The 7 Sins When Selling Your Home
Listing your home inevitably brings up challenges, my intention with this article is to help you navigate those challenges and keep you out of all the trouble that comes along with dealing in high-stakes Real Estate transactions.
As a Realtor I meet an exorbitant amount of people, many of whom say "I'm thinking of listing my home BUT I have the news telling me one thing about the market, a Realtor telling me another and then that friend or family member that has an answer for everything. Where do I start?".
Now, without the ability to dive into what the best strategy is for your unique situation I'm left providing you a blueprint of what not to do and why.
Before we begin. Of course, there are more than 7 sins when listing your home so to be clear these are some of the ones I see that cost sellers the most money and open up future liability.
The First Deadly Sin: Over Pricing.
The reason why you should not overprice a home is simple. It won’t sell!
If you're working with a Realtor, which I'll get to at some point and that Realtor is taking your direction on pricing the home or is suggesting to price high and "see what happens" you might want to re-consider whom you're working with. At a high-level here is why. Unless there is market data that suggests that is an appropriate pricing strategy you're unlikely to beat the numbers.
If your Realtor is not proficient in convincing you of your homes actual worth it could be possible that they would also have a hard time convincing someone actually interested in buying it of its worth... just saying.
Secondly, rarely in a market place will you see homes going over market value (that doesn't mean over asking) it means over the market and the sum of its parts. So, pricing at an unjustified premium and hoping you will find that one buyer can be catastrophic, let me explain...
-Pricing your home at a premium to market – is a sure-fire way to stall the sale of your property. Buyers don’t care that you need X amount for your home, think about it do you care when you go house hunting? All a buyer cares about is paying the fair market value or less. I placed this as number one for a reason.
-If you are not careful you will lose qualified buyers most of which are often working with Realtors, and a great agent can spot an overpriced home from a mile away. These agents will advise their clients to steer clear of your home, protecting you is a large part of what we are paid to do.
-Even if you have a longer-term sale horizon it's still possible to price yourself out of the market and if there is a correction you could be finding yourself taking enormous price reductions.
-Realtors and buyers search for homes in the same way everyone else does – through google and multiple listing sites.
Essentially you enter in the parameters and the search delivers results that fall into those specifications. So, the more closely your homes price is to the market value the more qualified buyers it will actually get exposed to which typically translates into a successful sale.
-Then you can run into Home Price Appraisal Issues for the sake of example a buyer that is willing to pay what you are asking. He or she happens to think your place is perfect and is willing to pay your asking price for the home. They need to get money from the bank to pay for it, hard to justify getting a loan for an overpriced home take my word for it, or don’t and ask a mortgage specialist.
Look, I could go on about this all day. The moral of the story on home pricing is understand the market place is typically unforgiving and rewards those sellers whom do the most research and hire agents that have extensive marketing and sales experience to expose the home so as to capitalize on the upper end of values as well as staying clear of the remaining 6 sins.
The Second Deadly Sin: Deferred Maintenance & Cleaning Before Every Showing
This is a big one! If you don't invest in your property don't expect anyone else to. Have you ever walked into a home and instantly felt, I have to take my shoes off OR the opposite, walking in and subconsciously thought there's no way I'm going barefoot in here?
Buyer's will be thinking and feeling how you prep the home to feel. The old saying " first impressions last" couldn’t be truer. Think of how expansive it can be to have a qualified buyer with a bad taste towards your home OR worse a Realtor who has multiple clients they'd like to show the home to but are apprehensive because they don’t want that experience for their clientele.
So, what's the takeaway: 1. If there is work needed on the house and it's in your budget, consult your Realtor to get a sound idea of the ROI. In the end once the home inspection is complete the buyer's agent will likely be asking for the repair amounts and possible extra for the hassle off the sale price. Better to get it done well in advance and take away any reason for negotiating the price lower and at the same time attract better buyers. 2. Clean before every showing IF you want to position your home sell for what it's worth.
The Third Deadly Sin: Presentation
I'm not just talking about how clean your home is here and is it staged effectively. I'm talking about from the moment a buyer views your advertisement to the moment they write an offer. In real estate image is vital. Think about it, you’re selling more than a home, in many cases you're selling the vibrancy of the lifestyle that location provides. I'm not going to get into a whole how-to here but when you bring your house to market these are some items put attention on in your marketing & presentation.
Externalities: Ask yourself, who is the ideal buyer for my house & what about the lo-cal would someone value enough to make the move? Is it unique, are there world class restaurants, boutiques and shopping at your doorstep, is it near all the premier schools, 5 minutes from the best ski slopes in Canada. Find it, use it, leverage it.
The Fourth Deadly Sin: Not knowing
Time kills all deals. Not knowing something that’s pertinent to the sale or even something that might seem insignificant can add unwanted & unneeded time. Within the time it takes you to track down the answer the buyer could have already fallen in love with another home, put an offer in elsewhere or worse the market could change. We've all seen market crashes and how quickly sentiment can change.
In Summary, Information: Know more about your home and the area than anyone else. That means, having knowledge about why the schools in your area have been ranked the highest, what are the hours of local day care, who designed your home, if you’re in a strata what are the bylaws. Are there local improvements being made in your area and what is the anticipated impact and so on...
