Having trouble selling your home? You might be making one of the most common mistakes that hinder home sellers from closing the deal.
1. Asking Too Much
The single biggest mistake sellers make is setting their asking price too high. Homeowners need to price conservatively or they risk turning off potential buyers.
Figuring out how to set the price is often tricky. Gone are the days when you can expect to sell your home for as much as your neighbor did just six months ago, according to the National Association of Realtors. So rather than looking at how much homes in your area sold for six to twelve months ago, compare prices for similar properties currently on the market. If you see a listing for a house that has been sitting unsold for a few months, chances are the owners are asking too much and you’ll need to set your price lower than theirs.
2. Questioning the First Offer
Too many sellers reject their first offer, even if it’s close to or at full asking price. Holding out for more money is a strategy that rarely works, especially at a time when credit is tight. Lending requirements for mortgages are in a flux and potential buyers have less purchasing power.
The reality is that in any market, a home’s first offer is often its best. Typically, educated buyers will seize on a property they like – with a competitive bid – as soon as it comes onto the market. Of course, sellers should still expect to receive some low-ball offers. Just don’t assume that you’ll get better bids the longer you hold out. The more time a home sits unsold, the greater chance a seller will be forced to reduce the price.
3. Failing to Respond to All Offers
What if you get an offer that’s simply too low? Don’t reject it outright, but rather see if you can negotiate. You can’t blame someone for testing the market, so do your best to persuade them to spend closer to the price you want before giving up altogether.
4. Paying for a Home Stager
Unless you’re trying to sell a multimillion dollar mansion, you don’t need to pay a professional to stage your home. There are a number of free or inexpensive things you can do on your own to get your house into show condition. Most importantly, paint the walls. Nothing does more to brighten up a place. Next, get rid of all the clutter, excess furniture and family knickknacks. Finally, make all the necessary repairs before your first viewing. If a buyer sees a small problem, say a leaky faucet, they are likely to wonder about larger issues like the furnace or roof.
5. Picking the Wrong Buyer
It’s crucial that sellers select their buyers carefully. Lenders are tightening their lending practices, making it more difficult for consumers to qualify for mortgages. Therefore, it’s important to find a buyer with a recent pre-qualification letter (issued no more than four to six weeks ago) for a loan.
Next, watch out for buyers who need to add contingencies to the contract, especially a clause stating that the deal won’t close until they sell their own home. It can be difficult to estimate how long it could take your buyer to find someone to purchase their property. Also, if that property doesn’t go for as much as they expected, that person may no longer be able to afford your agreed upon price. A better bet is to look for cash flush first time home buyers or someone who has already sold their existing property.