As the real estate market has picked up, especially over the past 12 months, some sellers have automatically assumed their property will sell within days of going on the market.
This might be the case in certain markets, but you can’t afford to take it for granted. Particularly if you commit certain mistakes, you can slow down the sale of your home … even in the most active real estate markets.
Every individual real estate market, property, and homeowner is unique. It can be an error to make an overarching assumption regarding the home sales process in your region.
But for each special circumstance, there’s usually a general rule that can be applied. In terms of home sales, there are a handful of general mistakes that tend to slow things down.
If you’re selling your home, or preparing to in the near future, you need to avoid committing the following four major blunders at all costs.
The obvious place to start is pricing. This is your master lever, so to speak.
The higher you elevate the price, the slower the process is likely to be. The more you lower the price, the faster the home will probably sell. This is the conventional idea, anyway.
The issue here is that most people don’t recognize when their property has been improperly priced; or they don’t believe a minor discrepancy is enough to make a difference. This is simply not true.
Prices that are even five percent over market value will discourage many buyers from taking a look at your home. Even if you’d be willing to negotiate, buyers won’t know what you’re thinking. All they see is an inflated price that’s beyond their budget, so they choose to look elsewhere for homes they can afford.
Instead of setting a high price and assuming buyers will negotiate the price down to a level that’s closer to what it’s really worth, go ahead and price your home to sell. Contrary to popular belief, not all buyers will submit a lowball offer and expect the seller to meet them in the middle, particularly in today’s hot market.
Many buyers — especially in this market — will put in an offer for the asking amount if they truly want the home, because they expect competition for the property.
“Research shows that overpricing your home and then dropping the price several times while it languishes on the market usually leads to selling it at a much lower price than what you originally should have asked for it,” writes Michele Lerner of Realtor.com.
“The longer a home stays on the market, the deeper the discount is likely to be off the original price.”
“The negotiation is one of the most crucial steps to determine the success of the deal,” writes Realtor Anita Clark. “It has a direct impact on how fast your property sells and how much of a return on investment (if any) you will see.”
The key is to remember that both parties can win. The home sales process doesn’t have to be a win-lose proposition.
The biggest negotiation faux pas sellers make is failing to look at their home through the lens of the buyer. “We all take pride in our homes. That is why we tend to forgive and thus dismiss its little flaws,” Clark says.
“You might appreciate those minor imperfections because they remind you of a certain episode of your life.” But is a buyer really going to find the home’s flaws attractive or appealing?
Be honest with yourself and the buyer and point out the obvious flaws and issues. Instead of hiding them, offset them by citing the many benefits of the property. There has to be some consistency between the reality of the home and your sales expectations.
Another negotiation error involves taking what Clark calls an “us vs. them attitude.” You and your agent should certainly work as a team, but you shouldn’t look at the buyers as the opposition.
Instead, think of it as everyone working together to reach a deal that’s mutually beneficial to all the parties involved. Taking this stance will help you avoid turning antagonistic and encourage you to cooperate in a way that increases the chances of reaching an agreement.
The right agent can make all the difference in the world. If you’re trying to sell your home by yourself, without any professional experience, you’re probably going to become a cog in the wheel of the entire process.
While you might think, “Hey, I can save 6 percent and put that money toward the new house,” you’re not taking into account the additional costs.
First off, most buyers’ agents don’t like showing for-sale-by-owner (FSBO) homes because of the inevitable hassles. “There are only two reasons why I show an FSBO: There is no other inventory available or the price is ridiculously low,” says Realtor Bruce Ailion.
“FSBO sellers are viewed as unrealistic, unreasonable, and difficult sellers whom professional Realtors have rejected.”
Secondly, most FSBO sales linger on the market because the seller lacks the negotiation skills of a professional agent. You may end up selling your home, all right, but it will probably take longer and you’ll end up netting less — even after saving the six percent commission.
You can’t assume a for-sale sign in your front yard is going to have potential buyers come running. In today’s market, you almost have to invest in additional forms of promotion if you want to sell your home quickly.
This means posting professional listings with high-quality photos and descriptions on easily accessible websites and listing engines. When you hire an agent, ask him or her about favorite marketing and listing strategies. This should give you an idea of how the person operates.
Green Residential has served the Houston real estate market for more than 30 years. It’s our aim to offer superior property management services to investors and owners of residential properties.
We would love to work with you, should you ever decide to rent out your home. For additional information about any of our individual services, please don’t hesitate to contact us today by calling 713-395-9700.
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