Common Costly Mistakes To Avoid When Selling Your Home
1: Not Hiring The Right Person To Sell Your Home
Choosing an agent to sell your home can be a very individual decision. Simply because we all relate to people differently, so the right agent for your personality might not be the right fit for someone else.
Hiring the wrong Realtor should really be the number two reason on the list for home seller mistakes. An incorrect price for a home often goes hand in hand with picking a lousy real estate agent. Pricing a property is a skill and an art. Something that many real estate agents don’t do well. You either have this skill, or you don’t. Sellers and agents need to be honest about the value of the property per the marketplace, as some sellers believed their home is superior to others and some agents will simply agree to get the listing.
Another problem is some real estate agents also offer little in the way of marketing skills. As someone who has been in this business for the past twenty years, I have first-hand experience seeing exceptional agents and those at the bottom of the barrel.
Not all Realtors are suitable to sell your home. Some real estate agents are not very good at what they do. Some agents are more suited to work with buyers.
Others are not experienced in modern marketing technologies. Still, others specialize in areas of real estate that may not match up with your target market.
It is a common problem for home sellers to pick the first agent they come across—especially if they already know someone who has a real estate license. Instead of going for the low-hanging fruit or a friend, try to seek out the right agent to suit your needs.
Interview potential real estate agents, ask plenty of questions, get referrals and take your time. Picking an agent is a critical exercise. At the heart of overall success however are strong working relationships between clients and their agents, as well as other supportive people within the transaction.
In my option, there should be a Litmus Test for Realtors as clearly not all agents are the same. You know the old 80/20 rule, there is a reason that this adage is true in real estate. The reason is simple, top performing agents have their systems in place, comprehensive systems to effectively market and sell real estate, to communicate efficiently, and have the personal relationships with service providers and all back-office support to ensure a smooth transaction.
In total, you should work with an agent who will listen to you and advise accordingly, create the right sales environment for the property, highlighting the right value proposition of your home, someone who is an expert at marketing, knows how to get things accomplished, tackle adversity and bring all parties to the closing table.
2: Over-Pricing Your Home
One of the most important aspects to a successful sale is an effective pricing strategy. Did you now the #1 reason a home does not sell is that the price is wrong. If the pricing of the property is deemed too high in relation to the marketplace, then properties can sit on the market much longer, with a decline of interested buyers and overall marketability. Eventually over-priced properties will need price adjustments as the demand for the property drops quickly after the first few weeks on the market.
Top agents understand how vital it is to price a home accurately from the start. All the marketing in the world won’t sell an overpriced listing. Overpricing a property can cause damaging effects that are hard to recover from especially as time goes on.
It always amazes me that buyers are more apt to overbid on property especially if they believe there is substantial buyer interest and more value compared to other like properties on the market, vs. writing lower on an overpriced listing that has been on the market for more than a few weeks with little buyer competition.
A successful pricing strategy is based on the type of property, the overall condition and its location compared to recently sold and current active listings. Other factors effecting the asking price are the time of year and the overall economic sentiment in the markets.
When consulting with clients, I typically end up discussing 3 different numbers. To begin with we discuss the overall expectations of the seller, what is the value to them and their financial goals. That gives me a better idea of what they are hopeful for and gets us on the same page. The second number is the estimated price range based on recent comparable sales in the area, the data helps guide the value range expected. The third number is the asking price that we place on the property to elicit maximum buyer activity and drive interest form active buyers in the market looking to bid on the property.
3: Neglecting Inspections And Necessary Repairs
Inspections are the ideal way to identify necessary repairs and make sure everything is running optimally before you place the property on the market. We typically encourage a few different types of inspections based on the type of property owned.
Failing to get inspections opens the door to future re-negotiations once you are in-contract with a buyer. The last thing a seller would want is to get into an agreement for the sale of their property only to have that buyer either cancel the escrow or renegotiate down on price based new disclosures made by inspections. It is always good to eliminate the Inspection contingency within a contract. Sometimes, repairs to discovered items may be in order before you place your property on the market.
