Sellers are enjoying the upper hand in many housing markets. With home prices soaring to all-time highs and more buyer demand than inventory to go around, sellers can call most of the shots in negotiations.
Don’t be too quick to rest on your laurels, though. Many homebuyers are informed, selective and harder to impress than ever before. Here are the worst mistakes real estate agents say sellers make when listing their homes — and what you should do instead.
1. Overpricing your home
You might think your house is the best on the block and should command a high price. But unless local comparable sales and market data support your theory, your overpriced home might become a pariah with buyers.
“Overpricing your home puts an emotional value on the property versus what the market will support,” says Ashley Smith, designated supervisor with Las Colinas Realty Associates in Las Colinas, Texas. Listing agents should provide you with a comparative market analysis report showing what listings in your area (based on similar age, square footage, amenities and rooms) have sold for in recent months — and what’s currently on the market. You might want to price a little above comparable houses, but not a lot above.
2. Thinking selling your home solo will be easy
You want to get the most return on your investment when you sell a home. Selling your home sans an agent to avoid commission fees may work against you for several reasons. When you list your own home for sale, it’s known as a For Sale By Owner listing, or FSBO. Without the help of an agent or brokerage service that can put your property on the Multiple Listing Service, or MLS, where most homes are promoted to get the best offers, you have to market it yourself. And that can be harder than you think.
Another FSBO hurdle: real estate paperwork. It can be complex, and you risk making serious mistakes if you don’t know what you’re doing. And if you overprice your home or don’t market it in the right places, it may sit on the market for a long time.
“The longer it takes to sell [your home], the less it sells for,” says Adam D’Annunzio with Keller Williams Realty in Ocean City, New Jersey.
3. Hiring the wrong agent
Don’t choose a real estate agent without getting referrals from family and friends, and doing some research. Be wary of an agent who agrees to list at the price you want if the market doesn’t support it. That could be a major disservice, D’Annunzio says.
You might see discount brokerages in your area that agree to list your home online for a low, flat fee, but these companies may not provide much service beyond that task. Without an experienced and competent agent to market your home aggressively, you may net less money than if you had paid an agent’s standard commission, says Kevin Deselms with RE/MAX Alliance in Golden, Colorado.
“The MLS is littered with price reductions and expired listings by discount brokers who didn’t market the homes any better than a FSBO could,” Deselms says. “Those brokers weren’t communicative with buyers’ agents, were unavailable, didn’t get the price right to begin with, and forced repeated reductions. If the seller walks away, those brokers don’t really mind because they’re salaried.”
4. Failing to disclose major issues
Many states require sellers to disclose, in writing, known issues with their property — even when selling it “as-is.” Sellers who don’t include these issues on the seller disclosure form will lose out, says Jill Hussar, broker/owner of Hussar Real Estate in Lakewood Ranch, Florida.
“These facts are always uncovered at some point in the process or, sometimes, after closing,” Hussar says. “A seller will be in hot water when the buyer learns of the fact and that it was not properly disclosed.”
Consider hiring a home inspector to identify any red flags so you can decide whether to fix major issues before listing or reflect the costs of remediation in your asking price. Knowing what to expect can help you avoid drawn-out haggling and closing delays.
5. Listing your home before it’s ready
Nothing makes buyers cringe like cluttered, outdated, smelly or dirty homes. Declutter and remove personal mementos to keep buyers’ focus in the right place, says James Harris of luxury real estate firm, The Agency, in Los Angeles. “Remove any items that can take away from the feeling of the home and [distract buyers from] envisioning their future life in it.”
Keeping your home immaculately clean for listing photos and showings is a given. Consider upping the ante even more with home staging. Hiring a professional home stager costs an average of $833, and can range from as little as $100 to as much as $2,500, according to HomeAdvisor, a home improvement matching service.
If you don’t want to drop that kind of cash, a few small tweaks will do the trick, says Alexander Boriskin of Douglas Elliman Real Estate in New York City. “Moving furniture out and painting a few walls then staging with furniture that highlights the home can get a deal done quicker and for more money,” Boriskin says. Ask your agent if professional photography is part of their service, too. It can help set your home apart online.
6. Not updating your home
You don’t have to spend a fortune to make your home shine. Some low-cost updates include: repainting with neutral colors, replacing light fixtures, changing out cabinet hardware, ditching outdated decor, cleaning the carpet or replacing it, and boosting curb appeal with fresh landscaping.
Not sure where to start? Kris Lindahl, broker/owner of Kris Lindahl Real Estate in Blaine, Minnesota, recommends that sellers invite a real estate agent to look at their home one year (or more) before listing it. “An experienced Realtor can give advice on what should be fixed or updated,” Lindahl says. Having enough lead time ensures you don’t misspend your money on the wrong projects and you can better budget for upgrades.
“Homeowners usually guess about which projects to tackle,” Lindahl adds. “Odds are that buyers will have different tastes, so getting an expert in to give advice on what sells is crucial.”
7. Being too hasty with offers
Many sellers are flooded with multiple offers these days. The instinct might be to choose the highest offer, but that’s not always the best approach. Going straight for the highest dollar amount ignores key factors, such as the property appraising at that value and the strength of the buyer’s financials, cautions Deselms from Colorado.
“The top dollar amount is not always the best offer to accept,” he points out. “That can be a hard thing for many sellers to understand, and they need a good Realtor to explain it to them.”
Turning down the first offer you receive by choosing not to negotiate, especially if the offer is reasonable, means you could miss out on a successful deal, says Hussar, the Florida brokerage owner. Take time to carefully consider all offers, and look at the buyer’s financial picture and timeline before making a final decision. Don’t discount keeping one or two backup offers in case the buyer falls through.