Biggest Mistakes People Make When Selling a Home
A big decision
So, you have decided to sell your home, or you are on the brink of making perhaps the most significant financial decision you have ever made. You can already visualize handing out the keys to your old house for a large sum of money with which you will be able to finance your next big real estate venture. It is a good feeling if there ever was one, but it is important not to rush into finalizing the purchase agreement, especially if this is your first time doing this. Namely, there are many 'traps' and legal loopholes you can fall into only because you are not aware of them. To prevent this from happening, we will list the biggest mistakes people make when selling a home.
Be prepared for accompanying costs
The equation may seem simple at first glance. You put up a price, the buyer agrees to it, gives you money, et voila! The deal is made.
Unfortunately, it is rarely the case that selling your house works out so smoothly. There is a multitude of accompanying expenses that you will have to cover if you want to sell your home quickly and transparently.
Real estate agent’s fee
To sell your home, you need to know its value in the real estate market. Hiring a real estate
agent with the marketing and professional resources to find the right buyer at the highest and best offer is a lot easier, and you will not risk selling your home under its market value. The downside of relying on a real estate agent is that as much as 6% of the purchase value goes toward paying the agents’ commission. Keep in mind that an experienced real estate agent can offset their commission costs through their negotiation and marketing skills. It will make the home-selling process a lot easier, as costly as it may be.
Various legal fees and taxes
The seller is under the obligation to cover all or any of the following incurring costs:
Sales tax
Attorney fees
Bank transfer fees
Closing transaction fees
Collectively, these costs may amount to 1-3% of the total value of the listing.
Home staging costs
In order to sell your house, you might have to reconcile the staging costs beforehand. Although this may seem like an unnecessary waste of your money, the statistics say the opposite. Namely, having a furnished house during the home viewing process can speed up the selling process up to 88%. Also, staging helps sell houses for 20% more than what unstaged homes sell for. Therefore, this investment may even bring you in extra profit at the end of the day.
However, it can be tricky to move all of your furniture and decoration and then bring in a new set of furniture in time for a home showing. For this reason, be sure to do it in a timely manner so that you do not stall the home staging and showing phases.
Home staging is an excellent way to give your property an advantage - prospective homebuyers can visualize themselves living in it more easily.
Home repairs
Whereas staging improves your chances of selling your home quickly, home repairs are almost taken for granted. Leaving your house in disrepair is one of the biggest mistakes people make when selling a home. Although you may no longer care in what state the house is in, just think about it - a few hundred dollars will go a long way since a tidy and functional house will make a better impression on potential homebuyers.
Like home staging, investing in home repair is unnecessary but is a definite advantage in the long run.
Do not lie about major home repairs
Whether you have moisture, bugs, rodents, or other such problems, the way to solve the particular problem cannot be keeping quiet about it. As we mentioned previously, no matter how much you have to pay to get rid of such a hindrance, it will raise the value of your home. If you cannot invest in repairs, then you have to be transparent with the buyers. It is much worse for them to find out about it during a showing or home inspection. So do not waste your and the buyers' time and resolve the problem transparently.
Investing in home repairs may be even more lucrative than home staging.
Selling your home when you still have not paid off your mortgage
If you took out a mortgage loan and you still owe the money to the bank, you are not in an ideal position to sell your home. Sure, you may know this already, but do not rush into selling your house unless you absolutely have to (e.g., bankruptcy or foreclosure). You could indeed direct part of the money you get once you sell the house to pay off the loan, but you need to consider the real estate market at the time. Could it be that your property is worth less than what you paid for it? What if you cannot pay off the mortgage with the money you get?
To avoid losing your home without making any profit (i.e., paying off your mortgage is great but does not count as profit per se), be sure to seek advice from a financial expert.
Inadequate pricing is one of the biggest mistakes people make when selling a home
Confidence matters, but it may be wrong to be overconfident. You really have to know the market to pinpoint just the right amount you want to sell your house for. People who do not work in real estate may underestimate the value and lose thousands, or overestimate the price and lose so much time and opportunity to sell it.
An expert will be able to price and sell your house in the most effective way possible
Finally, make sure not to make one of the biggest mistakes people make when selling a home - relying on the internet. Browsing through listings online is not a mistake - feel free to check out the 'competition.' It will give you a general idea about pricing in your neighborhood. See how similar property is marketed, but leave the actual pricing to a professional - perhaps your home has something that is particularly sought after, and you are unaware of it.