For instance, old wood structures should always have a pest inspection. This inspection will cover any pest or damage caused by termite or beetle, dry rot, mold or fungus. This inspection will always include a monetary value as to the repairs needed to be complete. Thus it is very important to include a current pest inspection so buyers would know from the start what the potential issues maybe but also we would like to eliminate that contingency within the contract. The last thing we want to do is renegotiate based on an inspection after we are in contract.
A home inspection is also recommended, more so with older buildings. A home inspection is a fact-finding inspection, outlining what the systems are within the building, what type of roof, siding and foundation is in place. This inspection will not have a monetary value to any repairs, it simply states the facts of the property. It is important that buyers are educated with the systems and know exactly what they are buying into, so I also encourage sellers to include a current home inspection.
However, on newer condos I’m not terribly concerned. Typically I find that newer condos are in very good condition and if the seller does not need to provide the inspection, buyer will elect to have it performed, which does mean there is an extra contingency within the contract at times, but most of the time I’m simply correcting small issues that arise out of the inspection. Some corrections maybe GFI plugs that are not functioning properly, laundry pans can be added, and basic cleaning around vents.
In Marin county I would also include the need for a sewer lateral inspection before the property comes to market. This ensures the drainage pipes to the sewer are in good condition, or at least disclosed. Sewer lateral pipes do get damaged from tree roots and can cause backups into the home, so always a very thing to get inspected.
Beyond that, we have the energy and water conservation and fire alarm / carbon monoxide mandatory inspection. These are simple to perform and worst case on older buildings we upgrade toilets, put insulation into the attic spaces, make sure that fire and carbon monoxide detectors are in place.
In the end, professional home inspector can highlight your property’s best assets, identify possible troubled areas and set you apart from other sellers by showing your home is an “open book.”
4: Not Showing Your Home In The Best Light
First impressions do matter, especially in preparing your home for sale. Staging and great photography can bring out your property’s strengths and minimize any weak points it may have. Bring purpose to every room, and help buyers visualize themselves in your space.
Vacant properties do not bring about the normal emotional response people tend to get when entering a nicely appointed living space. We want people to fall in love with the property and proper staging helps convey that in subtle and often time a subconscious manor.
In my experience, many buyers lack the vision to see where the furniture layout will be, how the couch or a bed will fit into a room. Adding furniture helps to minimize the weak points in a room, for instance if the room is too narrow then the right furniture and positioning of it will minimize the impact of the space which would be very noticeable if left empty.
Professional photography is just as critical. Most agents do not have the necessary skills to take professional pictures, photoshop and edit where necessary. Bad images or those taken by an amateur or an agent’s cell phone is simply not advised, it will make buyers click the back button in a flash. Besides that, Realtors should be working to sell the house and not take pictures of it, leave that to the professionals.
Good looking, well balanced professional photography will make your home shine in its most favorable light. There is simply no substitute for quality photography when selling a home. Great images go hand in hand with successful online marketing strategies and good agents recognize that. Remember this critical point – first impressions are everything in real estate sales. Your photography is essentially the first showings on your home.
Even though anybody serious about buying a home is going to schedule a showing, they may never get to that point if the photos online are horrible.
5: Lack Luster Marketing Plan
Professional photography is essential when selling property in competitive markets and at the values we are obtaining for our clients. When selling we want to put the property in the absolute best light possible, showcasing the unique features of the home, and professional photography really is one of the best ways to make this happen. It is the foundation of all effective marketing.
I am sure you would agree that most buyers begin their search for a home with online research. If buyers aren’t enticed by the photos they see of your space, they’ll likely move on. Once the staging is set, the exterior and interior of the property is professionally photographed during the day and early evening, when the lighting is just right. Properties listed with professional photographs attract more buyers and sell faster than those with lower-quality photographs.
Internet marketing is a primary way that agents sell homes in today’s market, or at least reach the largest audience possible.
Any agent worth his or her salt is going to know how to do a decent job of marketing a home online. But there are those agents who do a terrible job of marketing, both online and off. They may not know how, or they may not care to do a good job. I call these type of agents “post and pray” agents. They will put a sign in your yard, post your home in the Multiple Listing Service (MLS) and pray.
In other words, they do the bare minimum to sell your home. In contrast, an exceptional real estate agent will do all the these things to get your home sold.
