How to avoid five common mistakes often made by home sellers in real estate transactions.
By Megan Kramer
The home-selling process is a complex one, and can be full of opportunities for sellers to come out on top—or for buyers to score the upper hand. While REALTORS® can’t predict everything that could botch a sale, they can study up on common home-selling mistakes that end up costing sellers both time and money. This will not only help agents and their clients avoid financial pitfalls, but will also help agents work with stubborn or first-time clients and boost seller confidence.
Inspect Me 2 Times
Making repairs before selling a home is an important part of the process. Some repairs are obvious—new carpets or flooring, fresh paint—but some problems may be hidden to even the owners. A pre-inspection is a good way to detect possible hazards and give sellers confidence when going into a sale.
“The National Association of REALTORS® has found that the most stressful part of a sale for a seller is the unknown period of the inspections,” says Amy Broghamer, CRS, of the Amy B. Sells Team with Keller Williams in Cincinnati, Ohio. “Doing a pre-inspection is a great way to alleviate that stress. I tell them that another inspector—if the buyer chooses that route—may find something else; that’s their job. However, it won’t be a huge item or a big surprise.”
Broghamer says she requires a pre-inspection in certain situations—if the home is old or has been “flipped,” or if the clients are tight on funds or equity—in order to make the sale and purchase work.
Mistake 1: Overlooking Repairs
Whether large or small, making repairs before selling is a must, or a seller is guaranteed to lose money. “I work to counsel my clients on what a buyer is going to ask for, before they ask. Things that are safety issues or big-ticket items are always a focus,” says Amy Broghamer, CRS, of the Amy B. Sells Team with Keller Williams in Cincinnati, Ohio. These include electrical issues, water damage, rotten or chipped flooring, or a leaky roof. Broghamer recommends sellers get a pre-inspection to uncover necessary repairs.
“Sometimes there is a big surprise for the seller. In that case, there is plenty of time to investigate and get competitive bids to correct the issue,” Broghamer continues. “Say it’s a roof that needs to be replaced. Since the seller knows before they list, they can call a few roofers and get some bids.” Once the roof is repaired, Broghamer says, sellers can list the home “with a new roof. Had we not done that, we could have gone under contract with a buyer and they could have been spooked when they discovered the roof needed repair,” she adds.
When buyers get wind of necessary repairs, one of two things usually happen: they lower their offer or they back out of the deal. “I ask [sellers] if they would pay $5,000 for someone to paint the trim in their home. Of course they say “no.” I then tell them folks will deduct a crazy amount of money for even minor things that you can do over a weekend,” says Kim Laforet, CRS, GRI, Associate Broker with Coldwell Banker Hubbell BriarWood in Lansing, Michigan.
“The buyers also could simply walk away from the sale, causing the seller to have to put their home back on the market,” Broghamer adds. “Now there is more time being lost in pending status, and the next buyer might not make the same offer, so the seller may have lost money by not fixing the issue.”
Mistake 2: Overpricing the Home
Buyers are going to compare a sale price to other homes in the area, so a home should be priced competitively. REALTORS® can provide a comparative market analysis to help establish a competitive price. Experienced agents also have their own system for helping sellers price their homes.
“When I list a home, I tell them I have used a tactic on pricing homes that has worked every time—to get more, price it for less,” Laforet says. “Sometimes they agree and sometimes they don’t, but every time I have a seller that agrees, the home sells for the top value I estimated it would sell for based on the comps—or more.”
A competitively priced home creates a buzz among multiple buyers, Laforet explains, and so multiple offers come in at full or over full price.
Mistake 3: Over-sharing with Buyers
Another costly mistake is allowing sellers to have too much communication with potential buyers, says Nancy Braam, CRS, with RE/MAX Whatcom County Inc. in Bellingham, Washington. In a blog titled “Why Home Sellers Should Never Talk to Buyers,” Braam explains that sellers don’t have the negotiating skills that REALTORS® have, or if they do, they are too emotionally invested in the property and give away too much information. Braam advises that sellers make themselves scarce during showings, or, if they must be around, to think carefully about what they disclose.
“Think of it this way: anything you disclose about your motivation is asking the buyer to offer less. In fact, pretty much any time you open your mouth you are letting out clues that you don’t even hear; clues that tell the buyer more than they should know about how to get the upper hand in negotiations,” Braam writes. “Staying out of the way is the best way to preserve what negotiation advantage you have.”
Mistake 4: Poor Staging
Both a cluttered home and an empty home will be unappealing to buyers, so having proper staging and curb appeal is important. “I have found that my sellers who do their homework upfront always come out ahead,” says Danni Springfield, CRS, ABR, Lead Agent with The Springfield Group of Keller Williams Legacy in San Antonio, Texas. “Finishing off minor handyman items, like replacing rotten trim and adding a fresh coat of paint, go a long way toward a quick sale at the highest price possible. Then we bring in professional staging and photography. My stagers ‘edit’ and remove items that they feel are unnecessary and many times they bring in pieces or accents to complete the look.”
Staging might sound like a lot of work or off-putting to sellers who are emotionally attached to their current layout, but REALTORS® should remind them that a little primping can go a long way. “I show pictures and tell success stories of prior listings that took my advice, did a minor transformation and had an incredible outcome,” Springfield says. “My stagers are also excellent at talking about how important it is to appeal to the widest range of buyers possible.”
Proper photography is also a must, as a majority of buyers are shopping for homes online these days.
Mistake 5: The Wrong Attitude
This includes both patience and setting expectations too high. Not every prospective buyer will submit a bid—some are just window shopping or are interested in a nearby home. Reminding clients that browsers are part of the home-selling process will help keep them from being disappointed.
It’s also important to remind sellers that once they do receive an offer, they should take it seriously. “I tell them when we list the house that they should never think of it as a first offer, but as potentially the only offer. That way we treat each offer with the respect it deserves,” says Laforet.
Learn more about the importance of sellers making needed renovations before listing.
