It’s hard to imagine losing as a seller in this crazy-hot Southern Ontario market, right? Unless there is something inherently undesirable about a property; perhaps it’s been a grow-op or a murder scene…. you would be [mostly] right to state that “everything sells.”
Just selling is not the ultimate goal, though. True success lies in knowing that no money was left on the table. Real estate doesn’t actually just ‘sell itself.’ There is a place for planning, strategy, and marketing in ensuring the highest selling price and most favourable terms.
Listed below, in no particular order, is part I of our list of the most common mistakes that a seller could make that prevent him or her from fully realizing the financial gain they should receive upon sale of their home or investment property:
This is, by far, the most easily avoidable mistake in a hot seller’s market. There is a fundamental principle that must not be forgotten: Buyers determine the value of a property.
The quickest way to shut down buyer demand is to overprice a house. Please understand that we are not suggesting that listing way below market value is the way to drive traffic or demand. (That is a game that creates unrealistic expectation within a buyer pool that may not be qualified to pay its real value. It’s kind of mean.) However, just because the market is moving at dizzying speeds doesn’t mean that you can just attach whatever price tag you want to your house and it will fly off the shelf. Buyers still want to feel that they are getting value for their money.
The danger in overpricing a property, even for a short period of time, is actually magnified in a heavily slanted market. When consumers become accustomed to seeing houses sold in less than a week, they begin to question what’s wrong with a property that sits on the market for 14 days while sellers try out a risky-high list price. Many will assume that it didn’t sell because there was some serious deficiency, and attach an imaginary stigma to the property. You may end up getting less than you would have if the original list price had been more accurate.
Do the research. Find out all you can about the latest sales within an appropriate radius. Look at the marketing materials that accompanied the listings for those properties. Go out and physically see other properties currently on the market in your area and price range.(Your realtor will be able to provide this information and book showings for you.) Be honest with yourself when comparing what you are selling to previous sales. You will undoubtedly offer some features that they did not, and vice versa. Adjust the asking price accordingly. Then, let the buyers drive the price up, if the market will support an increase in value at the time of your sale.
This dangerous mindset can easily take root when a potential seller sees what else is out there and mentally compares his home to other ones that sold “way over asking.” If you find yourself thinking that your house is the best one in the area or that buyers should be thankful that you are allowing them the opportunity to bid on it…. it is time to take a step back. Try to remove your personal attachment to your own property from the business of selling your real estate.
Even in a seller’s market, multiple strong offers (quality of offers matters as much as quantity of offers) are a result of strategic marketing. Don’t give in to the thought that you can skip the preparation phase, including appropriate staging, if you want to capitalize on your home’s potential on the open market. (There is a mathematical formula to guide you in figuring out how much to spend preparing for your sale for best results. )
Remember that each neighbourhood has a pool of buyers with a list of demands and requirements. Demographics, time of year, and price point are some determining factors involved in your success. Ask a local real estate professional for advice on how to make sure to present and offer your home for sale – it will be worth the extra time and attention to detail!
- Neglecting to hire a professional photographer.
Related to overconfidence, but important enough to get its own spot on the list.
Estimates say that 80% of consumers are shopping online for a house. This is where they are first introduced to the property you are offering for sale. Even realtors have been known to skip a listing that has no pictures or, almost as bad, poor quality photos.
Ask your sales representative about the images they will be using to market your home, not only on MLS, but elsewhere online. Professional photography is a very small expense for the benefit of creating a positive and professional first impression.
- Failing to read and understand forms and contracts.
You may be among the majority who would rather slit your own wrists with a dull blade than read every dry word of your listing agreement and other documents. We get it. They are B-O-R-I-N-G. Mind numbing. Tedious, repetitive, monotonous. Read and understand them anyway!
Your home is likely the biggest investment you will ever make and/or cash out of. Take the time to ask questions about the legalese you are autographing. If you ever sit across from a realtor who resists explaining the forms or who insists that you sign them without a thorough explanation, consider interviewing other professionals. This step should be non-negotiable, since you could find yourself agreeing to things you never meant to do.
- Not asking enough questions.
There have been cases of misunderstandings that could have been avoided with a simple, honest, frank conversation between realtor and client. Of course, the onus rests on the sales representative to be forthcoming and offer as much information and detail about the services they offer as possible. In the course of human interactions, though, there is always the potential for incorrect assumptions and crossed wires. Especially can this be true for a first time seller who is working with a very experienced agent.
For example, if your listing agent states that they will cut their commission if you choose to accept an offer from a buyer who works through them (they double-end the sale), ask them to clarify: Does this deal apply to any member of their team as well? Does the commission cut still apply if you receive multiple offers?
Or if your listing agent tells you that he or she will have the house staged, cleaned or repaired in any way, ask them directly if they are paying for the services or if you will be expected to foot the bill. They may simply be offering you access to their network of loyal and trustworthy suppliers – not promising to pay for the work to be done.
We heard of one client who was convinced that it was the realtor’s responsibility to notify all the utility companies and the tax office of their move and change of address. (It actually is not something most realtors do, in case the question arises…)
When in doubt, ask.
Click here for part II of this list…and more tips to get the most for your home!