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7 Home Selling Mistakes and How to Avoid Them

August 3, 2020 | John Egan John Egan

Avoid these common home selling mistakes and sell your house without worry or added expense.

Nearly every home seller feels stressed out by the home-selling process. That’s understandable, since your home is likely the biggest investment you’ll ever make in your life. Therefore, it’s also understandable that you want every part of your home sale to go smoothly.

But no matter how hard we try to prevent them, home selling mistakes are bound to happen. And they can lead to thousands of dollars in lost profit. Fortunately, if you’re aware of these mistakes, you might be able to avoid them. Here are seven common home selling mistakes that you should put on your radar.

Miscalculating the costs of selling

Yes, it costs to sell your home. In fact, those costs can amount to 15% of the sale price. So, if you sell your home for $300,000, the costs subtracted from your proceeds could be $45,000.

What are some of the costs of selling a home? They include:

  • Agent commissions
  • Closing costs
  • Home repairs
  • Home staging

 

All of those can add up fast, although keep in mind that each situation is different. Your selling costs might be above or below the 15% mark.

One way to avoid the mistake of miscalculating the costs of selling your home is to do a net proceeds calculation before you choose how you want to sell your house. There are many popular ways to sell a home, and each comes with different pros and cons. 

Another strategy is to wipe out many of the expenses altogether. For instance, if you turn to an off-market buyer like Sundae, you can free yourself from costs like agent commissions, closing costs, home repairs, and home staging. How? An off-market buyer purchases your home as is without the involvement of a commission-earning agent.

2. Setting a sale price that’s too high or too low

Pricing your home incorrectly might mean you miss out on more money in your pocket or turn off potential buyers. If the price is too low, you could be cheating yourself out of thousands of dollars. If the price is too high, your home could linger on the market for months, forcing you to eventually cut the price.

Relying on an off-market buyer like Sundae takes the guesswork out of setting a price, resulting in fairer compensation for you, the homeowner, and in a fast sale that bypasses the possibility of your home being stuck on the market for months on end.

3. Disregarding needed repairs

You might think that a prospective buyer won’t notice a broken dishwasher or a faulty HVAC system. Think again. If the potential buyer doesn’t notice it, then the home inspector they’ll hire almost certainly will discover it. If the inspector comes across a problem, it could prolong the closing date or even cause the deal to fall apart, costing you time and money.

Now, if you don’t make needed repairs, your home could spend more time on the market than you’d like. And if it’s stuck on the market for too long, your house might attract only cash buyers or developers, both of whom might be seeking to undercut you on price.

But guess what? By selling to an off-market buyer like Sundae, you can skip expensive repairs. How is that possible? The home will be purchased as is; repairs aren’t required. This means you won’t be spending time and money on costly fixes, such as repairing the roof, plumbing, or electrical system. It also means avoiding minor repairs like replacing a faulty faucet or installing a new garage door opener.

If you end up deciding to make repairs and hiring a contractor to do them, be sure to choose one with a good reputation. Check online reviews and Better Business Bureau ratings, ask around for referrals from trusted people and get all of the project details in writing before you sign on the dotted line. Unfortunately, far too many people fall victim to home improvement scams.

4. Failing to prepare your home for sale

Staging and decluttering your home are essential when you put your home on the market. Staging can highlight a home’s strengths and de-emphasize its weaknesses, while decluttering removes the perception that your home hasn’t been maintained well. But they both take time, and staging consumes cash. Staging can easily cost $500 to $1,800 or more. Potential costs of staging include hiring a professional stager, paying for professional cleaning, and renting furniture.

Once your home is staged and decluttered, then you’ve got to keep everything looking perfect until the home is sold. But if you don’t do this in the first place, you could see the dollar amount of purchase offers fall below what you’re expecting. Also, your home might end up spending a lot more time on the market.

Of course, staging and decluttering offer benefits. A spiffy, tidy home can help a potential buyer better visualize what the house would be like with their own belongings and furnishings. The staging and decluttering process can, in some cases, lift the value of the home by 1% to 5% compared with similar homes that haven’t been staged and decluttered. If your house is dated or damaged, though, staging may not be such a smart move. 

5. Being unrealistic about the timetable

A home seller prays that their house will sell quickly. But a speedy sale is often out of reach. In 2019, the typical home spent about 68 days — more than two months — on the market. When you’re an anxious seller, 68 days can seem like an eternity.

Aside from the time element, there’s the issue of holding costs. These are the expenses you’ll pay while you wait for a buyer, such as property taxes, home insurance, maintenance, and utilities.

Another problem: The longer your home sits on the market, the more that real estate agents and homebuyers will think something is wrong with your house. That skepticism can scare off would-be buyers and their agents.

If you sell your home to an off-market buyer like Sundae, the nerve-racking waiting game ends. Your home won’t be on the market at all, paving the way for you to allocate less time to selling and more time to moving.

6. Doing a DIY sale

Taking control of selling your home might sound attractive. But it can lead to an ugly outcome.

For one thing, every task associated with selling your home falls on your shoulders when you undertake an FSBO (for sale by owner). You have no one to lean on when you’re marketing the home on your own. Surprisingly, more than one-third of FSBO sellers don’t actively market their homes at all.

Furthermore, there’s a substantial gap between the sale price of an FSBO property ($200,000) and the sale price for all homes ($275,000). Those numbers are from 2019.

Other drawbacks of an FSBO sale include:

  • Time on market. An FSBO typically takes longer to sell than through more traditional methods.
  • Liability. A buyer might be upset that flooring was characterized as real wood but it turns out to be veneer, and then sue the seller. A seasoned real estate agent or seasoned buyer likely would catch an error like this.
  • Paperwork. The flurry of documents associated with the sale of a house, such as contracts and property disclosures, can be overwhelming. If you’re selling a house on your own, you likely have no one to lean on for help with this paperwork.

7. Choosing the wrong agent

Not everybody is great at doing their job. This includes some real estate agents. So, if you hire an ineffective agent, you could be shortchanging yourself on the sale price or could wind up waiting way too long for your home to be sold.

For instance, an agent, eager to pocket the commission, might be in a rush to sell a home. Here are two scenarios that demonstrate this issue on a house with a $300,000 list price.

Scenario 1

The agent pushes for a lower sale price. Your house winds up selling for $275,000. The agent receives $16,500. You receive $258,000.

Scenario 2

The agent leaves the price at $300,000, and your house attracts a buyer at that amount. The agent receives $18,000. You receive $282,000.

Despite a $25,000 difference in the sale price, the difference for the agent is only $1,500. But for you, the seller, it’s $24,000. While your house might have sold more quickly this way, the agent loses hardly any money while you lose a considerable amount.

By taking the agent out of the equation altogether, you can sidestep the chance that you’ll be stuck with an agent who’s not up to par. One move you can make to go agent-free (and avoid a possible disaster) is to reach out to an off-market buyer like Sundae.

If you do want to hire an agent, here are five helpful hints for finding the best one:

  1. Ask for referrals. These could come from friends, relatives or colleagues — or anyone else whose opinion you trust.
  2. Hop online. Head to the internet to read reviews and other information about agents you’re considering.
  3. Visit an open house. If an agent you’re interested in hiring is hosting an open house, go there and see how they interact with potential buyers and the seller.
  4. Interview prospective agents. Meet with at least three agents to figure out who’s best suited to your needs. This way, you can get a sense of their communication style, approach to marketing, knowledge of your neighborhood and other traits.
  5. Read the fine print. Before you sign a contract with any Realtor, make sure you understand your obligations under the real estate listing agreement.

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