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Selling your home |
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Partially
reprinted from the San Francisco Examiner - Sunday, March
3, 1996 It's wise to follow others' good examples and
to learn by others' mistakes. So that your move will be
a sane and sound one, here's a list of 10 mistakes to
avoid.
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- Buying a replacement home before selling
the old one.
The temptation may be great to buy a replacement home
first. That way you'll know where you are going and
how much you'll be paying. And you won't have to worry
about being left out in the cold with nowhere to go
if your home sells quickly. However, the financial
risks of buying first are great. It's far better to
sell your current home first and endure the inconvenience
of moving to an interim rental - which rarely happens
- than it is to end up owning and paying for two homes
when you only want one.
- Basing the list price of your home on the
price you would like to get rather than on market
value.
Market value determines the price of your home - not
wishful thinking. A buyer won't pay more for your
home just because you think you need more money in
order to purchase your next home. Find out the market
value of your current home by having your real estate
agent prepare a comparative market analysis or by
getting an appraisal from a local appraisal firm.
This will tell you the value of your home based on
comparable sales information. With this information,
you can determine an accurate list price for the current
market.
After you know what your home is likely to sell for,
ask your agent to prepare a seller's net sheet. It
will tell you approximately how much cash you will
receive from the sale. Then, visit a mortgage broker
or loan agent to get prequalified for a mortgage.
They will let you know what price range you can afford
to buy a home at.
- Failing to get a "termite" report
(or other indicated reports) before listing a home
for sale.
Sellers are often required to pay for eliminating
wood pest (also known as "termite") infestation
when they sell their home. They may also be asked
to correct other defects. Sellers who know the condition
of their home before they sell are in a better position
to negotiate a firm sale because they can disclose
existing reports on the properly to buyers before
they make an offer.
- Putting a home on the market before it is
spruced up.
Buyers and real estate agents remember what they see.
Their first impressions are lasting ones. If a property
looks a mess when it hits the market, that is how
agents will remember it.
Most people lack the vision to imagine what the home
will look like when it's fixed up. It's usually better
to delay marketing a home until it's spruced up for
sale. Most buyers utilize realtors' services to purchase
homes so, realtors are more excited about showing
and selling homes when they are in mint condition.
- Refusing to reduce a listing price that
is too high for the market.
It's hard to be objective about the value of your
home. This is why it's important to get a professional
opinion before setting a list price. Over-priced listings
often take a long time to sell. Thus they can sell
for less than they would have if they were priced
right to begin with.
It's natural to want to get the most money possible
when you sell. Competitive pricing is the way to achieve
that result. If you find that your list price is too
high for the market, reduce your price sooner rather
than later. The longer it sits on the market unsold,
the lower the ultimate selling price is likely to
be.
- Refusing to counter a low offer.
Sellers want to sell high; buyers like to buy low.
A low offer from well-qualified buyers is better than
no offer at all. A high offer from unqualified buyers
only leads to disappointment. The price, buyers offer
is not the most important part of their offer - if
they are willing to negotiate.
- Insisting on being present when the home
is shown to prospective buyers.
One way to discourage buyers from buying your home
is to be home during showings. For buyers to decide
to buy a home, they first must discover, and discuss,
all of its flaws. Buyers are reluctant to say anything
negative about a home in the sellers' presence. It's
best to leave your home when it's being shown to prospective
buyers.
- Listing with a contingency to find a replacement
home.
This is like saying that your home might be for sale.
Serious buyers make offers on homes that are definitely
for sale. Otherwise, buyers could wait in vain for
unrealistic sellers to find an acceptable replacement
home.
Sellers often want a contingency to find a replacement
home so that they don't have to move twice. To avoid
having to move to an interim rental, list your home
with a provision that you may need to remain in possession
and rent back the property for a period of time after
closing. At least, the buyers know they have bought
a home, even if they can't move in right away.
- Setting up a complicated showing procedure
that discourages showings.
A home that can't be shown, can't be sold. The easier
it is to show a home, the more often it will be shown,
and the quicker it will be sold. There is usually
a direct correlation: the more showings a home receives,
the less time it takes to sell.
- Refusing to do anything to get your house
ready to sell.
The way most people live in their homes is usually
very different from the way a home should look when
it goes on the market. In order for someone to want
to buy a home, they must be able to envision themselves
living there. Most sellers have to de-clutter and
clean their homes - at the very least.
Often there's quite a bit more work that needs to
be done before a home is ready to sell. For example,
in order to get the highest price possible when you
sell a car, it's wise to have it detailed to look
its shiny best. The same concept applies to selling
houses. Buyers pay a premium for homes that are in
move-in condition.
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