Selling your home is no easy process, in terms of both the actual logistics and the emotional connection you often have to your home. After all, most sellers (62 percent) own their homes for 10 years or more before selling, and 25 percent live in their homes for more than 20 years prior to making a move!
While most sales usually have a rocky path, there are some common home-selling mistakes you can get away from to help make the process less stressful and less emotional.
Whether you’re a first-time seller or you’ve been through the process in the past, being fully aware of what to watch for makes all the difference. Here are the most notable mistakes when selling your home:
1. Overpricing Your Home
One of the most crucial steps to selling a house is figuring the right price — the price that will let you sell in a reasonable amount of time, for a profit that you are comfortable with.
The risk of pricing your home too high
When listing your home for sale, one notable pitfall is giving in to the temptation of a too-high listing price. Here’s why:
- It deters qualified buyers in your price range.
- It can make your home sit on the market longer. And the longer your home’s on the market, the less buyers feel like they need to put in an offer right away.
- If you end up having to do a price reduction, buyers will feel like they have extra negotiating power.
- If your listing goes stale, you might end up selling for less than you would have if you had priced it appropriately from the start.
Figuring Out the Correct Listing Price
There are a variety of ways for sellers to figure out an accurate listing price.
GET A CMA FROM AN AGENT
A comparative market analysis (called a CMA for short) is an estimate of your home’s value, prepared by a local real estate agent. They base their analysis off of comparable homes that recently sold in the market, and they’ll often provide this service free of charge to gain your business.
COLLECT COMPS ON YOUR OWN
If you’re not working with an agent, you can do your own comp research. Try and identify homes that are comparable to yours that have sold in the last three to six months, using the following criteria:
- Same neighborhood
- Similar size (within about 300 square feet)
- Same home type — condo, house or townhouse
- Similar condition or upgrades (if a comp has hardwoods and your home has vinyl flooring, you’ll want to adjust a bit)
MAKE SURE TO HIRE AN APPRAISER
If you’re selling in a competitive market or you need to sell almost immediately, it may be worth the $500-$700 a professional appraiser charges to get an expert opinion on the value of your home. In addition, an appraisal report can give you peace of mind about the price you’ve chosen, and it can be a handy negotiating tool with buyers.
DON’T WORRY ABOUT UNDERPRICING
Sellers are often worried about underpricing, but overpricing is a bigger concern. Underpricing is actually a strategy agents use in hot markets, since a lower asking price can attract multiple buyers and cause a bidding war. You could end up selling for more than the market value, just because of the demand.
The timing of your sale can make all the difference in the price you’re able to get. In most places, the best time of year to sell is the first half of May. Homes listed during this window sold six days faster than average — and for $1,600 more, compared to average points in the year. Moreover, weather can also be a factor in your city’s selling window, so keep that in mind when researching the best times to sell in your area.
Another timing-related problem that you’ll want to keep in mind has less to do with the month of the year and more to do with how long you’ve owned the house. To get away from capital gains taxes on the sale of your primary residence, most realtors will tell you that you’ll need to have been a resident of the home for at least two of the last five years.
Even small defects can turn buyers off. If they walk through your home and find loose doorknobs, leaky faucets or wall dings, they’ll wonder if you’ve been neglecting bigger issues in the home as well.
On average, sellers make 2.2 renovations to their home before selling, with 79 percent making at least one improvement. The most notable projects include painting the interior (36 percent of sellers), landscaping the yard (29 percent of sellers), replacing or repairing carpet or flooring (26 percent), and making improvements to the bathroom (also 26 percent).
Option 1: Pre-inspect and Correct
Sellers sometimes opt to pay for a pre-inspection. By hiring a reputable inspector to take a look prior to listing, you can set a more fair sale price and head off potential issues before buyers find them. If you’re able to complete repairs before a buyer even sets foot in your house, your home will captivate individuals seeking out turnkey, move-in ready home.
Sometimes completing a repair prior to listing can be more cost-effective than waiting for a buyer to discover the issue and trying to negotiate a closing credit. As an example, your HVAC system might just need a couple new parts, but a buyer may want you to replace the whole system. You’ll also have control over the contractor selected, the cost and the materials used.
AVERAGE CHARGES FOR THE MOST COSTLY HOME REPAIRS
While a handful of home repairs are cosmetic in nature and fairly inexpensive, sellers are sometimes unprepared for the big-ticket issues that need to be handled before listing. Here are some of the most expensive big repairs:
- Plumbing: $7,000
- New roof: $6,200
- New driveway: $4,000
- Exterior paint: $3,500
- Windows and doors: Between $600 and $900 per window, plus $100 per window to remove old windows
- New furnace: $2,300
- Electrical: $2,000
- Carpet and flooring: $2,000
- Deck: $2,000
Solution 2: Offer A Repair Credit
One way to aid in helping the deal move forward a bit quicker is when there are known issues in the home (either because of a previous pre-inspection or because the buyers found something during their own inspection) is to offer a repair credit, which gives buyers an opportunity to complete the repairs on their own, after closing.
Solution 3: Lower the Listing Price
If you’ve discovered issues in your home before you list, you can lower the listing price from the get-go. Take into consideration that some buyers may still try to negotiate a lower sale price, so make it very clear in your listing description that the listing price reflects a known issue.