There is lots of advice out there for first time buyers, but what about first time sellers? Selling a house for the first time can be a bewildering experience. These sellers are navigating what, for them, is unchartered waters, and missteps can keep their home on the market longer, or cause them to leave money on the table.
If you want to avoid unnecessary surprises, delays, and headaches, these are some of the first-time seller mistakes to avoid.
1. Overpricing The Property
First-time sellers often disagree with their realtor regarding the home’s selling price. When you decide to seek out a realtor, you should understand that you are hiring an experienced professional who understands the market and knows what the home should be sold for. Realtors view hundred and thousands of homes, so they’re qualified to know what a home should be listed for. Listen to your Realtor.
Sometimes, a first-time seller may think that overpricing their property will give them room to negotiate. But that’s a bad strategy. Overpricing can actually turn off potential buyers and cause the property to sit on the market for too long.
2. Not Understanding The Buyer’s Financing Plan
Just because a buyer expresses a sincere interest in your property doesn’t mean that you’re on your way to a quick closing. It’s important to understand how the buyer plans to finance the purchase. Their creditworthiness and the method of financing they’re pursuing can impact the probability of the sale closing. The type of financing the buyer is using can also affect how long it takes to actually close the sale: most Conventional, VA, and FHA mortgages can close within 30 days, but other types of mortgages can take longer.
3. Inadequate Marketing
Even though it continues to be a seller’s market, don’t underestimate the power of good marketing. Your agent’s brokerage will do some of the advertising, but there are other things that your agent can do such as:
Provide professional photography
Write engaging descriptions that focus on the benefits of your property – not just its features.
Get creative with the advertising through blogs, social media and online resources
The Whit Harvey Group employs their own marketing professional to supplement the marketing efforts of Monument Sotheby’s International Realty.
4. Don’t try and sell the home yourself
It’s a seller’s market, you say. Why should I have to pay a real estate agent a commission when I can do it myself and keep that money? Funny you should ask...
There's a plethora of behind-the-scenes endeavors, research, professional advisory, and negotiation services that the seller may never experience first-hand.
Your Realtor has a network of contacts with other agents and buyers that you don't.
A reputable real estate agent can help navigate the complex process of selling a home, and can often help sellers get a better price for their property.
5. Waiting For The Right Time To List
Many first-time sellers are waiting for the perfect time to list, but there may not be a perfect time. Use the principles of supply and demand to work on your behalf. If your home is the only one on the market, demand will drive your price up - it’s always in your best interest as a seller to list before similar homes come to market.
6. Waiting Until You Find A Home You Want To Buy
Understandably, some sellers don’t want to sell until they know where they’re moving. And some sellers need the proceeds from this home sale to purchase the next home. The risk these sellers believe they face is to sell their current home without being under contract on their new property, and then either not having any home at all, rushing into a purchase of a home that doesn't meet their needs because their current one is sold, or moving twice as a result
One solution to the "next house dilemma" is to put the current home on the market and then negotiate a clause in the contract that provides a rent-back period of time in order to find a new place to live.
7. Failing To Plan The Cash Proceeds
If you have a specific plan and place for the money, it’s less likely to erode through unmindful spending. Understand what cash you will be getting after paying the remaining mortgage balance, agent fees, and any costs at settlement. That is the amount you have to work with.
Put it in a separate account that will force you to make a conscious decision to access the money. Talk to a tax professional before the sale. As a seller, you may face capital gains taxes, but those can sometimes be deferred if the proceeds are immediately reinvested into a similar property.