Buying or selling your home is a very large important transaction. Be discerning when taking advice from people. If you’re taking advice from someone, make sure they’re a competent source. I hear people repeat things so far fetched I often have to ask, “who told you that?” In most cases the source is just an acquaintance with little or no real estate knowledge, usually regurgitating incorrect information they’ve heard from someone doing the same thing.
Be smart – below are the 5 biggest mistakes people make when buying or selling real estate that lose them money.
Using a ‘real estate help site’ – besides posting a home for sale on their website, these ‘real estate help sites’ offer little more value than a yard sign. Unfortunately, you pay these companies up-front. If your house doesn’t sell, your money’s gone. ‘Real estate help sites’ like Property Guys and ComFree advertise they’re a comparable option to listing professionally but the services and value they offer is meagre. They don’t provide a fraction of what a professional marketing Realtor® using the MLS® system can offer. Assuming a ‘real estate help site’ is comparable to the MLS® is like assuming a mouse eats as much as a lion.
A very high percentage of homes listed on ‘real estate help sites’ are later listing by a professionally Realtor® to finally sell. This, unfortunately, happens after the seller has already flushed thousands down the ‘real estate help site’ drain.
A good Realtor® only charges commission if your home sells…
1. (b) Paying additional fees to a ‘real estate help site’ for submission to the MLS® – Most people who fall for this additional “pay upfront” service have no idea what they’re actually getting – or not getting. It sounds like a valuable option because they assume being listed on the MLS® = professional listing. The MLS® system is the best way to market your property to the most qualified buyers, but it only helps if it’s used properly. The benefit of the MLS® system is it’s connection to the network of professional Realtors® assisting qualified buyers; but a Realtor® can tell if a property is merely listed on the MLS® – usually from an out of area agent – and knowing there’s no selling representation it’ll take twice the work to complete the deal. These ‘mere listings’ are also often listed with little or no commission, and you can’t blame a salesperson if they overlook a property that won’t earn them income.
Using an acquaintance Realtor® to sell your home – most people, when hiring a Realtor®, call their friend or ask a friend to refer a Realtor®. Then, with few questions asked, they hire whoever… Does every Realtor® offer the same service, strategy and experience? NO! It’s important to find the Realtor® with the most in-depth sales & marketing plan and strategy. Interview a few to see how they compare – you’ll understand pretty quick who has the best plan and you’ll notice some have no plan. The MLS is the best way to get your home in front of the most potential buyers, and there are additional techniques a marketing Realtor® uses to improve your sale price. Hire just anyone and you risk earning less.
2. (b) Using a Realtor® that doesn’t watch and understand the market or doesn’t give you all the information to make the most informed decision. Mose Realtors will take the listing of your house whether it’s a good time for you to sell or not. 90% of Realtors are desperate for listings and would never compromise losing your listing by informing you of negative variables that might cause you to reconsider listing.
For example: when sales numbers are down and inventory is very high it might not be the ideal time to sell your home. The more listings there are on the market will have a negative impact on the average sale price in your market and for your home. A Realtor desperate for a listing might not share this information if it means possibly losing your listing.
Listing with the Realtor® promising the highest price – This is a common strategy that home sellers fall for. Of course, you want to get the highest price for your house but listing higher than what your home can sell for will lead to a lower sale price. It’s important to get a few price evaluations and use the information from each one to make an informed price decision.
Did you know that even if you received an offer on your home priced over “market value” the deal will probably crash? The bank will insist on an appraisal, and if the numbers don’t “meet up” the bank won’t lend any higher than the appraised value.
The chart above demonstrates how listing too high can be a mistake. Click on the chart above for a larger image…
Selling your home privately – It is possible to sell your home on your own and it’s the best way to guarantee the lowest sale price. The most ironic part of the advice you get from someone who’s sold their home privately is they’re OBLIVIOUS to the profit they missed. Add the time, effort and money it takes to market and show your home yourself and you’ve probably invested what you thought you’d saved. Add this number to the amount of money you missed in profit and you’ve probably made the biggest financial mistake of your life. The bright side to this is, you won’t even notice; it’s hard to quantify the effort and the money you’ve invested, and you won’t even see the money you lost on the sale.
Not preparing properly for potential buyers – Selling your home can be very frustrating with so many inconvenient viewing appointments, but the more people you have through your property and the longer they stay the better. An owner should never be around for viewings. Potential buyers will leave quickly if the owner of the home is present during viewing. Keep your home as clean as possible all the time during the listing period. A Realtor® may need to show your home on short notice – saying “no” to a potential buyer is a huge mistake.
Make your home smell nice. Whether it’s baking (hard to do short notice) or using nice scents, you have to make the atmosphere inviting. If a house has strange smells, smoke, cooking… buyers will leave quickly.
Above are the 5 biggest mistakes home sellers make that lose them money. Most mistakes come from a lack of market knowledge and bad advice from less than qualified “advisors.” When planning to buy or sell it’s very important you know as much as possible regarding your local market. Use every advantage!