It is April in Raleigh where everything is in full bloom including sellers who want to take advantage of the spring market when their yards look the best and the school season is drawing to an end. I have sold over 5,000 homes in my 25 year career and in the past 3 months have met with approximately 100 sellers who either “want or need” to sell their home. I believe those numbers qualify me as an expert to share mistakes I see sellers make as they plan for a move.
Mistakes Home Sellers Make
1. Delusional Thinking
“My home is special, I WANT to sell, I need to net, It’s sold as is! ” When these words come out of a sellers mouth I know they have delusional thinking are headed towards bitter disappointment. My job is to first save them from themselves by educating them to the differences of a home sale instead of a home listing. Many REALTORS will list homes for sale following the requests of the seller instead of educating them to how to be in the market and sold instead of just listed. There is a huge difference between being “in” the market or “on” the market. Delusional sellers look for magic pills and hope time will be their cure all. 6 months later their house isn’t sold and the search begins for another REALTOR to work magic. Sellers with delusional thinking place houses on the market instead of in the market.
For Success Change Your Thinking.
Your house will only sell if buyers think it’s special. Wanting to sell instead of needing to sell usually means Disney Land pricing- be careful with that thinking. Pricing you home with what you want to net instead of market value is like buying your house back every day it’s on the market. It will never sell if your net doesn’t match market value. Sold “as is” happens all the time with distressed properties at very discounted prices. “As is’ guarantees one of two things either a low price or no sale at all. Is that what you want?
2. Pricing With The End In Mind
I can’t tell you how many times I have heard “I need to net X to have enough money to buy the type of house I want”. The market is, what the market is. I do not know any REALTOR who can make a buyer give a seller what they need in order to buy their next house. Frankly, the buyer doesn’t care what you need and is not going to help you buy your new house. They are trying to buy their own house. Hopefully yours. If you need to net X and it is higher than market value forget selling. Stay put and enjoy the home you have or alter your desires on what you purchase with your net dollars.
3. Hiring The Wrong REALTOR
A REALTOR’S job is to educate sellers, market their home and negotiate contracts. Therefore it would make sense for sellers to focus on how much experience and exposure the REALTOR they hire can bring to them. Instead many sellers hire family friends or REALTORS who have no market reach other than a sign and MLS listing and lack experience in negotiations. Ask how many homes they closed last year, this month and how many they have under contract now. Then ask how many of them were listings and how many were buyers. Do you want to be the very first house they have ever listed for sale? Or the second, third or fourth? NO you need experience if you want success. Working with sellers is very different than working with buyers. Seller’s agents need marketing dollars, contract negotiation skills and problem solving abilites. Does your agent qualify for the job?
4. Keeping up with the Joneses
One of the biggest mistakes I see most sellers make is pricing their home by comparing it to other houses for sale now. They say “My neighbors house is priced at X and I have better landscaping and a fence so I think my property is worth XX”. Hello…..what if your neighbor is wrong?! Didn’t your mother tell you two wrongs do not make a right? The fact is, most of your neighbors are wrong because they have all followed this delusional thinking trap. In every market there is data to prove what percentage of neighbors are wrong. It’s called number of price reductions and expired listings. I am certain many of your neighbors are wrong. Please, Mr. and Ms. Seller, I beg you to look at sold and under contract properties. Not what’s for sale now.
5. Eliminating The Appraiser From The Equation
This may be the most overlooked, under estimated, dangerous mistake a seller makes. It doesn’t matter what you want for your home, or what a REALTOR thinks it is worth, or even what a buyer is willing to pay….if there are no recent comps to support the agreed price it is not going to appraise and you will lose your sale 99.9% of the time. Appraisal guidelines have really changed. They look for comps that have sold and closed in the past 90 days. If there are good comps they use them. If there are no comps they may go back 6 months. However, the times of them going back a year or two and justifying a sales price is over. Appraisers are chosen by lottery, comps have to be the most recent, they also have to include under contract, short sales and foreclosures sales in their report. All appraisals go under a second review by the mortgage companies underwriter before acceptance. No appraiser is sticking their neck out. If the comps say X and your contract is at XX your appraisal comes in low which reduces the amount your buyer can finance and the deal goes south. When you list you home for sale begin by looking at closed properties within the past 90 days just the way an appraiser will. If concessions were paid you must reduce that amount from the sales price too. Adjustments are made for differences such as no garage verses 2 car garage. Your REALTOR can help you understand the adjustments in the comparable properties. Age, square feet and location are the big 3 factors. Upgrades help a house to sell when competing in the beauty contest against other home choices but, do not necessarily help appraised value when it comes to mortgage companies lending money.
If you are considering selling your home in the Greater Raleigh Area please know that the days of inviting a REALTOR to sit at your kitchen table telling you what you want to hear so they get you to list with them is over. A successful sale today begins with a listing consultation in the REALTORS office where you can see the most recent sales in detail the way an appraiser does, study other sellers who failed to sell and why. Do not make the same mistake as others, look at your competition through buyers eyes, see first hand the marketing you are paying for and make a good business decision about selling your home in the current market. If this consultation shows sales in a range that will give you the net you want your odds of selling are very high and you should jump into the market. If the numbers do not make sense for you to sell now, wait. Real Estate always goes up in value over time.
For a free seller consultation contact me through my Raleigh homes website or call 919.235.0007.
Hope you have a great Monday!