What not to do when selling a home (8 common mistakes sellers make)
Selling a home can be complicated. The process is like no other financial transaction most people will make. Too often, sellers sabotage the sale of their home by making easily avoidable mistakes.
With the help of real estate agents and title insurers, we have collected a list of typical blunders sellers make. Avoid them, and you'll be well on your way to a smooth sale.
Letting ego or emotion affect the sale:
"I explain to sellers that as emotional as selling can be, when the decision is made to sell their home, it is now a product for sale just as any other product, and they have to do their best to emotionally separate themselves and not get their feelings hurt if an offer comes in less than their desired amount," said Dee Dee Miller, an agent with Long and Foster and secretary of the Maryland Realtors Association. "Sellers need to remember to focus on the end result. They sometimes get too hung up on the little details and miss the big picture. Carrying costs for additional time on market with regular home maintenance and mortgage, taxes and insurance sometimes is more than accepting the lower offer."
Overlooking extra fees at closing:
The increase in affiliated business arrangements and marketing service agreements has had a negative impact on seller fees, says Joe Gentile, president of Federal Title & Escrow.
"Because these arrangements call for a kickback or sharing of proceeds from the title company to their affiliated real estate broker, title companies that engage in this activity need to charge higher fees to be able to afford the kickback," Gentile said. "Since sellers don't typically inquire about fees, the easiest place to charge more is on the seller side."
Ask whether the buyer is using a title company affiliated with the buyer's agent brokerage. If so, the seller should insist on a nonaffiliated title company to protect their interests. Before signing the contract, ask for a written quote for seller's fees from the title company.
Not staging a home:
All homes can benefit from staging, whether they are studio condos or lavish mansions.
"Sellers often underestimate the power of furnishings and staging," said Steve Centrella, an agent with Redfin. "Even spacious rooms can be hard to appreciate when cluttered with the owner's knickknacks and personal effects. You want the buyer to be able to walk in and easily envision their life in the home."
Some sellers go to the extreme and take all their furnishings out of a house.
"An empty home presents a different challenge in that it's difficult to gauge the space and how it lives," Centrella said. "Ironically, empty homes often seem smaller than properties staged with appropriately sized furnishings. Properties that have a unique layout or open-concept spaces benefit the most from staging because they give buyers a plan for how the space can be used. We recently had a property that was listed vacant and sat on the market for several weeks. We relisted with staging and immediately received multiple offers."
Putting bad photos of your house online:
"Professional photos are the expectation of today's buyer," says Sharron Jones, an agent with Weichert Realtors. "Their time is valuable, and they want to see a lot of photos to help them narrow their choices. Properties with either no photos or poor photos often do not even get seen by buyers."
Photos are one of the best marketing tools for a house.
"Professional photos create more interest in a property for sale," Jones said. "More interest leads to more prospective buyers and more excitement. Most importantly, more excitement creates the best offer for a seller."
Poorly shot photos are worse than no photos.
"It is discouraging to see dark photos, fuzzy photos, or photos that show a cluttered house with clothes on the bed or toiletries all over the bathroom vanities," Jones said.
Trying to sell the house yourself:
"While sellers choose to go the [For Sale By Owner] route to avoid paying commissions, many don't realize they are losing the guidance and advocacy an agent will provide," says Tim Kelly Kiernan, an agent with Re/Max Excellence. "It is a Realtor's job to represent the best interest of the buyer and negotiate on their behalf before, during and after the sale. While selling may seem easier, it's important to have a knowledgeable guide who understands the process forwards and backwards."
Pricing your home too high:
"Buyers are extraordinarily well educated in today's market," said David Orso, an agent with Compass. "There's no fooling a buyer. They have all the historical data. They have access to tax records. They know what you paid for the property. A seller needs to fundamentally understand they are dealing with a very educated party in the negotiation."
Buyers read into a seller's list price. If it is too high, the inference is that the sellers are unreasonable, or they owe too much on their house.
"You are signaling to the market negatively when you overprice," Orso said. "The seller might think: 'It's OK. They can just make me an offer.' Buyers just don't do that."
If a seller misprices a house, the number of days on market can work against him. Buyers will wonder why the house hasn't sold.
"They don't want to be the idiot that bought a house that nobody else wanted," Orso said.
Failing to make necessary repairs:
"Whatever [improvements] you do, you want it to be emotionally pleasing," said Dan Rochon, an agent with Keller Williams. "The goal here is to make sure that when we list your property, we attract to the emotions of buyers. Pay particular attention to things like the landscaping, the front door and the driveway to create that dynamic first impression."
But before you spend a lot of money renovating your house, consult with a real estate agent to make sure you are spending your money wisely.
"I once met with a seller that just finished investing $35,000 into their home to prepare it for sale before meeting with me," Rochon said. "Unfortunately, they spent it on all of the areas that did not get them a high return, such as replacing all mechanicals and roofing while they neglected the outdated 1950s kitchen and bathrooms. As the items that they did improve were in functional repair, they could have better benefited from enhancing the areas that would best attract a buyer, such as improving the landscape and updating the kitchen and bathrooms."
Failing to disclose a defect:
Although it varies by state, sellers are generally required to disclose to buyers the condition of the house and any material defects, which could include structural components such as the roof, operating conditions of the HVAC and drainage problems on the property.
"It's always smarter to disclose," said Sherri Anne Green, an agent with Coldwell Banker Residential Brokerage. "Be very upfront, very forthcoming. Most of the time, buyers are savvy."
A seller doesn't have to disclose if a crime was committed in the home, such as a murder, or if there's a ghost haunting the house. But it's best not to hide what you know.
"Anything that can be shared that helps the buyer feel comfortable with the purchase is really positive," she said.
Failure to disclose a defect can have harsh ramifications.
"You can be held liable," Green said. "Two worst-case scenarios -- the buyer could cancel the contract potentially, and then depending on the situation, the buyer may seek legal counsel."