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15 Costly Mistakes Made by Home Sellers
30 Oct 2023| Posted by: Dave Tidbold
MISTAKE 1 - AUCTIONS
Auctions give you a lower price!
Auctions are also riddled with deceit. One of the worst deceptions is the 'reserve' price. Agents will tell you how your home can sell for thousands above reserve. But the reserve is your lower price! It is the minimum you will accept, under pressure. Many buyers who buy at auctions openly admit they would have paid more. Insist on an agent who focuses on a buyer's maximum price, not your minimum price. Agents will also tell you that auction prices go up. Do not be tempted.
The reason auctions go up in price is simple: they start low! Don't start low. Start high. You always get a much higher price by starting high. If agents were forced by law to guarantee that no home sellers could lose at auctions, the auction system would cease to exist.
Auctions might be best for agents.
Be warned: They are not best for you.
MISTAKE 2 - ADVERTISING COSTS!
Most real estate advertising is a waste of money!
An agent who is confident in selling your home will never need to charge you for advertising.
Make sure it is not your money. Many agents advertise to promote themselves, not your home.
Home sellers are often pressured to pay thousands of dollars for advertising. This is a needless expense because vey few homes are ever sold because of advertising.
The industry is addicted to advertising. Many agents receive huge kickbacks from advertisers and this money is seldom passed on to sellers. Many agents raise their profiles and their profits at your expense. Do not allow this to happen to you.
MISTAKE 3 - CHOOSING A HIGH QUOTING AGENT
Some agents tell lies to win your business!
Be very careful that you do not choose the agent who tells you the biggest lie about the sale price of your property. This is called 'buying your business'. Also be wary of agents who try to talk you into selling with 'no price' by telling you stories of incredible prices.
This is a common trick.
If you choose an agent based on the selling price they quote you or the 'incredible price' stories, you may be badly disappointed. If you suspect that an agent is attempting to 'buy' your business with an inflated sale price estimate, insist they give you their estimate in writing. Insist also that they charge you nothing if they sell for less than the price they estimated. This will identify the agents who are enticing you with false quotes.
MISTAKE 4 - NO NEGOTIATION SKILLS
Poor negotiators will cost you a lot of money!
Negotiation skills are vital to ensuring you get the highest possible price. There are several Principles of Real Estate Negotiation. Ask an agent to quote some to you.
You will soon discover who is the best negotiator. A good negotiator can easily create up to an extra ten percent on your selling price. Work it out, it can mean thousands of dollars. If you have an attractive home, you don't need a salesperson as much as you need a negotiator.
Be very careful: most agents are poor negotiators. Insist on an agent who is a skilled negotiator.
"Negotiation skills are vital to ensuring you get the highest possible price."
MISTAKE 5 - PUBLIC OPEN HOUSE INSPECTIONS
Your home should only be inspected by Genuine Pre-Qualified Home Buyers.
Do not allow anyone into your home unless you have two assurances:
- They have been identified; and
- They are genuine pre-qualified buyers.
Do you really want dozens of strangers opening your wardrobes and inspecting your private possessions? Sticky beaks and thieves will not buy your home - only buyers will buy. Therefore, only buyers should inspect. Also, do not restrict genuine buyers to one or two hours a week. Allow these people to inspect anytime. Be aware that your home may not be insured when you hold open house inspections. The Police Service will offer you similar advice. Please, never open your home for public inspection.
"A good negotiator will pre-qualify all buyers prior to any inspection." Home buyers prefer a private one-on-one inspection before making one of life's biggest financial decisions."
MISTAKE 6 - USING A BAIT PRICE OR NO PRICE
Experts have proven that almost 80% of buyers will not enquire about a property with 'no price.'
Never allow an agent to use a low false price to 'bait' buyers.
If you use a price range or guide or a 'by negotiation' strategy, you are encouraging buyers to offer you less. A lower 'bait' price may attract more buyers but it attracts the wrong buyers! The lowest price the buyers see will become the highest price they want to pay.
And never tell anyone the lowest price you will accept because that too can quickly become the highest price you will get.
MISTAKE 7 - REVEALING YOUR REASON
Your reason for selling is confidential!
No one, other than the agent you trust, should know your reason for selling. If your reason is revealed to buyers, it can severely hurt your chance of obtaining the highest price. This is especially true if you need to sell by a certain date. If buyers know the reason you are selling, it can weaken your negotiating position.
Too often, many agents say, "Must sell because bought elsewhere/financial problems/job transfer." If asked the reason for selling, simply say that you are 'relocating'. Don't let the reason you are selling your home be the reason you receive a lower price. Your reason for selling is confidential.
