First things first: We would like to apologize for the delay in getting this second half of our list published. No excuses – we are just sorry! Thank you for your patience, and your feedback on the first half. So without further adieu…here are mistakes #6-10:
6. Accepting the Highest Offer Without Carefully Considering Terms
Conditional offers are not in themselves “bad offers,” unless the conditions are designed to allow the buyer to back out without valid reason. An experienced realtor can help weed through clauses and conditions and help you to identify anything that is out of the ordinary.
One of the things that must be considered in this time of shattering price records is that financing often depends on a bank appraisal of the subject property. A buyer may be more than willing to pay the highest price for your house, but unless she has enough of a downpayment to offset any difference between the bank’s assessment of value and the offer price, financing may not come through. In short: The sale won’t close. Before accepting the highest offer, be sure to ask the right questions to avoid this situation.
Depending on your situation, other terms that could require careful consideration include the closing date, any requirement by the buyer that items be repaired or replaced, or demands that the seller “warrant” the condition of unknowns. Always read offers slowly and carefully, and understand the details to prevent unwanted stress on closing day and even beyond.
7. Not Allowing the Property Enough Time on the Market
There are perceived bragging rights to being able to say that a house sold in JUST ONE DAY! The implication is that the place was so great that it just got snapped right up!
The practical problem with accepting an offer too quickly is that other potential buyers who may have offered more money may not have an opportunity to see the property. The goal is not to sell the fastest, but to attract the highest qualified bidder.
This is where marketing strategy becomes important. We have already mentioned that we don’t want a house to stay on the market so long that people start to wonder what’s wrong with it, but we do need to allow sufficient time to expose it to the greatest number of interested buyers. There are various methods that work well for different neighbourhoods and property types. Some sellers will select a date and refuse to consider any offers before that date , while others ask for a longer irrevocable period. (This is the amount of time that the buyer gives to the seller to consider his offer before he must respond or the offer expires.) Discuss with your representative what is working in your local market, and what the buyer pool has come to expect. Then, put your instructions in writing for how to handle any offers that are registered on your property.
8. Not Advertising to Out-of-Town Buyers
No matter where you are, there are investors and future transplant-residents looking at your city or town. These are often folks with the most money to spend on real estate. It would be a mistake to keep your house a secret from this particular buyer group! Make sure to ask about marketing outside your local area to maximize exposure for best results.
In the GTA, for example, many investors and first-time buyers simply cannot afford to purchase in the City of Toronto, and choose to expand their search to outlying areas like Hamilton and Niagara. Marketing to these buyers is crucial to ensure that they are aware of your property.
Depending on the type of home you have and your location, there may be potential for interest from international buyers as well. A comprehensive marketing strategy will ensure that your property is also advertised to foreign buyers who may be looking to invest in your area.
9. Not De-Personalizing Before Listing
Hard as it is to believe, it really is very important to remove items that are too personal, such as family pictures, religious or political symbols, trophies, collections, and mismatched or sentimental items from the spaces in your home before allowing buyers to view it.
Think of your house as a model home. Make it as neutral as possible so that potential buyers can picture themselves in the space with their own belongings and lifestyle. The effect of doing this is to increase appeal to the largest possible pool of buyers. Neglecting this step and hoping that the people viewing your house have the imagination to envision the place differently could result in a missed offer and money lost.
10. Allowing the Process to Become Emotionally Driven
We touched on this in point #2, but just to expand on the importance of treating the whole process as a business transaction: Reacting emotionally to a low offer or a criticism of your home is almost always counter-productive. Negotiations, by their nature, put two parties on opposite sides of the table. Bear in mind that the mere fact that a person is making an offer on your place means they want it. There are many reasons for a low offer that do not indicate a lack of value, and are not in any way a personal attack on you.
Some buyers simply do not have access to the funds to offer more. Your house may be their dream home, and part of the dream may be to convince you to “like them enough” to let them buy it for whatever they can afford. If the offer is truly too low, and they cannot increase it, wish them well and move on to the next.
Other buyers simply love the thrill of working hard to get a “bargain,” and would negotiate anything with anyone, almost for sport. It isn’t personal – it’s personality. Again, either negotiate in good faith, or wish them well and…you know the rest.
A final word:
There will be frustration along the way, and the experience is undeniably stressful. With proper guidance and support, though, a seller’s market is a great way to capitalize on your biggest and most important investment!
**In case you missed the first part of this article, you can read it here.
Next up: Mistakes buyers are making, and how to avoid them.