Photo (cc) by MichiganMoves
If you’re trying to sell your home right now, you face two big problems: Prices are at rock-bottom, and when you do find buyers, they can’t find financing.
As the National Association of Home Builders explains, more than three-quarters of homes sold between October and December “were affordable to families earning the national median income of $64,200” – the highest percentage since the NAHB started keeping track two decades ago. But “overly restrictive lending conditions” are frustrating both buyers and sellers.
In the video below, Money Talks News founder Stacy Johnson points out some dumb moves that could cost sellers cash, time, and even the sale. Check it out, and then read on for details.
1. Using the wrong agent.
If you’re going to pay 6 or 7 percent to real estate agents, get your money’s worth. Ask friends and family for referrals, visit open houses and start building a list of possibilities.
When you’ve narrowed down your list, make a list of questions to ask your candidates – things like, “How many homes have you sold in my neighborhood? How close to the asking price did they sell for? How long did it take? How exactly do you market homes in my price range?” Their answers will help narrow it down. The ideal candidate has a lot of local experience and knows what homes nearby go for, so they price correctly and get what you ask in a relatively short time.
When you have your top three, invite them over for a walkthrough. Get their assessment of your home’s value and get them to spell out their specific marketing plan: the number of ads, how many open houses they’ll hold, and anything else they plan to do. Get it in writing – this is what you’ll use later to hold their feet to the fire.
For a much more detailed look at finding a reliable agent – and whether you even want one – check out 10 Questions to Ask Before You Hire a Real Estate Agent.
2. Failing to stage.
Making your home look like it belongs in a parade of homes will make it sell faster. It’s a technique known as staging.
According to the International Association of Home Staging Professionals, 94 percent of professionally staged homes sell within a month. You can hire a pro, but even without one there’s a lot you can do yourself.
The goal is to make it look like a beautiful home, but not your home – more like a nice hotel. Functional, classy, but not cluttered. So pack up your personal stuff like you’re moving – that’s the idea, right? “Personal” is anything that says mine, not yours: family photos, knick knacks, stuff that suits your quirky tastes. If it’s not essential and doesn’t make things look nicer, put it in storage. (Don’t stuff the closet, because buyers will probably want to peek in there.)
Then clean and touch up everything: carpets, tile, furniture, beds, fixtures. Fix any minor defects like cracks and leaks, and if you’re going to paint, go for off-white.
Do your best to maintain that appearance for every potential buyer that comes knocking. If you have an agent, ask them what they think about the look. If not, ask people who are almost never there – fresh eyes are a big help.
For more ideas and to see what a professionally staged home looks like, check out Home Staging and 7 More Ideas That Will Sell Your Home for More.
Don’t pay attention to national housing prices or historical trends – the current local market is what matters, because prices can vary widely by area. You can use sites like Zillow.com and Trulia.com as a starting point, but you also need to scout out the competition. Act like a buyer and visit everything comparable currently for sale in your neighborhood. If your agent is good, they’ll be familiar with the data on what homes are going for nearby.
Overpricing to give yourself room to negotiate, or because you haven’t accepted the loss in value that may be affecting your area, can backfire. Some people just won’t consider a home unless it’s realistically priced. They might think it’s out of their league, or that you’re unreasonable and impossible to work with. If nobody bites, you’ll have to lower the price, and each time buyers see that happen, they’re going to believe you’re more desperate and they have more bargaining power.
4. Locking yourself in with an unprepared buyer.
Don’t accept any offer unless you know the buyer has been pre-approved for financing. Buyers’ financing struggles become your problem if your house is off the market and you’re stuck in contract limbo for weeks.
5. Being around too much.
Standing around while potential buyers are looking through your home is a bad idea. You want them to imagine it as theirs – tough to do if you’re hovering. If it’s at all possible, leave home before they arrive.
Got other advice for home sellers? Share it on our Facebook page. And if you’re on the other side of the equation, look for our story Friday on dumb moves for buyers.