"If your reason is revealed it can severely hurt your chance of obtaining the highest price."
MISTAKE 8 - NO GUARANTEE
Avoid agents who do not offer a Guarantee!
All agents will ask you to sign an agreement before you sell your property. But remember that you are being asked to sign their agreement. Many sellers bitterly regret signing that agreement with the agent. The solution is simple: If they want you to sign their agreement, you must insist that they sign your guarantee first. Just say to the agent, "I will not sign your agreement until you sign a guarantee to protect me."
The best agents will gladly GUARANTEE their services.
MISTAKE 9 - DON'T IGNORE EARLY OFFERS
High prices often come early, low prices often come late!
Be careful. The buyers you reject when your home is first placed for sale may be the buyers prepared to pay the best price. The number of buyers for your home usually gets lower, not higher, as time goes on.
And your price will often get lower too. A lot of buyer activity over time could damage the value of your home. It tells buyers that your home is not sold. And homes which are not sold often require a big price reduction to make them sell.
Consider carefully the early offers you receive. If the early price enables you to achieve your goals, you should consider selling sooner rather than later. How many times do you hear of sellers having their homes for sale for a long time and getting a higher price? Almost never. The highest price comes when your home is fresh, not when it's stale.
The best agents are those who can find the best buyer willing to pay the best price in the shortest time and with the least cost to you.
MISTAKE 10 - OVER CAPITALISING
Many home improvements do not improve your price!
Be careful what you spend on major improvements to your home. What suits you may not suit every buyer.
Waiting for a buyer with the same taste as you may take years.
The main purpose of home improvements is to improve your enjoyment, not to improve your price. You rarely get back more than half the cost of your improvements when you sell. Do not spend large sums on home improvement immediately prior to selling your home. Focus more on presentation rather than renovation.
MISTAKE 11 - NO BUYER RECORDS
The best agents keep detailed records of buyers!
Most agents get dozens of enquiries from buyers each month. Some get hundreds.
Why don't they keep records of these people - names, details and phone numbers? Why don't they keep in contact with the genuine buyers? If they do keep records, why do they want to keep advertising? The answer is simple - self-promotion. They call it 'profile'.
Be careful. Most agents advertise different properties to attract the same buyers. Let them waste their money, not yours. Many agents keep no buyer records.
And they ask you to pay for advertising to find buyers!
Do not pay for the incompetence of any agent. Insist on an agent who keeps detailed and accurate records of genuine buyers. One of these buyers may be perfect for your home.
"The best agents have one 24 hour office contact number that records every buyer enquiry, not multiple agent numbers."
MISTAKE 12 - SPARKLE PRESENTATION
Dull homes get dull prices!
Do not confuse improvements with presentation. Make your home sparkle and your price will shine. Pay attention to little things which create a big impression - the front garden and the first appearance of your home. Stand back and look at what buyers will see when they arrive. Cleanliness is vital. One of the most important and most overlooked aspects of selling a home is its smell. Pleasant scents create pleasant moods, whereas bad odours will be an instant repellent to a buyer.
A home which sparkles always sells for a higher price.
MISTAKE 13 - NOT TRUSTING THE AGENT
If you don't trust the agent, don't hire the agent!
A major ingredient in any relationship, business or personal, is trust. Before you choose your agent, ask many questions, check references, ask for a guarantee, test their negotiating skills and ask yourself a BIG question: Do I feel comfortable with this person handling the sale of my family home? If your answer is 'no', do not hire the agent. Once you decide on an agent, give the agent your trust and confidence. If, later, you lose your trust, you can dismiss the agent (if you received a guarantee). In the meantime, show your trust.
The best agents won't let you down.
MISTAKE 14 - OPEN LISTING
The more agents you employ the lower your price will be!
Do not place your home with several agents. You may think this will increase your chance of finding a buyer. But it decreases your chance of getting the highest price. The price will be forgotten. Buyers shop around. They will use the agent who can obtain your home at the lowest price.
Choose one agent, one you like and trust.
MISTAKE 15 - SELECTING A DISCOUNT OR CHEAP AGENT
Cheap agents get cheap prices!
Be careful choosing an agent based purely on their fees. If agents give their own money away what do you think they will do with your money?
Better to pay an extra one percent for a selling fee than to receive ten percent less on your selling price.
Good negotiators get you the best market price, they are worth a fair fee. Choose an agent who offers a guarantee. If you are not happy, you pay nothing. Cheap agents generally want money up front. This is a clue.
Remember, if you sell with us you will be safe. We offer you our SMARTRE SALE Strategy which includes a NO SALE, NO CHARGE service with ZERO upfront advertising costs, and of course a written SERVICE GUARANTEE.
