5 Blunders Today’s Home Sellers Must Avoid
Way, way back in the early 2000s when people still lived in caves, all a real estate agent had to do to sell your home was ride up to your house, get off of his or her high horse, pound a ‘for sale’ sign into your front lawn, and take in 3-5 offers before he or she got back onto his or her high horse and trotted off, smiling all the way to the bank.
Okay, it wasn’t that easy. But it’s not as easy selling a house today as it was back then. The downturn in the economy, higher unemployment rates, reductions in work hours, uncertainty in the economy, house values declining at double digit rates, and underwater homeowners all have made it a tad bit more difficult to sell a home today. Okay, a lot more. However, after 5 years of losses in house values, the real estate market in Southeastern Massachusetts appears to have finally bottomed out and is now on the mend.
Home sales across Massachusetts are up today, and so are prices. And, in some areas, It has become a seller’s market. The best homes are selling quickly these days, but it's still not the real estate market of yesteryear. Many homeowners are still sitting on the sidelines in hopes the market will continue to improve. Meanwhile, mortgage interest rates are rising. In addition, homebuyers are being careful about the housing decisions they make, and are cautious about deciding which house they want buy.
Even though more homes are selling today than last year, sellers must still be willing to do what it takes to get their homes sold. It's now more important than ever to properly prepare your home for sale, and to work with prospective buyers in order to get your home sold.
Here are five blunders that home sellers must avoid when putting their homes on the market today:
Overpricing your house for the market
If your asking price is too high, virtually no one is going to pick up the phone and ask to see your home. You run the risk of having your home sitting on the market a long time with no takers. You could also wind up reducing the asking price several times ─ and potentially far below your home’s true market value ─ before you even get an offer.
Both buyers and their agents know how long your house has been on the market. And the longer it sits, the more likely they will think there is something seriously wrong with it. So do yourself a favor. Price your home correctly for the market in the beginning.
To help you come up with a fair asking price, you should find out what homes that are similar to yours have sold for in your area in recent months. And you should find out how like homes that are currently on the market in your town as well as in neighboring towns compare to yours not only in price, but in size, type, style, and amenities as well. That’s your real competition. You should also have your agent prepare a comparative market analysis (CMA) of recently sold homes as well as current listings.
If you properly position your home for the market, then you probably won’t be sitting and waiting and wondering and agonizing over when you’re going to get that first offer. You also stand a pretty good chance at selling your home at a price that will be higher than if you'd priced it too high and had to reduce it several times.
Not making your home showroom ready
Is the paint on the outside trim worn away or peeling? Do you have a couple of windows that are broken or won’t open? Are the tiles on the kitchen floor chipped and cracked? Is the carpet in the family room worn and dated? Then get them fixed or replaced! Your home should be showroom ready before you put it on the market.
Have you ever noticed the used cars on a new car dealer’s lot? Dealers are getting top dollar for those used cars. Why? Because they gave the cars a 130+ point safety inspection, repaired or replaced malfunctioning or broken items, and fixed the dents and repainted the scratches. They’re also scrubbed clean and polished inside and out, they are in like-new and showroom condition, and they are certified. They even provide you a CarFax report so you can see whether or not the car was involved in any accidents, was used for commercial purposes, our drowned in the floods of the last hurricane.
That’s what buyers want in a home today. They want a home that’s in move-in condition. And they would appreciate a home warranty as well. Buyers don’t have the time, money or inclination to deal with the items that are in need of repair after they move in. So, they’re going to look over your home with a fine-tooth comb, and they’re going to find those faults. And when they do, one of three things will happen: 1) they will walk away and not make an offer; or 2) they will make a lowball offer; or 3) they will ask for credits after they’ve completed the home inspection.
Invest the time and money needed to get the repairs done before you put your home on the market. Offer to pay for a 1 year warranty on the major appliances as well as on the home’s heating and cooling systems. If you do that, then potential buyers will have peace of mind knowing that potentially major problems will be covered. And, you’re more likely to sell your home quicker and at a price higher than you thought possible. Not only that, you’ll also save yourself the headache of dealing with lowball offers filled with credits and seller concessions.
Making your home difficult to show
Today, more than 90% of homebuyers are shopping online for homes for sale. And many are getting instantly notified when new listings that meet their criteria come on the market. So, you should plan on your home being ready for showtime when you sign the listing agreement. If your home is priced right for the market, then your agent could literally get requests from buyers and their agents who want to see your home within hours of it going up for sale.
If you’re serious about selling your home, then you must make it easy for potential homebuyers to see it. If you or your agent turn away prospective buyers or otherwise make it difficult for them to see your home, then you’re sending the wrong message. You’re telling buyers and their agents that you're not really serious about selling your home, and they’ll move on to the next available listing.
Buyers want to see your home on their schedule, not on yours or your agent’s. Your home should be on a lock box and ready for showings at all reasonable hours during the weekday and on weekends. If you insist that your listing agent be present for all showings, then make sure that she has other agents available to cover for her in case she’s not available when a potential buyer wants to see your home. And make sure they answer their phone!
Being the star attraction during showings
How you feel about those salespeople who follow you around the store while you’re trying to shop? Do they irritate you? Make you feel uncomfortable? That's how potential home buyers will feel about you if you’re the star attraction during showings and open houses.
The worst thing you can do is be there while prospective buyers and their agents tour your home. No one wants to feel crowded, and potential buyers will feel uncomfortable with your presence. In addition, buyers and their agents won’t be able to talk to each other openly and honestly.
You also don’t want potential buyers continuously thinking about you while they tour your home. If you’re there as people walk through your home, you’re actually convincing them that your home is not for them. Trust that your agent has done his or her work properly, and that the buyer’s agent is well prepared to show your home.
The best thing you can do is let the potential buyers feel like they already live there. So do yourself a favor and get out of the house when prospective buyers drop by. They will be more relaxed while they tour your house, and they will be taken in by all that your house has to offer.
Blowing off that first offer
Real estate agents will tell you that they have seen this happen all too often: The first offer is often the best offer. The prospective buyer who makes the first offer on your home is highly motivated and is ready to make a deal. However, that first offer might be lower than you'd like. Instead of feeling insulted about it, you must step up to the plate and be willing to negotiate ─ no matter how low that offer might be.
If you blow off that lowball offer, you run the risk of having your home sit on the market for a long period of time. By the time you get the next offer ─ which could be 4-5 months later ─ you could end up taking as much as 5-10 percent less than what the first offer would have brought you.
When you get that first offer, be willing to make a deal, even if it’s lower than what you anticipated. You never know where the buyer is coming from. For example, that buyer may have been instructed by his uncle to make a low offer to see what the sellers will take. But, he might be willing to make a much higher price offer ─ if you’re willing to negotiate.
So don’t discount that low initial offer. Instead of feeling righteous indignation, you can simply counter it by saying “My counter offer is my asking price.” That shows you’re willing to negotiate, but the buyer must be more realistic in their offer. I’ve seen many buyers come up sharply in their offering price after that.
If you've been sitting on the sidelines waiting for the most opportune time to sell your home, this could be it. But it won’t be as easy as driving a ‘for sale’ sign into your front lawn.
If you're serious about selling your home, then hire a good real estate agent to represent you. Pay heed to your agent’s recommendations as well as these common blunders that many sellers make, and put your home in the best possible light. You just might get an offer you can’t refuse!
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East Bridgewater, MA 02333
Lew Corcoran, ASP®, IAHSP, IAHSP-CB