Selling your home can be surprisingly time-consuming and emotionally challenging, especially if you’ve never done it before or haven’t for many years. At times, it may feel like an invasion of privacy because strangers will come into your home, open your closets and cabinets, and poke around. Selling a home is a major life milestone and it can be complex when you consider all of the steps involved: preparing and listing, making repairs, finding a buyer, navigating the closing process, and finally moving into your next place.
The consequences of a misstep can impact your finances and most importantly, your peace-of-mind. Half the battle of selling a home is anticipating problems before they come up. With a complex, emotional transaction on your hands, it’s easy for home sellers to make a misstep or two. However, with a little insight, you can avoid many of these missteps. We will go over some of the most common missteps you should avoid when selling your home so you can also avoid unnecessary anxiety, stress and potentially losing your mind in the process!
Underestimating The Costs Of Selling
The total cost to sell a home can amount to much more than the 5-6% in agent commissions most people expect to pay. When you account for closing costs, repairs, and other concessions to the buyer, the costs of selling can be closer to 10% of the sale price, depending on the location.
In addition to the commissions and closing costs, there are other situations that can add to the costs of selling a home and getting into a new space. For example, if you move into your new home before selling your old one, you may have to rent a temporary place or pay for both mortgages as well as other carrying costs, such as utilities, HOA dues, taxes, and storage.
Be sure to account for any and all possibilities when selling your home to make sure you don’t put yourself in an unideal financial situation! Doing some math to estimate your net proceeds, meaning the amount of money you’ll pocket after selling costs are accounted for, will be an extremely helpful guide. Knowing this information before listing can help you not only get a better idea of how much you’ll have to spend transitioning to your next home but also how much you’ll be able to put toward the new home if you are purchasing another.
Setting An Unrealistic Sale Price
The price you want and what the market will pay can be two very different things. You might hear the term Fair Market Value, which refers to how a home is valued when both the buyer and seller are reasonably knowledgeable about the property and neither is under any pressure to buy or sell.
For the seller, it’s the sweet spot between asking too much or too little. If you can’t hit the sweet spot, you risk leaving money on the table or having your home sit on the market for a longer period of time, so setting the right asking price is key. Remember the comparative market analysis you or your agent did when you bought your home to determine a fair offering price? Buyers will do this for your home too, so as a seller you should be one step ahead of them.
You may have a general idea of how much your home could be worth based on homes with similar sizes and features that have sold near you. These comparable sales, also referred to as “comps”, are what many real estate agents use to suggest a listing price. The challenge is that no two comps are the same so you’d need to account for each difference between home features to be accurate. This is often called making adjustments, and it’s incredibly hard to do manually.
Most importantly, the goal of pricing is not just to try to maximize the selling price, it’s really to attract potential buyers to come look at your home. Even better, if you have multiple parties interested they may bid up the price higher than the asking price. This won’t happen if you price so high you don’t create interest and buyer competition. This all assumes the home looks attractive in the eyes of potential buyers. Read on where we discuss this topic.
Not Preparing Your Home For Sale
One of the challenges of listing your home on the market is showing your home to prospective buyers. Generally speaking, the cleaner, less cluttered, and more well-decorated your home is, the more appeal it can have. Clutter can make your home appear smaller and make it more difficult for buyers to picture themselves living in your home. In fact, staged homes sell 88% faster and for 20% more than those that aren’t staged, according to Realtor.com (Heidenry, 2021).
Sellers who do not clean and stage their homes can be throwing money down the drain. Don’t worry if you can’t afford to hire a professional! There are many things you can do on your own. Failing to take these steps can reduce your sales price and may also prevent you from getting a sale at all. If you haven’t attended to minor issues, such as a broken doorknob or dripping faucet, a potential buyer may wonder whether the house has larger, more costly issues that haven’t been addressed either.
Have a friend or an agent (someone with a fresh pair of eyes) point out areas of your home that need work. Because of your familiarity with your home, you may be immune to its trouble spots. Decluttering, cleaning thoroughly, putting a fresh coat of paint on the walls, and getting rid of any odors will help you make a good impression on potential buyers.
Lastly, don’t forget about curb appeal! Your home’s exterior is like the cover of a book, forming the first impression that buyers get of your property. If a home appears unkempt or in disrepair, buyers may be more skeptical about its condition when they’re considering an offer.
Selecting The Wrong Agent Or The Wrong Way To Sell
If you choose to work with a real estate agent, make sure you select an agent who has your best interests at heart. Some agents charge a flat fee, while others charge a percentage of the sales price, which is usually 5-6%.
To help ensure you’re getting the most bang for your buck, take the time to interview potential real estate agents. Check their licensing and credentials, see what past clients are saying in reviews, and make sure they have plenty of experience selling in your particular area and price point.
At the end of the day, you want the home selling process to be as smooth and painless as possible. Thinking about the things that could go wrong might be overwhelming, but remember that knowledge is power. Learning how to sell a house is crucial. Make sure you prepare mentally and financially for less-than-ideal scenarios, even if you don’t make any of these missteps.
Now that you’re aware of some common missteps to avoid when selling your home, you can be more confident when something doesn’t go as planned and put yourself in a better position to achieve that seamless, lucrative sale every home seller hopes to have.
Here’s An Alternative That Eliminates All The Missteps, As Well As The Work and Stress of Selling
At Homestead Road, we buy homes in any condition, as-is. You’ll save all the time and money associated with cleaning, repairs, and updates. In addition, there are no showings or open houses. We use a streamlined and transparent process where you’ll be working personally with one of our home sales advisors who live in and know your local community. Best of all, we put your needs first and work on your timeline.