… And How to Avoid Them Happening To You
This tip sheet is intended to help you avoid making some of the most common mistakes that homeowners make when preparing to sell their home.
Mistake #1 – Not Properly Preparing Your Home for Sale
It’s essential to make sure your home is looking as good as it possibly can before being viewed by potential buyers. Poor property presentation usually means a lower selling price because buyers instinctively mark down the value of poorly presented homes. Property presentation includes things like a repaint of certain areas, de-cluttering, small maintenance jobs, cleaning windows, walls, and other surfaces, and creating as much space and light as possible in your home.
Mistake #2 – Choosing The Agent Who Quotes You The Highest Estimated Selling Price
All too frequently we see homeowners tricked into appointing the wrong agent because that agent quoted the highest estimated selling price for a property … a completely false and excessive market price estimate that’s unsupported by recent sales evidence.
This is called “Buying the Listing”, it happens a lot, and it’s an easy trap to fall for. I often see homes selling for way under their true market price because the property went to market with too high a price to start with, and as a result, just sat there for ages unsold, eventually going stale, and selling for less than it was really worth.
I don’t want that to happen to you.
You can avoid this trap by making sure your intended agent justifies their estimated selling price by showing you solid evidence of recent comparable sales, and listings of comparable properties that are currently for sale.
It’s important you ask for and get this information and study it carefully. Go and drive by the properties recently sold and physically inspect properties that are on the market.
Get informed. It’s important.
Your job is to make sure that whatever price you put on your property, it is the best property available at that price.
You need to be competitive to get your property sold.
What you are offering to the market needs to be compelling. It has to stand out and be seen to get sold.
If you suspect that an agent is trying to buy your business, move on to another agent, or give them a two week listing to prove their worth.
But be aware that this can cost you time and money. And chopping and changing agents is best avoided because you’ll lose market momentum.
Mistake #3 – Picking An Agent With A Cut Price Commission
Be cautious of agents who offer you a cut price commission.
This is an indication that they know they have nothing unique to offer you and therefore have to compete on commission.
It may also mean that they’re not very active, and the last thing you want is an agent who is not active.
A successful agent can only handle so many campaigns at once. It is not uncommon to have to wait for a gap to open in a successful agent’s schedule.
So if an agent is cutting their fee to try and win your business, there’s probably a reason they don’t have a lot of business. Busy, successful agents have more buyers, do more appointments, meet more people, and have more chances to find a buyer for your home than the ones who are not as active.
You’re far better off paying a higher fee for expert service, excellent marketing, high level administrative support, and exposure to a higher number of prospective buyers, and getting the best possible result, than trying to save a few thousand dollars in fees.
You have to agree that to save $2,000 on the fee, and risk having to take $20,000 less for your home due to poor marketing and second-rate negotiation is false economy.
Mistake #4 – Working Against Your Agent
Once you have chosen an agent that you trust (and please, don’t hire one that you don’t), let them utilise their expertise without interference.
Place your confidence in their ability and work with them to get the best price possible by following any suggestions or advice they offer. Remember that they are as keen to sell your property as you are, and until such time as it sells, they don’t get paid.
We often hear of homeowners “turning” on their agent if they don’t sell their property quickly. A more productive approach is to work together shoulder to shoulder as a team to attain the best possible result.
Mistake #5 – No Record Or Database Of Qualified Buyers
This will probably surprise you, but many agents do not keep up to date records of all the prospective buyers they come into contact with.
This is surprising because a list of qualified buyers that an agent can match to your property is often the very best way of securing a sale quickly.
Ask your intended agent (before listing your property with them) how many qualified buyers they can immediately expose your property to.
Ask them for evidence of this.
All agents can say they have buyers. They could have 2 or 2,000. But the key is having potential buyers who have been qualified as ‘ready to go’ and interested in your type of property and price range.
Ask the agent you’re interviewing to explain how they accumulate prospective buyers and how they communicate with then to stay up to date with their buying intentions.
Mistake #6 – Poor Utilisation Of Advertising Funds
To get a top result you need to give yourself every possible advantage to reach your prospective buyers. Limiting your marketplace reach is a big mistake.
You need to let everyone looking for a property like yours know that your property is available.
This doesn’t have to cost you a fortune. But where you advertise is important. I believe in directing the majority of your advertising funds towards local advertising, as that’s usually where your buyer will come from. Local papers, a good-looking signboard, a high-quality brochure, and exposure on the major internet portals are where your funds will get the best return on investment.
Mistake #7 – No For Sale Sign
If you really want to sell your property, there’s no point saying: “I don’t want a sign out front because all the sticky beak neighbours will know I’m selling”.
It really doesn’t matter what your neighbours think — you’re leaving anyway and they won’t be your neighbours for long.
By not having a sign out front, you are eliminating exposure to a large section of potential buyers who may not be looking for property that very instant, but see your sign and are immediately attracted to your property.
Many homes have been sold from just the signboard alone – it’s your 24-hour silent salesperson right there in the centre of your marketplace.
Mistake #8 – Auctioning When Inappropriate
Don’t be talked into an auction unless the market is strong with more demand than supply, or your property is unique, difficult to price, or so irresistible that you will have people falling over themselves to buy it.
An auction generally restricts your market to cash buyers only, but it can work very well for the right property and right market conditions.
Mistake #9 – Selling With A Tenant Still In Place
It’s not always possible to sell your property without tenants in place. But if you can sell it without tenants in place, it’s almost always better to do so.
Many sellers of investment properties want to keep the tenants in the property while they are selling so as not to lose out on the rent during the selling period.
But often, these investors don’t realise how much it may cost them in lost profit upon sale to keep their tenants there during the selling period.
Tenanted properties will not usually present as well as owner occupied properties, and access can be restricted, or difficult to arrange.
So if the lease is nearly up, let the tenant go, and put some effort into presenting the property in its best possible light.
Mistake #10 – Ignoring Or Rejecting Early Offers
You may have heard the saying: “Your first offer is usually your best offer.”
That’s not always true, but often enough a seller receives a ‘fair and reasonable’ or ‘good to great’ offer early in the selling process when they’re brimming with confidence … and reject it, wanting more.
Later on, when interest has waned and more competitive property has come to market, the seller reluctantly accepts a lower offer than the first one.
The first couple of weeks when the property is new and fresh to market is when you are most likely to get your best offer. It’s an important time in the campaign. Listen to advice from your agent as to how to handle this.