After the severe winter, it’s finally time for the spring real estate season. According to this week’s release of the S&P/Case-Shiller home price indexes, nationally, prices are up 23 percent from the bottom, but still remain about 20 percent below peak levels seen at the top of the housing bubble in 2006. But those price increases, combined with efforts to put a dent into mortgage levels, means that many homeowners are finally have enough equity in their homes to list and hopefully, sell them. That means it’s time for a refresher on the 9 Home Selling Mistakes to Avoid.
1.Overpricing the House: According to realtors, the top of the list is setting too high a price. Denise Rothberg, Licensed Real Estate Salesperson at Julia B Fee Sotheby's International Realty in Westchester, New York, “The first three weeks of a home’s entrance on the market are the most critical for creating interest and attracting buyers. Buyers often dismiss a listing that is ‘old and stale’, which means that the longer the home stays on the market, the likelihood is that the selling price will be lower, both in absolute dollars and as a percentage of list price.” Or as my late father once said to a friend who was listing his home above the market, “Nobody cares what YOU think the house is worth. The market will tell you what it’s worth.” The corollary to overpricing the house, is not knowing when to reduce the price. Generally speaking, if there’s been nary a bite for three to four weeks, it’s probably time for a price cut.
2. Choosing the wrong realtor: Your mother’s friend, who lives four towns away from you, may not be the best choice for a realtor. It’s fine to ask friends and family for a referral, but make sure that you invite three agents to create a comparative marketing analysis. During the process, you will see which of these professionals has leapt into the digital age, with a variety of ways to reach potential buyers. You may want to ask for the marketing plan in writing, so that the agent is on the hook.
3. Delaying or not performing necessary improvements and repairs: You know the drill here: first impressions matter, so paint the house, replace the broken windows, clean or replace old carpets, cut the lawn, plant the flowers and tend to the garden. Even the small stuff counts, says Rothberg. “Make sure all light bulbs in the house are working, remove all clutter from closets and surface areas, fix the leaky faucets, re-caulk the showers and tubs.” If all of this sounds like too much, you can hire a professional to “stage” your home, which essentially preps the home for sale.
4. Not disclosing problems: Most states require that you disclose defects in your home. If you try to hide them, the engineer’s inspection will likely find them, which provides the buyer with an opportunity to renegotiate, and could end up costing you more than the repair would have. Rothberg cautions that “the discovery phase can kill the deal and you will end up doing the repairs anyway to avoid repeat scenario with other prospective buyers.”
5. Making it hard for buyers to see your house: Rothberg notes that some sellers put so many restrictions on showing times, (“home can only be shown on Tuesdays 1-3pm, when the baby is napping or dog is being walked”), that potential buyers simply move on to the next home in their price range.
6. Distracting the buyer: Stay out of your house while it’s being shown. Your physical presence is not only distracting, but it may prevent the buyers from imagining the home as their own. Additionally, those family photos are beautiful, but they also distract the buyers and make it difficult for them to see themselves in the home.
7. Allowing emotions to take over: You hired an agent for many reasons, perhaps the most important of which is to protect you from yourself. Allow your broker to skillfully and calmly handle the negotiations. Rothberg cautions that “Reactive or emotional responses can impede the process or worse, kill a deal.”
8. Rushing to buy a new property before your sale is completed: You would have thought the housing boom and bust would cure people of this one, but I am often asked about dipping into retirement funds to “float” the down payment on the new home before the existing home is sold. Unless you have enough cash to cover the expenses of both properties for six to 12 months, it’s probably best to be patient. Or as my father, the stock and options trader said to my mother after they had sold one house and not purchased another one, “I’d rather be short one house than be long two.”
9. Not reading documents thoroughly or hiring a lawyer to do so on your behalf: These are legal documents, so you or a real estate lawyer should read all documents connected to this major transa