18 Costly Mistakes made by Home Sellers
Mistake 1 - 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 my guarantee."
And your Guarantee is the Real Estate Consumer Protection Guarantee for Home Sellers, designed following consultation with a legal team and advocates who are committed to increased consumer protection in real estate. Until increased consumer legislation comes into effect, you are welcome to use the Real Estate Consumer Protection Guarantee for Home Sellers without cost or obligation. This Guarantee can be used with any agent.
The best agents will gladly GUARANTEE their services.
Mistake 2 - 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. Do not interfere. Allow the agent to make decisions and get on with the job of finding the right buyer for your home. If, later, you lose your trust, you can dismiss the agent (if you received a guarantee). In the meantime, show your turst. The best agents are worthy of your trust. They won't let you down.
Mistake 3 - ADVERTISING COSTS
Most real estate advertising is a waste of money
Make sure it is not your money. Many agents advertise to promote themselves, not your home. In the past 20 years, real estate advertising has increased as much as twenty times. In most areas, the number of sales being made today is the same as twenty years ago. Home sellers are often pressured to pay thousands of dollars for advertising. This is a needless expense because very few homes are ever sold because of advertising. The industry is addicted to advertising. There are dozens of advertising awards, yet client satisfaction awards are almost unknown. Many agents receive huge kickbacks from advertisers and this money is seldom passed on to sellers. Many agents raise their profile and their profits at your expense. Do not allow this to happen to you. Never pay money in advance to an agent for advertising. And, DON'T SIGN ANYTHING which asks you to pay for advertising before your property is sold and you are satisfied.
Mistake 4 - DEMANDING ADVERTISING
Advertising will rarely sell your home
Too often home sellers make the mistake of demanding advertising for their homes. Buyers who want to buy in your area always visit your area before they buy. The area attracts them more than the advertising. It is a waste of time, money and energy to place advertisements in publications which reach thousands of people who will not buy in your area. Provided your agent's office is open seven days, buyers for your area will be attracted to your agent. The best agents will then qualify the buyers and bring them to your home. That's how most home are sold.
If your home is not selling there are usually only two reasons: the agent is incompetent or the price is far too high.
If you keep advertising it, people will keep wondering what is wrong with it.
Mistake 5 - 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 auction 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, you may be badly disappointed. If you suspect that an agent is attempting to "buy" your business with an over estimated 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 your with false quotes.
Mistake 6 - SELECTING A 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 rarely give big discounts on their fees. If they 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. But remember, ALL fees can be negotiated down, especially if the agent is trying to negotiate your price down.
Mistake 7 - 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. When agents keep records of genuine buyers, there is less need for advertising. Ask the agent to explain how advertising can often lower the price of your home.
Many agents keep no buyer records. And then they ask you to pay for advertising to find buyers! Do not pay for the incompetence of any agent. Insist on an agent who keep detailed and accurate records of genuine buyers. One of these buyers may be perfect for your home.
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Mistake 8 - OPEN LISTING
The more agents you employ the lower will be your price
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 agents will be in a hurry to sell your home before another agent sells it. The sale will be most important. The price will be forgotten. Buyers shop around. They will use the agent who can obtain your home at the lowest price. Test this yourself. When you see one home with several agents, call them all and ask this question: "What is the lowest price I can pay for that home?" You will be told different prices. The agent who suggests the lowest price is the agent who will be most likely to sell your home. The same situation happens with 'multi-list'. Choose one agent, one you like and trust.
Mistake 9 - AUCTION
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 lowest price! It is the minimum you will accept, under pressure. Auctions are needless pressure. Many buyers who buy at auctions openly admit they would have paid more. Don't focus on the lowest you will accept. Focus on the highest you want. 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 10 - OPEN INSPECTIONS
They are dangerous
They are an invitation to thieves who will return later. Do not allow anyone into your home unless your have two assurances: 1) they have been identified; 2) they are interested in buying it. It is amazing: a person needs more identification to rent a video than to stroll through a family home! Do you really want dozens of strangers opening your wardrobes and inspection your private possessions?! Insist on your security. Protect yourself, your home and your possessions. 'Sticky beaks' and thieves will not buy your home. Only buyers will buy. Therefore, only buyers should inspect. And do not restrict genuine buyers to one or two hours a week. Allow these people to inspect anytime. Do not allow others to inspect at any time! Be aware that your home may not be insured when you hold an open inspection. The Police Service will offer you similar advice. Please, never open your home for public inspection.
Mistake 11 - FOR SALE SIGN
No sign can mean no sale
"The buyers who are most likely to pay the highest price will spcifically want your location."
A sign attracts these buyers. It is your 24 hour salesperson. It is often your best salesperson. Be careful. Some people will knock on your door. Insist they call your agent. Trying to negotiate yourself could cost you thousands of dollars. For Sale Signs also atrract other agents, those who are too lazy to find their own homes for sale and those who lack ethics. If other agents approach you, send them packing no matter how may times they tell you they have a great buyer. These agents are the worst in the industry. If they will 'steal' other agents' clients they will almost certainly deceive you. Do not speak to the unethical agents who approach you from a For Sale Sign.
Mistake 12 - CLOSED AGENT
Closed agents lose buyers
Make sure the agency you choose is open seven days. Many agents work 'nine to five' and close on Sunday. You need an agent who is available to buyers. Weekends are especially important. You never know when the perfect buyer will come along. And that buyer will buy from the agent who is open. The best agents offer a 7 day service. They are always prepared to work on your behalf.
Mistake 13 - NO NEGOTIATION SKILLS
Poor negotiators will cost you a lot of money
Negotiation skills are vital to ensuring you get the hightest possible price. There are several Principles of Real Estate Negotiation. Ask an agent to quote some to you. You will soon discover who it 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.
Mistake 14 - 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 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 "re-locating". Don't let the reason you are selling your home be the reason you receive a lower price. Your reason for selling is confidential.
Mistake 15 - USING A BAIT PRICE
Bait Prices Trap Sellers as well as Buyers
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. Your 'bait' price will 'hook' you more than the buyers! Sure, 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 16 - 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 buyers. A good example is a swimming pool. It may cost you $25,000. Yet, it is worth nothing to buyers who do not want a pool. 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.
Mistake 17 - 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 18 - IGNORING EARLY BUYERS
High prices often come early. Low price 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.
Agents who say it may take many weeks to find a buyer are admitting that they are inefficient - or they are failing to tell you the truth about the value of your home. They know your home is priced too high and they have to talk you down in price. The purpose of advertisements and massive numbers of inspections is seldom to "search for buyers" - the buyers are already in the area - it's to "condition" you with lots of visible activity. This activity damages 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, your should consider selling sooner rather than later. How many times do you hear of sellers having their home 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.