The Fifth Deadly Sin: Simplicity & Transparency
It's just a fact people no longer have time for idle chit chat, complex sales processes that lead to deal fatigue or games such as not listing a price or other details so people will have to call in. I'm sure you'll agree it just ticks people off, additionally it's waste of their time and I like many other buyers would not take kindly someone who takes that for advantage. There is an acronym we used in hockey and in many ways it's translatable to how we should do business it's KISS Keep-It-Simple-Stupid. Make the process simple and transparent from start to finish.
The Sixth Deadly Sin: Renovation Mistakes *Not to be confused with Sin number Two - Deferred Maintenance *
At first glance the idea to renovate a few areas of the home that might be lack lustre seems like a great idea and sometimes it can be. However, often we see someone who has spent thousands making their home look exactly the way they want it and the prospective buyer in nearly all cases has a different taste and because of that doesn’t factor in all the Reno's; in fact, I've seen offers contingent on an amount that would be including them doing a re-renovation to get it to their liking.
My advice is twofold should you decide to renovate at all. 1st speak with a Realtor in your area that has a good sense of what people are looking for 2nd Keep the design more general crowd-pleasing vs specific-niche, an example might be, rather than making a custom man cave in the legal suite below, craft it as turn-key rentable unit. This can be great if a buyer needs to have a family suite OR if they need to rent the unit for recurring revenue to acquired loan approval.
The Seventh Deadly Sin: Not working with a Realtor who is also Seasoned Sales & Marketing Practitioner:
You're probably thinking oh great another sales pitch to work with a Realtor. Fact is I'm going to, well kind of. It's not because I need the business, as much as I appreciate it. Heck I don't take every client that comes to me, it's a partnership and as such I'm selective.
It's because if you haven't seen by now it takes a real pro to not only get the most out the transaction it takes a pro to protect you from all the stuff that keeps us up a night and if you stay with me here long enough to see how this might be true it could save you.
Now, I'll keep this as more of an overview as each of us brings our own unique background and expertise to the table. For example, I'm a serial sales practitioner who's been on the winning side of high-stakes negotiations for over a decade and someone who's built a legacy of trust and results with my clients, what that translates to for clients more often than not is getting the upper end of market value on their homes, a deal created where no one thought it possible. Other's might have extensive knowledge of a particular area or expertise in selling in a specific vertical. These are things to consider when narrowing in on the scope of your needs.
Here are some other items over and above personal experience that can be advantageous in using a Realtor.
Education & Experience: You don't need to spend your valuable time learning everything about buying and selling real estate if you hire a real estate professional who does. Henry Ford once said that "when you hire people who are smarter than you are, it proves you are smarter than they are".
Agents Are Buffers: The ultimate spam filters. From moving lookie loos along to maximizing opportunities and putting your best foot forward on your behalf.
Neighbourhood Knowledge: Agents often possess intimate knowledge of an area, things that are not published, not easy to find and not on the average person's radar. This hands-on sourced information can make an enormous difference in the outcome of the purchase or sale of your home.
Price Guidance: Simple fact is agents don't set prices, they negotiate to the best of their ability around current market values. An agent will also help clients navigate this so they can make the right choice for themselves.
Market Conditions: Locked and loaded with the most relevant market data, access to the most brilliant minds in the business and boots on the ground experience, agents can not only provide the most relevant data that’s vital for positioning your home in the market they can also synthesize the information saving you countless hours and formulate a strategy based on your unique objective. Believe me this alone is worth the investment.
Professional Networking: The majority of us have huge networks so when listing or buying you gain access to massive exposure for your home or have that inside track in finding the perfect one. These networks also include other professionals, many of whom provide services that you may rely on to buy or sell.
Negotiation Skills & Confidentiality: Top agents negotiate obscenely well because, unlike most buyers and sellers, they can remove themselves from the emotional aspects of the transaction and this is what we do; most of us 24/7. Great agents are not messengers, delivering buyer's offers to sellers and vice versa. They are professionals trained to represent their clients to the nth degree and have a duty to hold client information confidential from competing interests.
Answer Questions After Closing: Even the smoothest transactions that close without a hitch can come back to haunt. For instance, a tax authority that collects property tax assessments, transfer tax or document stamps can run behind or mix up invoices, but one call to your agent can straighten out the confusion. Many questions can arise that were overlooked in the excitement of closing. We're here to help.
Develop Relationships for Future Business: The basis for an agent's success and continued career in real estate is referrals. In addition to being committed, skilled practitioners and performing to the very best of our ability for our clientele this also puts a strong emphasis/incentive to make certain clients are getting results.
Handling Volumes of Paperwork: Just going to keep it real here. The amount of paperwork that is needed from for sale to sold is just plain nuts. (and everybody loves paperwork, right?) If that's not enough, one tiny mistake or omission could place you in a difficult position or cost you thousands.
I hope this has brought you some value and maybe even changed the way you look at approaching a real estate transaction. If you're interested in partnering with me on your next deal, connect with me directly from there we can chat about your needs and see if working together would make sense.
Thanks for the thing that matters most, your attention!
Be great - DB