Buying and owning a home is a significant life event for most people. An even bigger event in the life of a homeowner is choosing to sell a home. Selling homes can be extremely time consuming and emotionally draining, especially if you haven't prepared yourself for the negotiation surrounding your property. At times, it can even seem like an invasion of your privacy; complete strangers will soon be parading into your bedroom, opening your closets and medicine cabinets, and asking questions you may hesitate to answer. They may criticize your most favored aspects of your living space, a space that you've become emotionally attached to. Perhaps worst of all, they may offer less money than you are prepared to accept.
With very little experience and some serious emotional attachment on your hands, it is not uncommon for many first-time home sellers to make a ton of mistakes. With a little know-how and some proper perspective, however, you can navigate your way into your next home and through a successful sales transaction. Read on to learn all about the common pitfalls and mistakes made in real estate, and how to avoid them as you come to the closing table:
Getting a little emotional in here.....
It is not uncommon for many people to feel a sense of nostalgia when thinking about their current home. It is filled with memories, people, and cherished items that you may have to consider relinquishing in light of your new move, and this may cause you to feel a little bit attached to needing a certain outcome. Let's put things in perspective here--as you contemplate the sale of your home, think of yourself as a business person or sales associate rather than a homeowner, and you'll focus more on creating a smooth transaction rather than any small details you may have to relinquish in order to get the job done. Being able to look at the transaction purely from a financial perspective will distance you somewhat from the emotions attached to your property.
Remember how it felt when you were first shopping for a home. Buying homes is an exciting time for prospective purchasers! You were not simply looking for a property, but the lifestyle and memories associated with owning a home. If you put some time and effort into staging your home for sale and making cosmetic improvements, you'll be less likely to hang on to that old image that you had, and you'll be able to hand it to someone else with a little less emotion attached to it.
Hiring or not hiring?
Does it pay to hire a real estate agent? While most agents require a hefty portion of the proceeds as their commission---usually between 5 and 6 percent of the total purchase price, it is generally not a good idea to attempt the sale of a property if you have never done it before. A reputable agent generally has your best interests at heart in addition to his or her salary; they have intimate knowledge of fair market prices, and they can help you set a competitive price that will work for you and a potential buyer. Should any problems arise during the transaction, an experienced professional can step in and quickly resolve them for you. Another benefit of having a licensed professional in your corner at the negotiation table is that they have inside knowledge of paperwork, state and local regulations, and financing options that would benefit all parties.
Taking into account these considerations, here are some selling mistakes that can be avoided with a little preplanning and some thought as to what you'll need out of the whole transaction. With the right knowledge and the right planning, you'll be able to weather a successful transaction and gain some home selling experience, regardless of what the market will do. Read on to learn:
Mistake #1: Selling your home before you're truly ready
While selling a home is an exciting prospect, it is also physically, mentally, and emotionally challenging. The preparation and selling process can go on for months, and it can cost a pretty penny to set up your home in such a way that it gains you top dollar. Not only do you have to do some preparation for letting go of your home, you'll have to face the possibility that you may not find something that suits your needs right away; you may be in transition for awhile. If you are considering all of the possible scenarios for selling your home and moving to a new location and you are okay with all of the outcomes, then it may be time to put up that "for sale" sign.
Mistake #2: Entering the market "blindly"
Deciding to sell your home without doing a fair bit of research with regard to property values and selling prices in your area, you may find yourself with less than you'd need or like to have after closing. Talk to your real estate agent, do some searching with regard to house prices in your area, and price your property competitively to ensure that it will sell in a timely manner.
Mistake #3: Choosing to go it on your own
While agents do ask for a selling fee that may take profits out of your pocket, attempting to go it on your own without doing some research on fair market value could have disastrous consequences for you. Without a real estate agent, you'll have to prepare, present, schedule, and close your sale without the help of a professional who could lead you through the legal issues, potential pitfalls, and unknown obstacles that may arise in a selling situation. If you haven't sold before, it is well worth the selling fee and commission to procure someone who can lead you through the process smoothly.
Mistake #4: Failing to hire the right realtor
Realtors have had a bad rap at times--there are plenty of "slick Willy's" out there looking to make a quick sale with little regard to how it works out for you. You have gut instincts, it's time that you use them; consider getting a referral from a friend or family member, someone who has served them well in a buying or selling situation, and start from there. You can choose to do business with anyone that you wish; if something doesn't feel right, don't sign on the dotted line.
Mistake #5: Over customizing your home
There's polishing and prepping, and then there's going overboard when it comes to getting your home ready for sale. If the price of your house cannot be justified in your neighborhood after you choose to put an entire third story on your home, consider less costly forms of bringing things up to date and making everything look appealing and attractive. Two areas of your home to focus on are the kitchen and bathroom; if you do a few upgrades in these areas, you can justify a higher asking price.
Mistake #6: Pricing merely for profit
Taking a shot in the dark with regard to your asking price is not smart business when selling your home; it might be wise to procure a professional appraisal and compare it to prices of other homes sold in your area, and choose a reasonable asking price based on those factors.
Mistake #7: Letting emotions take center stage
You've raised children, added amenities, celebrated holidays and special occasions, and developed emotions around living in your home. The harsh reality of a selling situation is that someone else will soon own this property, and you must physically relinquish it to someone else. A new owner might not care how much you love your kitchen cupboard hardware, or that your child took his first steps on that fireplace hearth. Looking at this sale as a business transaction and looking forward to creating memories in a new location will help you keep a level head during the negotiations.
Mistake #8: Failing to disclose past issues of your home
Failing to disclose a major water leak in an upstairs bathroom or a cracked foundation in the basement to potential buyers is not only illegal, it will most likely be a deal breaker as you attempt to cover them up. A home inspection will quickly uncover both current and past problems, and your sale may fall through when potential buyers see you as untrustworthy. Furthermore, these disclosures could cost you valuable time and money if buyers demand that these items be fixed before they move in. It's best to disclose any and all issues that you are aware of, and work with your buyers to negotiate the repair or replacement of household fixtures prior to close.
Mistake #9: Trying to sell before your home is completely ready
The housing market is incredibly competitive right now--attempting to sell if you've rushed through cosmetic improvements, wiring and plumbing upgrades, and less than perfect paint jobs will leave you void of offers while houses with more thoughtful and deliberate improvements sell around you. Take your time, get some professional advice on how to best present your space, and start checking things off your "to do" list.
Mistake #10: Limiting showings
Sure, showing your house may be time consuming, it may be inconvenient, but it needs to happen. Whether you have to scurry out at dinnertime for a private showing, or make plans to be gone for an entire weekend as your agent prepares for an open house showing, just know that this time is short lived, and soon you'll be at the closing table, gathering your profits and getting ready to enter the buying arena as you look for your next beautiful property.
Mistake #11: Not considering the big financial picture
When buying homes or selling homes, many people fail to consider the bigger financial picture, which leads to some painful surprises that are both inconvenient and costly. One of the most common mistakes made in real estate is failing to look at all financial factors like income, debt, and upcoming expenses and repairs that will have to be incurred as you make a transition to a new home. One of the most important things you must ask yourself when considering a sale is whether you can afford to move at this time. If not, do what you can to clean up financial affairs, eliminate debt, and make the necessary changes to your property to ensure a profitable sale. Your financial future may depend on a successful sales transaction.
Learn from these mistakes
Taking a bit of this advice as you consider selling your home will ensure that you can get to close with something to offer and something to gain. Best of luck to you on your new adventure!