The Top 10 Most Common Costly Mistakes When Selling Real Estate
Anyone who has ever attempted to sell real estate has wanted the same thing:
To sell their home quickly, effortlessly and for the best possible price.
You can sell your property yourself and probably achieve market value, but if you want to get your dream price there are some mistakes that sellers often make (especially in seven hills) when selling their home you need to be aware of.
Awareness of these mistakes will ensure you dont fall into this trap and also maximise the value of your home.
1. THE Number 1 Selling Mistake – Advertising For A High/Unrealistic Price
This is by far, the worst property selling mistake any seller can make. At the end of the day, buyers are well-informed due to their diligent research and know value when they see it.
Now I’m not saying you should put no price tag on it, in some cases that can be worse because people start to think it may be too expensive and don’t bother looking at the property.
However, when the initial price is too high, potential buyers will simply walk away. If you put a reasonable price on it that is roughly $10,000 less than what it’s worth, you will have a much better chance at getting the amount you are after.
Let me break down for you what happened in this case study of a recently sold house:
- Owners dream price $620,000
- Market price $610,000
- Advertised price $609,000
- Released on market Tuesday
- First open home Saturday
- Negotiations started at @$609,000
- Sold $660,000 Monday morning
This is called an “Offers Over” strategy and not all agents are successful with this method. This will not always get you the best price, sometimes auctions work well in particular circumstances. See 34 Carinya Road, Girraween, NSW as our auction case study, with over 200 buyer inspections in which we got over a $100,000 over the owners expectations.
Pricing a home to sell is an art all real estate agents work to master. Most but not all of market value is based on comparable sales, but other factors agents look at include market movement, demand in the area (schools can drive this), property location and if it’s been renovated.
2. Do Not Try To Sell Your Home On Your Own
This is a common mistake that many sellers make. Many think that nobody will ever know their home as well as they do, and you are right, nobody will know it like you do.
Here is the kicker: A professional real estate agent may not know the home as well as you, but they can sell it better (if you hire a good negotiator that is). They know how to focus on the positives while staying away from the negatives. Studies have shown that when you try and sell on your own home, you are far less effective than the professionals because you are emotionally attached to the property and ten times more likely to make bad financial decisions based on emotions.
One of the biggest time wasters that can make you pull your hair out is buyer qualification. Basically this is the ability to find out the serious buyer from the nosey neighbours. This skill can make or break a dream price sale. A good real estate sales agent runs themselves by a strict set of rules and dialogs/qualifying questions that separate the rocks from the diamonds. This becomes a fine art and believe me, I have seen plenty of rocks!
3. Not looking Up Your Real Estate Agent On Google
The last thing you want when you hire a professional real estate agent is one who is inexperienced. You do not want a buyer to come to your open home, look at your agent and walk out the door due to experiences they had with them in the past or at the open home. Its essential to hire somebody who is well-informed, experienced and has good negotiation skills.
It is easy to look up real estate agents through online reviews or testimonials given by their buyers and sellers, as well as if they have any industry awards. If this information is hard to find (not on the first page of Google) I suggest not to go with them, because if they can’t market themselves online what makes you think they can market your property?
4. Prep Work: More Important Than you Think
What would you like to see when you look at a home you want to purchase? Do you want to find a dirty 1970s yellow kitchen or dark purple shag pile carpet? Or do you want to see a bright clean home with fine fixtures throughout, trendy furniture, a nicely manicured lawn and a smell of freshly baked cookies? You know what you want so give it to them! When your home is scheduled to be viewed by prospective buyers, you need to prepare it so that it looks like a place where the buyer would want to live.
A simple tip is put away the dishes, you will be surprised how this can set off negative emotions during an open home but it is often over looked. Set out fresh flowers to give it a look and smell that is welcoming to others, have the floors professionally cleaned and have the kids go to a friends house. Your real estate agent should know all these little tips that all add up to a better price. The house should look liveable, not lived in.
5. Address All Maintenance Issues
Before your home can be shown, you need to address any maintenance issues that may be present. For example, if you have a leaky pipe, it should be fixed prior to any inspections.
Not many buyers are looking for a “renovators dream”. Just about everyone we talk to wants a home they can just move into and not have to do any work and guess what, people are prepared to pay for it! Just think for a minute how busy we are in today’s society and how we struggle to find time for ourselves let alone work on our own home.
Additionally, if your home has any mould, it should also be taken care of. Your real estate agent will point out all of the issues that should be fixed but it is ultimately up to you to get it done. You do not need to use top of the line or the most expensive products, but everything that is included with the home should be in proper working order.
Most home sellers choose not to make repairs before selling because of the expense but don’t think of the bigger picture. What will most likely happen is that you will lose money the longer your home is on the market and you will be forced to accept a lower offer due to lack of prospective buyers enquiring on your property.
Remember, the money you spend on fixing these issues will be paid back when the house sells for much more than it would have without the issues resolved. In saying all of that please don’t make mistake number 6.
6. Do Not Overspend On Renovating
Australia has been hooked on renovation shows like “The Block”, “Backyard Blitz” and “Better Homes & Gardens”. Anybody who has actually renovated a property or has landscaped a back yard knows what a challenge and how time consuming it can be. So why does it seem so romantic and easy on all those home makeover shows with their big budgets and “expert help”?
Clearly, it is designed to entertain – and it is far from reality, you dont see the 30 tradesman and labourers in the back ground (off camera) waiting for the actors to get out of the way so they can get on with the job. Sometimes you do see them in the show but they are not discussed nor how much they cost.
