Don’t Make These Common Mistakes After Listing Your Home
We can tell you from sheer experience that there are certain impulses, or impatient reflexes, home sellers exhibit after their listing goes live, and this unfortunately leads to mistakes – such as lowering the price to an unreasonable level and nabbing the first offer as a knee-jerk reaction – that the seller regrets from that moment on.
Half the battle of selling a home is anticipating problems before they come up, but because selling a home is a major milestone in all our lives, it can be incredibly complex when considering all the steps involved: Prepping and listing, making repairs, finding interested buyers, navigating the closing process and, ultimately, moving into a new home. Indeed, the consequences of a mistake can impact finances and, more importantly, a seller’s peace-of-mind; The Malakai Sparks Group buys and sells countless homes per month, providing sellers an alternative to the stress and uncertainty of a traditional sale, so we understand the challenges many of our clients face, especially in slower markets.
Let’s now get into the heart and soul of this blog, which will focus on the three most common mistakes you should avoid when selling a home.
1. Underestimating the Costs of Selling
The total cost to sell a home can amount to much more than the five to six-percent in agent commissions most people expect to pay. When you take into account closing costs, repairs and other concessions to the buyer, the costs of selling can be closer to 10-percent of the sale price. Here’s an example of what we mean: If you move into a new home before selling your old one, you may have to rent a temporary place or pay for both mortgages while carrying other costs (utilities, HOA dues, taxes, storage, etc.).
You can use a home sale calculator to estimate your net proceeds, but it is important to keep in mind the amount of money you’ll pocket after selling costs are accounted for. Being aware of all of this prior to listing can help you choose the best way to sell, and will also give you a better idea of how much you’ll have to spend on your next property.
2. Setting an Unrealistic Price
This is a big one that we hinted at in the beginning of this post. The price you are looking for and what the market will pay can be, like most things in life, two very different numbers – you might have heard the term Fair Market Value in this regard, which refers to how a home is valued when both the buyer and seller possess reasonable knowledge about the property, yet neither is under any pressure to buy or sell.
From a seller’s perspective, this represents the sweet spot between asking too much or asking too little; if you can’t hit the sweet spot, you risk leaving money on the table or having your home stagnate on the market for a longer period of time, which can ultimately come with consequences. Now, you may have a general idea of how much your home could be worth based on homes boasting similar features and square-footage numbers that have sold near you (comparable sales known as “comps” that many real estate agents use to suggest a listing price), but the reality here is that no two comps are the same…so you’d need to account for each difference between home features in order to be accurate.
This process is often referred to as “making adjustments,” and it is incredibly difficult and challenging to take on by yourself. The agents of the Malakai Sparks Group use a robust valuation model to compare individual features for hundreds of pairs of comparable homes, allowing us to make a competitive offer based on market data – as well as input from sellers themselves.
3. Only Considering the Highest Offer
While an exciting proposition to ponder, the highest offer isn’t always the best road to take depending on your needs. What do we mean by that? Well, during many traditional sales, it’s common to have contingencies – conditions that must be satisfied in order for the sale to close. If you are an ethical and moral seller, you may have contingencies that protect the buyer’s interests, such as a financing contingency or an inspection contingency.
We’re mentioning these contingencies because it’s important to be aware of them, mainly due to the way they can impact the timeline of the sale, certainty of the sale and complexity. As an example, you may receive a tempting high offer that is contingent on the buyer selling his or her existing house, so you’d have to consider how the added timing and uncertainty compares to a slightly lower offer without that contingency.
In another scenario, you may experience a buyer who is willing to be more flexible on repairs as compared to another who is offering a higher price but asking for repair credit.
Some additional mistakes to avoid include:
- Ignoring major repairs and making costly renovations
- Not preparing your home for final sale
- Choosing the wrong agent or the wrong way to sell
- Limiting showings
- Not considering your broader financial situation
At the end of the day, the goal is for the home selling process to be as smoothly-running and painless as possible. Thinking about all the things that can go wrong might be overwhelming, but remember that knowledge is power – indeed, now that we have made you aware of the three biggest mistakes to avoid when selling your home, you can be more confident when something doesn’t go as planned.
You can also avoid these mistakes, and the additional ones we mentioned just above, when you don’t have to worry about listing on the open market. Learn more about how selling through The Malakai Sparks Group can help you avoid the stress and uncertainty of the traditional process by calling us today at (714) 655-1627.