Sellers dream of a flawlessly executed home sale where everything goes smoothly, and they end up with a satisfied buyer. To achieve this ideal end goal, it’s important to be aware of the mistakes along the way that could potentially derail the sale. Mistakes in the selling process come in all sizes, but some can be more costly than others.
1. Incorrect Pricing
Simply put, sellers want to get the most value for their home. Inaccurately priced homes create complications in the selling process and can be costly. Overpriced homes are unable to compete with other homes in a more expensive bracket, reducing its appeal to buyers. The longer a home stays on the market, the more likely the seller will have to lower the price, and this could result in a final asking price that is well below what the home is worth. Underpricing can be used as a strategy to generate added interest among buyers and thereby drive up the home’s market value, but it requires that a bidding war take place among buyers.
2. Underestimating Selling Costs
There are many costs associated with selling a home that can easily pile up if not planned for. Commission fees take up a significant portion of selling costs, typically between five to six percent of the sale price. Sellers must budget for home inspections, making repairs, and staging the home to get it market-ready. During closing, sellers need to prepare for various costs including sales tax, attorney fees, and any fees related to the transfer of the title, and more. Not accounting for any of these costs can come as an unpleasant surprise.
3. Selling When Underwater
It may be tempting to think of selling a home solely as a revenue-generating event. However, if a seller still owes more on their mortgage than what their home is worth, or if the property has gone down in value, they still may not make enough money on the sale to pay off the mortgage. Any homeowner who finds themselves underwater on their mortgage should consider building more equity before they sell.
4. Selling FSBO
Selling a home “For Sale By Owner” (FSBO) presents sellers with the opportunity to save on commission fees but is a complex and risky process that can easily lead to serious costs. Not only does selling FSBO mean that the seller will incur all costs an agent would have taken on to market the home, but they are accepting added liability as well. If any mistake occurs during the offer process, negotiations, or closing, the seller finds themselves without the representation of an experienced professional. This leaves a great opportunity for costly mistakes that could potentially jeopardize the sale.
5. Failing to Disclose Repairs
If a seller fails to disclose any outstanding repairs and issues inherent in the home, they will likely come to light during the buyer’s inspection and can create a very costly situation for the seller. These losses can be avoided by being transparent about what repairs are needed ahead of time. Sellers can also opt to conduct a pre-listing inspection, which can be especially helpful in competitive markets. Disclosure rules vary by state.
6. Neglecting to Stage Your Home
Home staging is a critical element for getting the most value for a home and selling it quickly. By neglecting to stage, sellers are opening the door for lowered offers and reduced sale prices. The staging process is also the perfect time for sellers to inspect their home for any minor or cosmetic repairs that can be addressed quickly.
7. Not Choosing the Best Offer
Naturally, the highest offer received on a home may seem like the most enticing. But just because an offer may be higher than another doesn’t mean it’s the best one. It’s critical for sellers to communicate with their agent about the full terms of the offer to understand its contingencies, how it affects their bottom line, and how those components align with their needs and preferences.