In saying that, you are going to want to invest some money in fixing up your home with a new coat of paint, possibly some landscaping and other light maintenance. The important thing to keep in mind is what your home may sell for. What you want and what you get out of it are often two very different things.
Out of experience this is what happens;
- Buyers just go buy in a better suburb unless they have an emotional reason for buying in that location.
- The buyers looking in your suburb are not in that price bracket and normally can’t get bank approval which can be a deal breaker.
- You can be forced to reduce your price, the type of
- buyers you want just simply don’t want to live in your suburb, so please consult some local real estate agents.
Here is an example:
- You think you can get $200,000 for your home
- You still owe $150,000 which needs to get paid off when you sell.
- Now let’s say you can get away with $30,000 in renovations but you could spend up to $60,000.
- If you end up spending the $60,000, then you will have a total of $210,000 invested as opposed to just $180,000 if you were to stay on the low end of your renovation.
- Over capitalisation can very easily cost you $10,000 in the long run using this scenario.
This happens all too often because people fall in love with their home and make changes according to their requirements, so please keep in mind to stick to light neutral colours rather than pink and yellow polka dot feature walls, if you catch my drift…..
7. Bad Marketing Or Not Advertising Your Home At All
Most people think that all advertising is good advertising but they are wrong. You want to be sure that your home is marketed in the right places and in the right way.
An example of this can be bad photography. Buyer’s agents love it, and selling agents collect. The reason why buyer’s agents like it is because it shows the selling agent;
A) Does not know his trade
B) The agent is most likely desperate
C) A poor negotiator
This is how buyer agents can sniff out a good deal a mile away, and start moving in for the kill.
Diligent local selling agents collect it from them and do the following;
A) Laugh at the bad agent
B) Feel sorry for the owner
C) Then to put it in their marketing kits to show sellers what the competition does in the area.
Above: Example of Seven Hills Real Estate Agents.
• This guy can’t even upload his own photo
• He has used a stranded lens
• The angle is wrong
• He has not fixed up the lighting issue
• No open homes scheduled
• I could go on……
How can this guy be in business seriously….!!!!!
I once saw the top of the owners head sitting in her favourite chair with dirty carpet and clutter all over the place, it felt like nails down a chalk board when I looked at it.
Another issue is marketing online, a good agent will double check his listing online on the day of the release to the internet. I cannot tell you how many times realestate.com.au and domain have missing information or listings and to the owners horror, find it has not even been advertised.
On top of all this the need to be found on google and have a large social media presence is crucial, without it you will be missing out on a growing portion of the market.
8. Marketing Stuck In The 1990s And Not Optimising Their Online Marketing
People in general do not like change (especially real estate agents) and there are times when traditional works, however new techniques are sometimes better. Selling your home is one of these times. You want to get your listing out there so you need to know how to do it. You want to get your listing to your friends on Facebook, your followers on Twitter and your circles in Google+. While your basic newspaper ads, for sale signs and open houses will definitely help, they need some help with the new and innovative marketing techniques found in social networking.
See Graph below, print advertising is dying and it has become a daily need for real estate agencies to truly know online marketing.
If your agent has no idea about search engine optimisation or doesn’t even have a Google plus page don’t hire them because they are living in the 1990s and its 2013 Hello….!
9. Lack Of Flexibility
In our busy lives it is hard to find time to catch up with family and friends let alone buy a home. You really want to be flexible for the quality, time poor buyers to come through your property whenever they can. This time poor buyers are usually the decision makers of the family and control the finances. I have seen many sellers that miss out on $1000s of dollars just because the agent has lack of access to the property.
Flexibility can also add to your property sitting on the market for too long. I’ll give you an example, let’s say you want to get $300,000 out of your property but if it has been on the market for months and the best offer you have had was $280,000, should you take it?
When selling your home you need to take a long hard look at your sale, what it means to you moving onto the next chapter of your life and if you are not flexible, and you don’t give the buyer a win, your home could be on the market for months or even years before it will sell for what you want out of it.
When you are flexible, you will save time and money in the long run by accepting an offer that is less than what you had originally expected. Usually people are buying in the same market and you will find the home you want maybe asking for a slightly lower price as well, so try to think of the bigger picture, you could be pleasantly surprised in the long run.
10. Look Closely At The Fine Print
Your real estate agent should be able to walk you through most of the fine print in a solicitor’s contract but there may be other people involved in your sale. It is imperative that you know exactly what you are signing as the fine print can easily include things like dishwashers, agents fees, repairs that should be done.
If you don’t read all of the fine print, and consult a solicitor, it could end up costing you thousands in the sale of your home that you were unaware of. We strongly recommend you read through the contract carefully with your solicitor before you sign.
If you are careful enough not to make some of the key mistakes, and apply all of these tips and tricks suggested, you have set yourself up to get the best possible price for your property.
Should you want to reduce all the hassle in doing this or you just need someone to guide you through the process
please give me (Jhai Mitchell) a call on 02 9896 2333.
About Jhai Mitchell
Jhai is an award winning Internet Marketing Real Estate Agent for Elders Toongabbie and Kings Langley. After running his own internet marketing business he has now set his own sites for the real estate industry. He observed that 90% of real estate agents did not know how to market themselves online. Jhai is now fixed on one goal. To teach real estate agents that they can market online so much better than they currently are.
Since then he has been consistently quoted in the Sydney Morning Herald and Real Estate Business online. He is a regular guest blogger on TheHomePage.com.au, sharing his expertise of marketing aspects for the Real Estate Industry. His biggest passions are his wife, martial arts, dogs and most of all property.