Unless selling your home is just another run-of-the-mill occurrence for you, please take the time to do it right. Your peace of mind, as well as your financial well being are at stake.
Below are a number of all too common mistakes that home sellers or their agents make. These mistakes may cause your deal to fall out of escrow. They may leave net proceeds (your money) on the table. Worse still, they may lead you right into small claims court.
Take a moment to read through the points below. If something specific comes to mind and you'd like more information or a deeper understanding about it, please give me a call or drop me a quick e-mail.
- Failure to Disclose
- ALWAYS disclose what you know to be true about your property. If you don't know...you don't need to disclose. Sometimes things slip our minds. Remember that time when you broke the sprinkler in the backyard and just turned off the timer to get it to stop leaking? Disclose it! Remember when the bathroom had a leak and you hired that contractor to fix it? Disclose it! You know that broken hot tub in the backyard that you're not taking with you when you leave? Disclose it! Curtains, your washer and dryer, the drawer in the kitchen that always falls off track? Disclose, disclose, disclose. You never want an issue that you had prior knowledge of popping up after the close of escrow. It happens...and it sucks. Don't let it happen to you. "But aren't the washer, dryer, and refrigerator actually personal property that aren't transferred with the title? Yes. Does it hurt to disclose it anyway? Never. When it doubt...disclose!
- Listing Before Your Property is Ready.
- I'm sorry to say it, but sometimes clients just think too much. "I'm not sure what we can get for our house. Let's just list it and see what happens. Let's just test the waters! OK?" No. Don't test the waters. Listing your home for sale before it's really ready for sale typically ends badly. If you're home isn't ready to list, you'll either sell too low, or not generate enough interest, leaving your home sitting stale on the market.
- Make any necessary minor repairs and updates before listing your home for sale. You don't want to start this process twice, so list it right the first time. I recently released a quick Kindle reader (for just a couple of bucks) called "Is Your Home Ready To Sell?" Click here to check it out. It's a quick, simple read, but full of important specifics about what to do and what not to do.
- Overpricing
- We all want top dollar for your house. I do, and you do! But I've been doing this long enough to know, with certainty, that listing your home at an overly optimistic price is a bad strategy. Using inflated comps sure makes for exciting conversation, but listing too high based on those inflated comps virtually always leaves sellers disappointed in the end.
- There's more than one side to the story. Before I go to a listing appointment I run three sets of comps; yes, THREE! The truth is that your home's market value probably lies somewhere in the middle.
- 1st, I comp the subject property as the home seller might see
- 2nd, I comp the subject property as home buyers and their Realtors will see
- 3rd, I comp the subject property as an appraiser might see
- Sellers want big bucks. Buyers want the deal of a lifetime. Appraisers do their best to remain objective. However, he/she may not be familiar with the unique features and qualities of your specific neighborhood. Somewhere though, buried in the middle of all of these comps, is gonna be your market value.
- Cutting the Sales Commission
- This probably sounds self serving. It's not. It's just math. DON'T CUT YOUR AGENTS' COMMISSION. Notice that "Agents'" Is plural. "But I only have one agent!" I hope not. I hope that you have an agent who's advocating specifically for you, and the buyers has a different agent advocating specifically for them. In a typical real estate transaction the sales commission is 6%. 3% goes to the broker for each side, with a smaller portion going to the agents servicing each client. Cutting the sales commission often cuts the incentive for the buyers' agent. Remember, your buyers are depending on their agents to advise them. "Help" their agents advise them to write an offer on YOUR house.
- Making Too Many Updates or Upgrades
- Keep it simple. Yes, you should make repairs on any glaring issues that detract from your homes appeal. However, I can't tell you how many times I've worked with sellers who've just remodeled/updated their homes only to hear a prospective buyers at an open house say, "Wow! I LOVE this house. All we have to do is replace the flooring and the counter tops, then refinish the cabinets!" (ALL of which you just updated). We don't know the taste of your buyers. Keep it simple. Let them make the changes they want...when it's their house!
- Agreeing to Make Buyer Requested Repairs
- Don't open the proverbial Can-Of-Worms. Depending on the condition of your home...and the condition of the current market, you may opt to offer a credit to the seller in order to keep your escrow alive. Let me outline two fictitious outcomes from the same request for repairs: A root grew into the plumbing and created a leak under the lawn in the front yard. The buyer submitted a bid with a request for repairs. It's going to $750 to fix the broken pipe and cut the root back from the area.
- A) You agree to a $750 credit toward closing costs so that the buyer can have it repaired after close of escrow, and also offer to purchase your home buyer a 12 month comprehensive home warranty for another $385. You close escrow and move on.
- B) You agree to fix the leak prior to close of escrow. You pay the plumber to fix the pipe. Two weeks later the plumber makes the repairs. They turn the water off, fix the pipe, then turn the water back on. Now with unobstructed pipes the water pressure increases and reveals another leak further down the pipe. You spend another $750 to fix the new leak. Then, two days later you discover that you have no water pressure in the master bathroom. When the water was turned off to fix both pipes the corrosion inside the galvanized pipe accumulated in the smaller pipes leading to the master bath, and the guest bath, and the sink...and the entire house. Yes...you now have to disclose.
- I am NOT advising you to EVER be unethical. I never will. However, just like buying or selling a used car, you need to protect yourself. If you know something is wrong, disclose it. If you don't, move on. Your buyers should be advised to their rights and responsibility to inspect the property. If your buyer agrees, offer a credit to the buyer and get your home sold.
- Using the Wrong Realtor
- There's a laundry list a mile long of red-flags that with regard to this topic. An ineffective real estate agent often works with the following tools:
- Very little (or worse, bad) marketing efforts
- Poor photography and no video
- Poor representation and recognition throughout the community
- Poor communication habits and skills
- Little or no network of willing and able buyers
- Little or no network of cooperating brokers and agents
- Poor negotiation skills
- Lack of local area expertise
- A reputation within the industry as a difficult, unprofessional, and/or unethical agent.
- Dual Agency
- Dual Agency is when an agent represents both sides of a real estate transaction. I look at Realtors as a sort of 'coach', as well as an expert in real estate related trends and contracts. Your 'coach' is there to advise you; to help you reach your very best outcome. If I'm coaching you...and I'm coaching them...???...who's ' very best outcome' am I really watching out for? Make sure that your agent is working for you!
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| Be careful what you agree to fix! |
Thanks in advance for remembering my name when the topic of Real Estate comes up in conversation. If you're local , just remember Andy@LoisLauer.Com I'm always here to help.
My business thrives by word of mouth. If you appreciate the information provided on my blog, please share this post on your favorite social media sites, and with anyone you feel could use my service.
Until next time.
Andy Blasquez - The Last Realtor You'll Ever Need To Look For
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