Selling a house? Gut-check against this list of common missteps.
The process of selling your home is incredibly emotional. The good news is that you’re not alone. Millions of people have fallen victim to their emotions when selling their homes. This list will help you predict — and better yet, avoid — some common home seller mistakes.
1. Price reduction paralysis
Take this scenario: A seller feels overconfident about their home’s prospects on the current market and lists their home higher than comps. Soon, the home has been on the market for days or months, and that overconfidence morphs into panic — panic that their home will get only a lowball offer, or that the property won’t ever sell, or worse, that they’ll be stuck in the property and have to alter their plans. You can see how the snowball gains momentum.
What can the home seller do but sit and hope their home becomes more attractive to buyers?
Here’s a better remedy: Cut the price. The home will become more compelling to buyers, and some sellers have actually found that reducing the asking price leads to multiple offers.
Work with your real estate agent to look at comparable homes in your area and find out how long most homes stay on the market. Your agent will know if and when you should reduce your price based on comps.
2. Excessive attachment
Yes, this is the place your kid took her first steps in, the place where you carried your bride over the threshold, maybe even the place your parents built with their bare hands. But when you decide to sell, it also becomes a property and an asset that must be marketed and priced.
Sellers who are excessively attached to a home are likely to:
- Overprice it
- Ignore market data
- Disregard their agent’s staging advice
- Be irrational in negotiations around price or repairs
- Refuse to respond appropriately to market feedback
It may sound harsh, but buyers don’t care about the emotional value your home holds for you.
3. Ignoring the needs of your target audience
By putting your home on the market, you have become a de facto marketer. And every marketer knows that to get top dollar for your product, it’s essential to understand your target buyer’s wants, needs, and desires.
If you’re selling a condo with a coffee shop on the ground floor and a subway station at the end of the block, your target buyer is likely to prioritize such things as efficient storage spaces and room for entertaining. Potential buyers might be drawn in by mentions of built-in closet organizers, an espresso machine included in the sale, and incentives such as homeowners’ association dues paid a few months in advance. (And be sure your listing mentions the nearby subway station by name.)
If your home is a rambling three-story rancher on a half-acre, chances are good that pets and kids are likely to be high priorities on your target buyer’s list. Mention custom play structures, the organic vegetable garden out back, and proximity to quality schools.
4. Celebrating too soon
Sellers who celebrate before the deal is done can put themselves at a disadvantage in several ways:
- Failing to do all the items on their property prep list
- Overpricing (assuming the demand-supply imbalance will automatically swing in their favor)
- Getting sloppy in how they maintain their home while it’s still on the market
- Making large purchases or spending their house proceeds “in advance,” while the buyer’s loan and inspections are still pending
Deals can fall out of escrow for all kinds of reasons. Smart sellers stay vigilant and keep their houses meticulous and their finances in good shape through close of escrow.
5. Price confusion
Some sellers persuade themselves to base the listing price on how much money they need to fund their next home purchase or their move to Malaysia — and not on the home’s fair market value.
Remember: Fair market value is defined by what a qualified buyer will pay for your house at any given moment.
The best way to estimate or approximate the fair market value is by looking at what qualified buyers have recently paid for similar nearby homes. Most listing agents will do a formal version of this process called a comparative market analysis and present that to a seller to consider in setting the listing price for their own home.
Have emotions factored into your home sale? Share your experiences in the comments.