your property the best chance to get the attention of potential buyers. They provide crisp and clear photos using awesome, wide-angle cameras.
It’s also a good idea to take photos of your home once it has been staged. The whole idea of staging is to help potential buyers see themselves in your home, from the living room to the bedroom, kitchen, bathroom, etc. Beautiful furniture and fixtures, paintings, even a couple of functional appliances can go a long way. While this is not always necessary, especially if your property already has good-looking interior design and quality fittings, it can help a lot if you’re looking for a quick sale.
As a matter of fact, a study from the National Association of Realtors suggests staging can help increase the price of properties by up to 10%. That makes it worth the investment.
Indeed, selling your beloved home is a major life milestone. It can be exciting and stressful at the same time. This is especially true for first-time sellers who don’t know what to expect.
Preparing, listing, making necessary repairs, staging, finding and accommodating potential buyers, and navigating through the whole closing process can be overwhelming for anyone. However, home selling isn’t rocket science. With a little know-how, you can avoid mistakes and save yourself from major financial pitfalls.