5 Home Selling Mistakes Every Investor Should Avoid
By JD Esajian on May 4, 2018
Selling a property is very much like getting involved in a high stakes game of poker. If you play your cards right, you could be a big winner at the end of the day. However, if you let curiosity get the best of you it is easy to be left wondering what just happened. When selling a home it is critical that you look at the big picture. Of course, you want to sell for the highest amount in the shortest possible timeframe but not every home sells itself. By trying to squeeze every dollar out of the property you could end up doing much more harm than good. Here are five common home selling mistakes that every investor should avoid.
- Trying to time the market. Trying to time your local real estate market can be a dangerous game. Even though there are indicators and historical trends you never really know where the market is going to go. One change in the economy or with local demographics can completely alter demand, and ultimately home values. Instead of buying in the winter with hopes of listing in the spring or waiting for the market cycle to change you are better off listing as soon as you are ready. Quality properties will generate demand regardless of the season. By playing the waiting game you cost yourself in the short term by paying carrying costs. You also aren’t 100% certain that waiting will help improve demand and get the price you desire. There are times when timing the market works in your favor, but these are often a matter of luck than anything else.
- Relying on outdate marketing methods. There is no question that technology and marketing have changed dramatically over the past decade. Think about how we get through our day today compared to just ten years ago. Today, we are more reliant on technology and social media than ever before. If you aren’t using these to sell your home, you may be in for a very long wait. Enlisting the services of a real estate agent (we will get to this) is just a starting point for getting your property sold. Most quality agents use a mix of modern technology coupled with the MLS, open houses and personal contacts to help find a buyer. That doesn’t mean you can’t use your own personal tactics. Long gone are the days of putting an ad in the local paper and waiting for the open house. An open house can still be productive but should not be the only marketing you use. Every seller should take advantage of the reach of social media and use it to your advantage. The goal is to get your house sold, regardless of who finds the buyer. There are more unique ways to market your home than ever before, make sure you take advantage of them.
- Not using a real estate agent. Without question this is one of the most common mistakes sellers make. If you are rehabbing a property you will spend weeks, if not months, transforming it with the hopes of getting top dollar. You constantly review your budget and tirelessly focus on the bottom line. When it is time to sell you decide not to use an agent because you want to save a few points commission? Saving money and maximizing your revenue is always important but don’t walk over the dollar to pick up the penny. Even though we just said that you may be able to find a buyer using social media or though technology, a real estate agent has a handful of more effective ways. For starters, they have access to the MLS which reaches thousands of agents in the area. Not only does a good agent help find a buyer they know what to do during negotiation. This can often make or break a transaction and directly impacts the sales price.
- Pricing too high. In a perfect world you would list your property and wait for offers to pour in. In the right market at the right time this is certainly possible, but for the most part this is the exception rather than the norm. Long gone are the days of listing high, getting multiple offers and creating a bidding war leaving you with options to choose from. In today’s landscape by listing too high you immediately lose a large segment of prospective buyers right off the bat. They are not going to overpay when there are other options available. Instead of coming back when you eventually come to your senses and lower your price they will have moved on. Instead of creating demand and prompting a bidding war you will be forced to scramble to generate activity.
- Ignoring offers. Every offer is an opportunity. You should never get insulted with an offer that comes in. You may be disappointed, but don’t take it personally. An offer may be just the starting point in negotiation if you know how to play your cards right. If you are dissatisfied with the offer you should counter with a number that you are comfortable with. This may be full price, or just slightly off it, but you should always counter. There are many buyers who are simply trying to get a good deal and will always offer below asking price. Without countering you never know what they are going to do.
Your rehab work isn’t finished when you put your property on the market. You need to finish the job and get it sold. Always avoid these five problem areas with the next listing you have.