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When people sell their home, they often make common mistakes which cost them thousands of dollars but which they could have retained had they sold their home correctly.
Blogger: Geoff Baldwin, managing director, RE/MAX WA
Selling a home is one of the most important financial transactions that a person will make during their life.
Below are listed a seven of the most common mistakes made by homeowners when they decide to sell their home.
1: Overpricing resulting in the property “staling” itself to the market. History shows that the best price is achieved in the first 30 to 42 days on the market. The most asked question by interested buyers is “How long has it been for sale?” The longer the property has been on the market the less a buyer will generally offer because they know the interest and hence the competition has dissipated.
2: Listing for the lowest fee rather than with the best agent. Often people say they want a cheaper agent because every cent counts however, just as we look for the best doctor or the best accountant, so to should we seek out the best agent in our area and they will rarely be the cheapest. A few thousand dollars perceived saving in commission can mean a $20,000 loss in sales price through lack of skills and/or resources. The time to negotiate on commission is when the agent has done the job and has an offer on the table, not when you list. If the offer is a good one, be happy to pay the commission, if it is not up to what was indicated then that is the time to talk commission.
3: Overcapitalizing the home for the neighborhood. This happens with additions and upgrades being made, the cost of which simply cannot be recouped. Overcapitalizing cost millions of dollars in WA each year.
4: Hiring an agent based on non-business factors ie: they are a relation or a family friend. Make sure you're hiring an experienced and proven agency with a great track record. It might be nice to hand over your largest asset to your nephew who has just got his sales certificate -- but you could end up losing a friendship and thousands of dollars.
5: Getting emotionally involved in the sale of the home. This is one of the biggest challenges home sellers face when putting their house on the market. Once you decide to sell your house, it's no longer a home, but a product. The property needs to be prepared as a product, marketed as a product, and priced as a product. Let the buyers get emotionally involved as it will be their new “home”.
6: Covering up problems. Homebuyers today are much more informed about building and maintenance issues. For example, if during a closer inspection the potential buyer finds faults with the swimming pool, bore, structure, etc they quickly lose interest because they will then believe other problems may have been hidden.
7: Not allowing the selling agent to do their job. For example, some owners do not like home opens and others do not want a sign out front. The result is they hamper the process, exclude a large number of potential buyers from knowing about or viewing the property and reduce competition and the chance a good offer. Once a homeowner chooses a reputable and experienced selling agency they should allow them to use their skills to do their job unhindered.