Relationship Marketing:
Instead of encouraging a one-time sale, we try to foster loyalty by providing unparalleled customer service and staying in touch with our clients via email, social media, and other tactics. Forming long-lasting relationships with clients. We do find that the more people within our sphere, those who receive our message, the higher the likely hood that we will successfully sell property.
Social Media Marketing:
A strong social media strategy has never been more important. Since social media has become such a vital part of daily life, we use it to connect with potential buyers of our properties. By displaying photos, videos, and content about your property on popular platforms like Facebook, Instagram, LinkedIn and YouTube. We can drive traffic to your property website and get buyers excited about seeing it in person. There is an art to social media marketing, it is actually much more complicated than you might thing. Just like the sales funnel you came through to receive this information.
Email Marketing:
We keep in touch with top performing Realtors, former clients and engage with new ones through email marketing. We can highlight your property in one of our email newsletters, which puts your home in front of our clients as well as their extensive networks of high-profile individuals who may be in the market for a new property.
Property Website:
The photographs and floor plan will be used to create a property specific website. A website dedicated to your property can give buyers the opportunity to learn all about your property without getting distracted by other options on the market.
Collateral Marketing Materials:
Our print materials include flyers, brochures, postcards, signage, and e-books. We will use several of these materials to promote your property to the ideal audience.
Promotion:
You can expect us to list your property on Top Agent Network (TAN) prior to either the San Francisco or Marin Country Multiple Listing Services (MLS). We’ll make sure the property details are syndicated to the top real estate portals, create web ad campaigns, retarget active buyers, and push content with our e-blast property statements.
Proactive Approach:
With 40+ years in business, our firm as created an amazing database of former clients and people within our collective sphere of influence. You can depend on us to call people and make the right connections. We make sure to take advantage of all the opportunities that technology offers, but we also have no problem doing things the old-fashioned way.
6: Underestimating The Costs Of Selling
The total costs of selling a property can amount to much more than just the real estate brokerage commissions. When sellers add up the closing costs including all moneys placed into the home for sale, the total costs can be closer to 10% depending on the situation.
A perfect example could be if you move into your new home before selling your old one, you may have to rent a temporary place or pay for two mortgages as well as other carrying costs, such as utilities, HOA dues, taxes, and storage.
The same goes for over-estimating what your home is worth, especially in a changing market. Always try to be conservative in estimating your numbers, leaving you with some padding.
Knowing this information before listing can help you choose the way to sell and give you a better idea of your total budget and where it needs to be allocated. Sellers can easily budget their expenses by using an estimated net proceeds sheet, which will help guide and account for the amount of money you’ll pocket after selling costs.
If you’re planning on selling a property in San Francisco or Marin, it’s important to gain a thorough understanding of the transaction fees that may be involved. These fees include the following.
Inspection Fees:
Inspection fees depend on the size and type of property and whether or not an inspection is necessary.
City Ordinance Reports:
City ordinance report include JCP Geologic and Underground Tank search.
Energy and Water Conservation Inspections:
Mandatory Inspections but typically fairly inexpensive, costs can vary on size of the property and level of works needed.
HOA Transfer Fees:
Homeowners Association or HOA fees vary from building to building and management.
Document Preparation Fees:
Fees to prepare the various documents involved in a real estate transaction can be expected.
Transfer Tax:
Property value determines transfer tax.
San Francisco: Transfer Tax Rates:
- $6.8 / 1000 up to $1M
- $7.5 / 1000 up to $5M
- $22.5/1000 up to $10M
- $27.5 / 1000 up to $25M
Marin: Total City / County Transfer Tax:
- Belvedere $1.10 / thousand
- Corte Madera $1.10 / thousand
- Fairfax $1.10 / thousand
- Larkspur $1.10 / thousand
- Mill Valley $1.10 / thousand
- Novato $1.10 / thousand
- Ross $1.10 / thousand
- San Anselmo $1.10 / thousand
- San Rafael $3.10 / thousand
- Sausalito $1.10 / thousand
- Tiburon $1.10 / thousand
Brokerage Service Fees:
We propose a total commission of 5% of the Selling Price, which will be split 50/50 between listing/selling brokers.
