- advertisement -

7 steps to sabotage the sale of your home

SellingJust as there is a soul mate for everyone, there is a buyer for every home.

But there's a right way and a wrong way to sell your home and many sellers, curiously, like to try the wrong way first. In fact, some sellers seem to do everything they can to sabotage a sale.

If that's your goal, here's seven great ways to mess up the sale of a perfectly good home:

1. Overprice it.
Refuse to price the home at market value. Convince yourself your home is "the best in the neighborhood," and should sell for a higher price than surrounding homes. And build-in a little wiggle room so the buyer thinks he's getting a deal.

Jim Crawford at ReMax Greater Atlanta in Roswell, Ga., says, "Sellers get their home wrapped up in their heart. Their emotions cloud their judgment to the point that they always think their house is worth more than the house next door."

 

- advertisement -

Overpricing almost guarantees months on the market before you realize the listing has become "stale" and you are forced to drop the price. By that time prospective buyers begin suspecting there's something wrong with it, something other buyers have seen but that you're hiding.

Hoping to find an uninformed buyer is just wishful thinking. Most buyers look at two dozen or more homes before they make an offer. If they were ignorant when they began shopping, they they got educated looking at that many homes.

The right way: Price your home at or near appraised value and share that appraisal with buyers. Let them know you are not going to negotiate. Chances are you will get a full price offer because you've addressed the buyer's No. 1 concern: "Am I overpaying for this house?" Contrary to popular belief, home buyers aren't looking to "steal" your house. And, you can't be forced to sell for less than you want. Full price offers for properly priced homes are more common than you'd think.

2. Fall in love with your home.
"How dare they come in with an offer like that?" listing agents often hear from sellers. "More than 10 per cent under my asking price! Don't they realize I just paid over $40 a square yard for that beautiful mauve carpet? If they don't like my house the way it is, let them go somewhere else!"

"An offer means someone is interested in your property," says Carmen Basilovecchio, of ReMax Southeast in Boynton Beach, Fla. "That's far more important than the amount offered. The fact they're interested is more than half the battle. Now all you have to do is negotiate price and terms."

To you it's a home, but to prospective buyers it's just a house. Most buyers consider square footage a more reliable indicator of value than the fact that the master bathroom has marble tiles imported from Italy or that you had a local artist paint a mural on the living room wall.

Cindy Camp, who sells homes in western Michigan for Oakes Realty, says, "Many houses in this area have those dark, old-fashioned basements that make them hard to sell. Often, sellers are so proud of their homes that it's tough to convince them to reduce their price. They are just in love with their home and they have a tough time seeing it through the buyer's eyes."

The right way: Tuck away your foolish pride and negotiate. If you love your home that much why are you moving?

3. Ignore (or hide) your home's true condition
Having an open house this weekend? Quick -- paint over that water stain on the bathroom ceiling, cover that soft spot in the roof with a few new roof shingles, and rearrange the furniture to hide those carpet stains in the living room.

Crawford, the Atlanta Realtor, says many problems are rooted in denial. "The seller can't look at his home objectively. They have a hard time seeing it as a buyer would."

The right way: You truly don't get a second chance to make a good first impression. Most home buyers literally decide within seconds if they are interested in a property. Have a professional home inspection done before putting the house on the market. This allows you to address any problem areas, play up the good points, and look a buyer in the eye when you're talking about the condition of the home.

Spending a few hundred or even a few thousand dollars getting a home in tiptop condition not only makes it show and sell better, but you are likely to get much of the fix-up costs back in a higher sales price.

Crawford adds, "Sellers need to view their house as a buyer and ask themselves if they would buy that same house again. The reason they would not points to the problem that needs to be fixed, whether it's painting or alleviating smells or fixing up the yard."

Taking the easy way out -- deducting repair funds from the seller at closing -- only invites disaster. Buyers always overestimate the costs either because of a lack of knowledge or a desire to use them as a negotiating strategy. And keep in mind that once it gets this far, every repair -- even minor ones -- are going to be done by licensed contractors at their prices, not the actual expense you would have faced if you had fixed or painted it yourself. A fresh coat of paint indoors and out, cleaned windows, a spotless bathroom and kitchen, organized and uncluttered closets, fresh flowers, nice smells, and freshened up landscaping will do wonders.

