If you do a quick Google search, you will find a lot of tips and advice out there for people who are thinking of selling. The #1 tip you will find out there is to price your home correctly from the beginning in order to sell fast and avoid price reductions along the way. But there is so much more that goes into marketing & advertising a home besides pricing it correctly, which is often overlooked completely by sellers. Here is my list of top 10 mistakes I see sellers make when they put their homes on the market.
Not converting their home to a product
This is probably the biggest mistake I see sellers make, in all markets. The moment you decide to sell, you must change your mindset about your home and begin viewing it as a desirable product for sale… a “solution” to a buyer’s “problem”. And like any product out there on the market, the higher the quality of the product and the more “problems” it solves, the more valuable it is to the buyer. It is important to look at your home objectively and ask yourself if it meets the expectations of the buyer demographic in your market – and if it doesn’t, be open to making whatever changes are necessary to create a product that buyers can’t resist!
Not determining a “target timeline”
Almost ALL agents will advise their sellers that “overpricing” their home is the biggest mistake they can make, and I cannot disagree with this more. I can probably write an entire blog on just that one controversy. However, suffice it to say that NO agent can judge with 100% certainty whether a price is too high. Rather, it is more important for sellers to set a timeline goal, which I like to call a target date or target timeline. This would be the date by which you want your transaction closed and to receive your net proceeds.
By having a target timeline in mind, you can be more intentional and strategic with the marketing & advertising of your home, and perhaps wait for that ideal buyer for your home. In my experience, sellers almost ALWAYS miss this step in the process, and setting an asking price should never be done without first knowing the target timeline.
Not understanding the type of market in which you're competing
People generalize about market conditions all the time, and as a result, sellers often approach selling their home from a “one-size-fits-all” approach. But just because it might be a “seller’s market” overall, doesn’t mean that certain neighborhoods, subdivisions or even tracts won’t have a lot more inventory than the “average” market. You need to know YOUR particular market, YOUR competition and whether your market is ascending, descending or more neutral. This will then dictate your marketing strategy.
Not investing money wisely
Most sellers are aware that there are costs involved with selling their home and think that by minimizing these costs it will mean more money in their pocket at the end of the day. Obviously it is wise to minimize frivolous costs, but the mistake I see sellers make is not seeing when a particular cost has the potential to make them more money than they would have otherwise. For example, sellers believe that keeping their home on the market for a few months longer means they are losing money in additional carrying costs. But if those few months allowed you to make the right upgrades to the home, for which buyers will be willing to pay more, maybe it is worth the extra time.
Not knowing your audience
Here is something you might find surprising – you are not just selling your home to potential buyers when you put your home on the market. In order to sell your home for top dollar, you need to sell it 3 times… once to buyers… once to buyers’ AGENTS and then to the appraiser (if the buyer is getting a loan). Potential buyers are obvious, but the other 2 parties also have the power to influence whether or not a buyer ultimately buys your home, so you need to be aware of their roles in the process, what is important to them throughout this process, and how to address their concerns through the selling process as well.
Not knowing what is really important to buyers
Earlier I discussed the concept of converting your home into a product that solves buyers’ “problems”. Did you know there are 2 types of “problems” that drive consumer behavior? The first type is External problems – the most obvious problems are at the surface… in the case of home-buyers, “I need to buy a home”. The second, and more important type is Internal problems – these are the problems under the surface that are more emotional and personal for the consumer, “I want to buy a home of which I can be proud, in which I can entertain friends & family and in which I am comfortable.”. The more potential Internal problems your product can satisfy, the more value the buyer will perceive in the product.
Making it hard for buyers to see your property
First and foremost, make sure your property has a GREAT online presence. Start with amazing photos, of all areas of the property, including several perspectives of each room. Videos and virtual tours have become almost essential in today's COVID-impacted market. Great photos and videography won't necessarily preclude a buyer's need to see a property in person, however... but a buyer should have a realistic perspective of the home prior to an in-person tour.
Touring properties in-person has become a bit more difficult, although certainly not impossible, to manage through COVID-19. But it is SO important to make your property available to buyers as much as possible in order to not miss your opportunity to find your ideal buyer. There are ways to make in-person home tours safer through COVID, and I would encourage you restrict your home as little as possible while it is on the market.
Thinking a low appraisal is entirely your problem
This is another “controversial” topic about which I will likely draw some criticism (totally welcome – I love a healthy but respectful debate!). I could probably write an entire article just on this topic alone. In the event you are successful finding a buyer who is willing to pay a premium for your high-quality home, it is possible it might not appraise for that full value if the buyer is financing their home purchase. The common belief is that a seller must drop the price in order for the transaction to close but this simply is NOT true.
Suffice it to say that an appraisal is an art; not a science, and the appraiser is working for the buyer’s lender; not the buyer, and they are safeguarding the lender’s risk. While it could limit your ideal buyer pool, you as the seller have a choice as to whether you renegotiate the price or simply wait for the “right” buyer who will either be willing to pay the difference between the sales price and appraisal value or who is willing to pay cash and doesn’t need financing.
Choosing an offer only based on price
There are so many other terms that make up a buyer’s offer; not just the offering price. Terms such as type of financing, closing date, contingencies & timelines, earnest money deposit, etc. Sellers really need to look at the offer in its entirety, weigh the risks inherent in the offer and decide which offer brings them closest to their ultimate goal of selling.
Believing you are required to make repairs
In California, the residential purchase agreement is considered an “as-is” contract. Meaning, buyers should expect the home to be in the same condition as when they wrote their initial offer. By default, if their offer is accepted, buyers are afforded a period of time to inspect and investigate the property to make sure the condition of the property is acceptable. If they find something wrong with the house during their investigations, they may request the seller to repair it, however, seller are not required through the purchase agreement to make those repairs. There are certain cases when a seller might think it is worth addressing certain issues, but all repairs, unless otherwise dictated in the accepted agreement, are subject to negotiation and agreement.
I hope this list has given you a lot more to consider when selling your home beyond just the price. Price is just one variable to consider when selling your home – and as the name suggests, there isn’t just one “right” price as it varies depending on the other inputs to the process.
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