5 Mistakes People Make When Selling Their Home
1. Not understanding the law of diminishing returns
Some of us have a Do-It-Yourself streak inside of us. We think to ourselves, I can get more money for this place if I make some updates. The problem is that you might inadvertently put more money into your projects than what you get out of them.
For example, updating your kitchen cabinetry may seem very appealing. But adding another bedroom will give you a greater return on investment. So you want to make upgrades that increase the value of your home. Not upgrades that put you in the hole.
Takeaway: Know which improvements add value to your bottom line.
2. Not knowing the condition of the market
Nobody likes being disappointed. We all have a specific date in mind for when we want to move. We all have a certain price we want our home to sell for. But sometimes the outcome falls short of our expectations. Thankfully, if you go into the selling process with eyes wide open, you won’t be caught off guard.
Questions to ask include: Are we in a buyer’s market, seller’s market, or balanced one? What are current mortgage interest rates, and how will they affect potential buyers of your home? How does the spring market differ from the summer, fall, or winter market?
Knowing your current market is also key to pricing your home accurately. If you price your home too low, you lose potential money. But if you price your home too high, you lose potential buyers because it’s outside of their budget. Later, when you finally lower your asking price, it causes buyers to wonder if something is wrong with your house. They will be less attracted to a price-reduced home that has been on the market forever.
Takeaway: Learn what your local market is doing so you’re fully informed.
3. Not recognizing the stress of moving
Yeah, this one sounds like a downer. Moving is one of the top five most stressful things a person can go through. But knowing this fact is half the battle! A lot of stress can be avoided altogether with the right preparation and know-how.
There’s a reason 98% of homes are sold through a real estate agent. Having a good agent who can help you every step of the way is one of the biggest favors you can do for yourself. You can have a successful home selling experience when you take the appropriate steps before, during, and after the sale of your home.
Takeaway: Prepare the right way so you can stress less.
4. Not estimating costs and prices accurately
It’s a sinking feeling to find out your financial margin is narrower than you thought it was. That problem, however, can be solved by crunching the right numbers. On the selling side, you want to factor in closing costs, potential inspections, repairs, taxes, HOA fees, and commission.
If you’re also buying a new place, don’t forget about the down payment, inspections, earnest money, appraisal fee, and closing costs. When using a mortgage calculator, be sure to include insurance and real estate taxes.
Takeaway: Talk to a real estate agent so you can set realistic expectations and aren’t surprised at the closing table.
5. Not marketing your house properly
Have you ever seen a home for sale online? Sometimes the pictures are distorted, blurry, dark, and have random objects in the shot (sorry, the vacuum cleaner in the photo doesn’t come with the house!). You don’t want potential buyers passing over your home just because they saw a poor representation online. Instead, make sure you give them a great first impression.
Best marketing practices include getting professional photos taken, advertising through social media and email, holding an open house, conducting property showings (in-person and virtual), leveraging networks with actively searching homebuyers and other real estate professionals, and syndicating your listing through the MLS so it’s marketed to all websites instead of just one.
Takeaway: Put your best foot forward when marketing your home. You’ll get more money and your home will sell more quickly when marketed well.
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