Mistakes that Home Sellers Can Make

You want the home selling process to be as smooth and painless as possible. Thinking about all the things that can go wrong might be overwhelming, but remember that knowledge is power. Here are some common mistakes to avoid when selling your home.

  1. Underestimating the cost of selling. Wait, aren’t you supposed to make money if you’re the seller? Well, yes, but the total cost to sell a home can amount to much more than the 5-6% in agent commissions most people are expecting to pay. As a seller, you must also account for closing costs, repairs, and other concessions to the buyer. The true cost of selling can often be closer to 10% of the sale price of the home.
  2. Setting an unrealistic price can be a huge mistake. What you want from your home can be very different than what the market will pay. Sure, you don’t want to price your home too low and leave money on the table for the sake of a quick sale, but you also don’t want your over-priced house to be listed on the market for months – or worse, years.
  3. You must provide the buyer with legally required disclosures. You, the seller, are legally required to disclose to the potential buyer anything that may affect the value of the property. For example if your home is sitting on a sinkhole, you must disclose this to the buyer. It is considered illegal in most places to deliberately conceal major property defects, so you must put your real estate disclosures in writing.
  4. After you deliver your written real estate disclosures, you must make sure that you receive from them acknowledgement of receipt of these disclosures, also in writing. What good is it that you delivered your disclosures to the buyer if you can’t prove it later? Your agent should handle this for you, but it doesn’t hurt to double check and make sure it’s been done.
  5. Do not accept the buyer with the highest offer without regarding the other contractual terms. Sure, the potential buyer you have your eye on is offering ten thousand dollars more than his counterpart, potential buyer number two, but they also require that you cover all closing costs. That can eat up that ten thousand dollars extra, and fast!
  6. Ignoring necessary major repairs in favor of costly cosmetic renovations is going to be a big mistake. A long list of maintenance issues can mean trouble for you as a seller, and it means nothing that you have a lovely new staircase if no one will buy your home because the wiring in the walls is not up to code. Assert your priorities!
  7. Not preparing your home for sale is another common mistake made by sellers. Potential buyers are almost certainly going to want to tour your home, and generally speaking, the cleaner and less cluttered your home is, the more appeal it will have. Clutter can make your home feel smaller, and the less staged your house is, the harder it is for potential buyers to see themselves living there. Make sure you don’t forget about curb appeal, either!
  8. Choosing the wrong agent can spell disaster for you as the seller! Make sure you select an agent who has good reviews and is properly licensed to do their job. You can interview multiple agents at once to check their credentials and customer satisfaction history, and when you do so, make sure that they have experience buying and selling homes in your neighborhood and at your price point.
  9. Choosing an agent you don’t get along well with is less of a disaster than choosing one who is unlicensed, but it can also be much more stressful for you! Make sure that you talk to your agent about your expectations. Discuss their marketing plan for your home, their negotiation style, how often they plan to communicate with you and how they plan to do it, if they have any current listings that might compete with yours, and whether or not they will require you to sign a contract with them.
  10. Showing your home to potential buyers can feel invasive and troublesome, but limiting these showings can make sure your house never gets off the market. The goal is to accommodate as many buyers as possible, even if their timing is inconvenient. This means you may have to vacate on short notice or during a time that is usually scheduled to be spent in your home.
  11. Do not fail to consider your broader financial situation. Many sellers don’t have a clear idea of their financial health before they decide to sell their home. This can mean some painful surprises! Before you make the decision to sell, assess your income and debts, as well as any upcoming expenses during your move. You can contact your bank or mortgage advisor to find out how much you owe on your current home.
  12. You must get everything in writing from everyone, from your agent to the buyer of your home. No negotiations about the purchase of your house should happen verbally. Anyone who is serious about buying your house will have no problem putting an offer in writing and sending it to you. You should also consult with your agent to make sure that all offers and counter offers you receive are legally binding documents.
  13. Do not agree to a reduced earnest money deposit. There is a lot of uncertainty about what the right amount of earnest money is, and many consider it 3-5%. No matter what you ask for, you want to make sure it is fair for all parties. Of course you want to please your potential buyer, but you should not short-change yourself, either.
  14. Make sure your sales agreement is complete. Use the complete legal description of your home in any sales paperwork. A real estate attorney can assist you with this. It is this description, not your home address, that is recognized by the government and by lenders, so make sure that all of your sales paperwork reflects the exact verbiage of the description of your home as stated on your property taxes.
  15. Not asking for help can cost you tens of thousands of dollars when selling your house. You must have help from a real estate agent and attorney. A real estate attorney can help you ensure that your entire sales transaction, from start to finish, is legally enforceable and is as efficient as possible.
  16. Do not use a template contract that was purchased online for any part of the home selling process. Not all template contracts reflect the laws in your area, and do not have the required provisions or addenda. The failure to include these provisions or addenda can make your contract voidable at the buyer’s option.
  17. You must screen your potential buyer before signing a contract with them. If a buyer has a 30 day finance period and then a 45 day home inspection contingency and then 60 days to close, and they are not qualified from the beginning to purchase your home, they have just wasted four months of your time. You should always require a pre-qualification letter from anyone who is even remotely interested in buying your home from you!
  18. Do you have a contingency plan if you aren’t able to find a new home? You should. As a seller, what are your plans with regard to finding your new home? Do you need to include a provision in the contracts allowing you to remain in your house after the sale for a certain period of time? Do you need a contingency providing that the contract to sell your current house is not valid until you find a new house? Make sure you consider all of this when selling!
  19. Don’t set an unrealistic timeline. You will not have cash in hand for your home in two days. Unless you live in a zip code with highly desirable real estate, it is almost impossible to say how fast the house will sell, so don’t rely on it selling quickly. You should prepare financially for both situations – that your home sells quickly, and that it does not. Budget for both a few more months in your old home as well as being ready to move into your new home immediately and quickly.
  20. Make sure you know the real value of your home. Use recent sales in your area as comparisons, consider a second or third option from other agents, and consider how much you have invested into renovations and maintenance over the years – you may know your home’s value better than a professional realtor thanks to your firsthand experience living there.

Now that you’re aware of some common mistakes to avoid when selling your home, you can be more confident when something doesn’t go as planned.

Leave a Reply

Your email address will not be published. Required fields are marked *