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Top 10 mistakes of home sellers
By Alana Klein •
Bankrate.com
You've advertised your home in the local paper. You've planted a big "Open
House" sign on your front lawn. You've even baked fresh cookies to pass
out to potential buyers. So why aren't people lining up at your door?
Selling a home is a complex, multi-faceted process. From choosing a
trustworthy real estate agent to pricing your home accurately and
presenting it properly, the selling process can be downright daunting,
especially for first-time sellers.
As eager as you may be to close the sale -- perhaps you have a new
mortgage or luxury sports car waiting to be financed -- you must not rush
the process. Take the time to research the real estate marketplace as well
as the credentials of your potential buyers and never hesitate to bombard
your agent with any questions you may have.
You don't want to fall victim to Bankrate's top-10 list of sellers'
biggest mistakes:
1. Overpricing your home.
It's important to be realistic about the value of your home. "Sellers must
make their agents present them with objective criteria for pricing," says
Terry Hankner, a Realtor with Comey & Shepherd Realtors in Cincinnati,
Ohio. "Comparative information is most critical in getting a house priced
properly." While all sellers are tempted to see how much they can get for
their homes, Hankner says once you ask for too much, it's hard to ask for
less later on in the process. "You run the risk of buyers thinking 'Oh
boy, I wonder why they had to reduce this one. There must be something
wrong with it.'" To get a realistic assessment of your home's worth,
research the cost of similar homes in your neighborhood and price it
accordingly.
2. Not displaying curb appeal.
You don't have to invest thousands of dollars into redecorating your home.
But there some basic steps you must take to present your house in the most
positive light. "When people drive by a home they're either turned on or
turned off. There's nothing more important than the exterior of your
home," says Richard F. Gaylord, a broker with RE/Max Real Estate
Specialists in Long Beach, Calif. "I once showed a home that was
magnificent. But it had an old, ugly front door that hadn't been painted
in years," he says. "People were only able to focus on that front door."
3. Overdoing home improvements.
Don't go overboard with staging your home. "You don't want your house to
be so pristine that it feels cold or so overdone that it looks like it's
out of a magazine," says Allyson Bernard, regional vice president for the
National Association of Realtors. "You want it to feel warm and
welcoming." Do, however, spruce up the yard, plant some flowers,
de-clutter the home's interior, rid the home of unpleasant smells, and
apply fresh coats of paint to all walls and doors.
4. Misunderstanding the buyer's offer.
Carefully reviewing and understanding the offer or purchase contract is
imperative. Here are a few things to look for: How much deposit the buyer
has agreed to put down -- is it a significant deposit? Has the buyer asked
for some credits to cover loan costs? Is the offer contingent upon the
owner selling his or her current home? If so, how is the selling process
going? "In most cases that contingency stays into effect until their deal
closes so you better find out if their home is priced properly," Gaylord
says. "These kinds of things are worth investigating."
5. Not getting your home inspected before listing it.
Have general inspections done ahead of time. Even though buyers will often
have the house inspected again, it's best to prepare for any potential
problems. "It can be very costly to the seller if he or she does not go
ahead with the inspection before the offer is placed," says Gaylord. "You
don't want to get stuck with a $7,000 fee because the termite, dry rot,
and fungus report determined that the wood in the foundation of your house
had deteriorated so badly that the whole house needs to be leveled."
6. Withholding information from potential buyers.
While it is tempting to hide or fail to mention the downfalls of a home --
perhaps it's a haven for cockroaches or located in an area that's prone to
floods or earthquakes -- it is best to give buyers full disclosure. This
kind of information can greatly affect the value or desirability of the
property.
7. Not being objective about your home.
While you may think your purple walls or poly-classic columns are great,
it is best to keep that opinion to yourself. "Sellers may feel they know
their home best but that doesn't mean they are the best people to sell
it," Bernard says. She recommends that sellers leave their home while the
agent shows it. "A lot of people feel uncomfortable looking at a home if
the buyer is right there. It's important to give the buyers space."
8. Poorly communicating with your agent.
Sellers should take a proactive approach to the selling process and not
rely solely on the agent. Sellers should insist upon regular updates about
the house and never assume the agent has taken care of everything.
Ultimately, it is the seller's responsibility to ensure everything is
running smoothly.
9. Not investigating your buyer.
Once you have an offer on the table, it's important to secure letters of
pre-qualification or loan approval from the buyers. These letters should
not only state that the buyers' credit has been checked but also that it
was acceptable to the lender. Also, it's important to ask buyers to
complete a loan application and submit it to their lender within a few
days after acceptance of the offer.
10. Not proofreading the closing statement.
Carefully review the statement, including the loan balance, repairs, and
other expenses that are detailed in order to avoid last-minute surprises
or errors. Make sure you get an estimated statement a few weeks prior to
closing and compare the final statement to the estimated one.
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