In my experience the following are the five (5) most costly mistakes sellers make when selling their home.
...Don't Let These Happen to You!
Sellers think that if they price their home high they are most likely "get more money". This is much further from the truth and reality and I will tell you why.
For example, when you go to your local bakery and let's say fresh bread from the oven is on average $2.00, one day you walk into your bakery and they say it's $4.00! Would most people buy it? I don't think so. Would you? Your probably wouldn't right?
The next day, how much is that same bread worth to you in terms of value? $1.50? $1.00? $0.50? How about the next day? $0.25? $0.10?
I love using this analogy because it works the same way in real estate (without the bread). When a seller overprices their home overtime the value of their home drops because nobody wants to pay more than the market value.
Therefore, the property sits on the market, days increase, buyers are wondering and sometimes cautious too, and ask the following questions:
a. Why isn't the property selling?
b. What's wrong with the house?
c. Let's offer them a "low-ball" offer and see if the seller will take it!
Consequences of Overpricing Story (don't do this at home)
I remember in February 2009 a good friend of mine wanted to list his house for sale. He wanted to save the commission and put it at a high asking price.
My suggestion was to list it at $699,000. He went ahead on his own (without a Realtor) and listed it for $749,000.
About four months later he reduced it down to $729,000, then after two months he reduced it down to $699,000. He even went and got his real estate licence!
Finally! After seven months of stress he sold it for $690,000! Should have he listed it at $699,000, he may have got the asking price, and perhaps even multiple offers! NETTING him at least $10,000 - $15,000 more!
In the end, what did it cost him? $35,789 in mortgage payments!!! This is without real estate fee's, heat, hydro, water, etc. Sometimes we learn from our expensive mistakes in life!
When he sold, he looks over at me and said "I will never do that again! Next time I will listen to you John and list the home with you! Sorry but I was being stubborn."
ADVICE: Set your price at fair market value. You will attract more buyers and potentially more offers. More importantly you will NET more money and use it towards something that is of interest to you. Either to put your kids in a better school, buy the bigger house, keep the money in your bank account, or go on vacation! (my favourite). Wouldn't you want that?
2. Selecting the Realtor That Suggests the Higher List Price
Some agents, not all, rely on giving a really high list price to lure in the homeowner to list their home for sale with them. Overtime, they work on the seller to lower the price. Sometimes, it may be once, twice or three times. This mistake could cost you thousands of dollars and more importantly your peace of mind!
ADVICE: Select a competent, professional real estate professional that demonstrates confidence, knowledge of the area, and provides you with the comparable properties that have sold in your neighbourhood.
3. Lowest Commission
There are homeowners out there that seek to hire a Realtor that offers the lowest commission. On top of that, they sometimes ask, can you do it for less? Some agents do! They try to save that 0.5 - 1%.
Here are some things to think about as a homeowner:
a. If an agent is weak at protecting his/her fee, how confident are you in hiring them to protect the sale price of your home?
b. Is lowering or offering you a lower fee their competitive advantage?
c. Are they taking many listings at a lower or reduced fee and not properly servicing them? Be careful here. You don't want to select a Realtor who is "just taking a listing" and not giving you 100% commitment and dedication on one of the most important decision you will ever make.
ADVICE: Select a Realtor with a fair fee but DO NOT base your final decision on this! First select your Realtor based on competence, your comfort level with them, knowledge, expertise (I am a residential specialist) and one who has a plan from start to finish. Along with a proven and successfull track record. You will feel it in your heart as to which one is the right one for you!
As a potential seller make sure you clean and showcase your home. I offer FREE staging consultations to my clients along with professional photography (I bring in a photographer).
Experience has shown that properties that are clean, well maintained and are staged attract more buyers and potentially more offers for a higher price.
ADVICE: Clean, maintain and stage your property prior to marketing it.
5. Hiring a Part-Time Realtor
Let's say you, or someone you deeply love is having an important surgery, would you hire a doctor who could do it for the cheapest price or that work's part time in the industry? Why not?
How about you own a company, would you hire an accountant that is part time or does it for the cheapest price? Why not?
You have an important court case, would you hire a lawyer who does it for the cheapest price or a lawyer that has a proven and successfull track record?
ADVICE: I can keep going on here. The most important lesson is hire a competent, professional, knowledgable real estate professional that you know can get the job done! You and/or your family's peace of mind, freedom and well-being is the most important thing in my opinion.
Good luck! Feel free to contact me should you have any questions.
RE/MAX Ultimate Realty Inc., Brokerage