4. Overvalue your sweat equity
Every potential buyer who walks through the door gets the full run-down: Driveway patched and re-sealed every spring; greenest lawn in the neighborhood; homemade built in cabinets in den; custom, electronic closet organizer in master bedroom. Your list of extras and improvements goes on, seemingly, forever. But, who cares?

Many sellers oversell the features of a home and overestimate the value of the work they have done on it. They think they should price their home $20,000 higher than a comparable home because they have put $20,000 worth of extras into the home. But buyers are brutal and it is rare that you get a dollar-for-dollar return on your investment.

The right way: Remember, those things were for you. You enjoyed them. Be happy. But don't expect the buyer to pay for them. Those are your extras, not the buyer's, and they simply won't give you credit for them.

5. Disregard the buyers' perspective
Refuse to work with the buyer's individual personal or financial situation when negotiating a contract. For example, if the buyer will have trouble coming up with the closing costs, tell his agent, "If he can't afford to buy my house, let him go elsewhere." Or, "If they can't wait five months until after the holidays to close, the deal's off."

The right way: If you're getting a good price, be flexible when working out the terms. The No. 1 barrier to homeownership is lack of down payment. Many sellers don't realize that buyers need to come up with not only the 3 to 20 percent down payment, but also have to pay another 3 percent in closing costs, escrows, prepaid taxes and insurance. Offering to pay part or all of the closing costs is a lot more helpful to buyers than lowering the price. Bargain on price or terms, but not both.

6. Hide your neighborhood
Ok, so the neighborhood is falling down around you. So what? You've not only kept your home up, but you added a four-car garage, an Olympic-sized pool and gold-plated your two-story fountain. All the other homes advertised in the real estate magazines with your features are going for top dollar -- hold out for your price.

The right way: Keep in mind the oldest adage in the real estate game: Location, location, location. Many sellers fail to take into account the neighborhood. A $100,000 home in one neighborhood will sell for $80,000 to $130,000 in other neighborhoods. Most buyers prefer a diamond surrounded by other diamonds, not a diamond in the rough. If you are selling a diamond in the rough, be prepared to accept less. Just as you benefit from a good neighborhood, so you will be hurt by a marginal neighborhood.

7. Deal with unqualified buyers
Ed and Edna have just toured your FSBO open house and whip out a contract for you to sign -- at full price! What idiot wouldn't sign that? Answer -- the one who wants a closing rather than a worthless piece of paper.

So many sellers fall into this trap -- especially those not working with an agent. Accepting a contract from any prospective buyer, then finding out a month later they can't qualify for financing is an easily avoidable mistake.

The right way: Insist that prospective buyers are pre-qualified before you accept a contract and earnest money from them. Mortgage brokers will do this over the phone for free, in less than 10 minutes. Next, insist that they make formal mortgage loan application within a few days of contract acceptance. Even then, continue to market your home, accepting backup offers and keeping names and numbers of prospective buyers in case the deal falls through.

Christopher Cruise is a real estate instructor and freelance writer in Silver Spring, Md.

-- Posted: July 1, 2003

 

Looking for more stories like this? We'll send them directly to you!
Bankrate.com's corrections policy
Print  
 

National Mortgage Rates
OVERNIGHT AVERAGES
Rates may include points.
30 yr fixed mtg 3.95%
15 yr fixed mtg 3.05%
5/1 jumbo ARM 3.38%



RELATED CALCULATORS
  Calculate your monthly payment  
  How much house can you afford?  
  Fixed or adjustable rate: Which is right for you?  
VIEW ALL 

BASICS SERIES
Mortgage Basics
Follow the process from house hunting
to closing.
How much can I afford?
How much is my payment?
What documents do I need?
What is a home inspection?
What is the closing?
Can I remove PMI?

MORE ON BANKRATE
Mortgage rates in your area  
Graph rate trends  
Credit scoring  
Mortgage basics


- advertisement -



 
- advertisement -