Half the battle of selling a home is anticipating problems before they come up. Selling a home is a major life milestone, and it can be complex when you consider all of the steps involved: preparing and listing; making repairs; finding a buyer; navigating the closing process, and finally moving into your next place.
The consequences of a mistake can impact your finances and most importantly, your peace-of-mind. Step Investment Group buys and sells hundreds of homes per year, providing sellers an alternative to the stress and uncertainty of a traditional sale. We understand the challenges many of our customers face.
1. Underestimating the costs of selling
The total cost to sell a home can amount to much more than the 3-5% in agent commissions most people expect to pay. When you account for closing costs, repairs, and other concessions to the buyer, the costs of selling can be closer to 8 % of the sale price.
For example, if you move into your new home before selling your old one, you may have to rent a temporary place or pay for both mortgages as well as other carrying costs, such as utilities, storage, etc..
2. Setting an unrealistic price
The price you want and what the market will pay can be two very different things. You might hear the term Fair Market Value, which refers to how a home is valued when both the buyer and seller are reasonably knowledgeable about the property and neither is under any pressure to buy or sell.
For the seller, it’s the sweet spot between asking too much or too little. If you can’t hit the sweet spot, you risk leaving money on the table or having your home sit on the market for a longer period of time, which can have consequences.
You may have a general idea of how much your home could be worth based on homes with similar sizes and features that have sold near you. These comparable sales also referred to as “comps”, are what many real estate agents use to suggest a listing price. The challenge is that no two comps are the same so you’d need to account for each difference between home features to be accurate. This is often called making adjustments, and it’s incredibly hard to do manually. We use valuation models that allow us to make a competitive offer based on market data, as well as inputs from sellers themselves.
3. Only considering the highest offer
The highest offer, while exciting, isn’t always the best offer given your needs. It’s common in many traditional sales to have contingencies. These are conditions that must be satisfied for the sale to close. You may have contingencies that protect the buyer’s interests like a financing contingency or an inspection contingency.
It’s important to be aware of these types of contingencies because they can impact the timeline of the sale, the certainty of the sale, and the complexity. For example, you may receive a really high offer that is contingent on the buyer selling their existing house.
4. Not preparing your home for sale
One of the challenges of listing your home on the market is showing your home to prospective buyers. Generally speaking, the cleaner, less cluttered, and more well-decorated your home is, the more appeal it can have. Clutter can make your home appear smaller and make it more difficult for buyers to picture themselves living in your home.
5. Limiting showings
Once you’ve put your home on the market, you’ll have to try to cooperate when your agent wants to show it. That could mean scampering out at dinnertime for a private showing, or vacating for several hours—or most of the day—for a weekend open house. The goal is to accommodate as many buyers as possible, even if their timing is inconvenient.
If your house isn’t easy to show, it won’t be easy to sell either. While interruptions and added weekend planning may feel inconvenient, just remember the end goal—a good return on your investment that can support your next move.
Now that you’re aware of some common mistakes to avoid when selling your home, you can be more confident when something doesn’t go as planned.