It can be tempting to take shortcuts, but you will find that doing it the correct way will always give you the greatest amount of benefits and the least amount of headaches!
Whether you are already in the process of preparing your home to sell or are starting to think about the process in the long-run, you will want to make sure to avoid these common real estate mistakes:
Testing the Market:
It can be tempting to “test the market” or “premart your home” before hiring a listing agent. People see selling their homes by themselves as a way to save on commission fees. Because of the fast moving digital world we are in today, the market and history of a home make a big impact on the final price a home will sell for.
Here are some common situations that may result in buyers overlooking your home thinking that something is wrong with it:
- If you list your home at the wrong price, and it sits on the market for more than a few weeks
- If you put photos of your home online that don’t depict it in a good light
Both of these scenarios will ultimately cost you time and money.
Making Big Repairs:
The biggest and most costly mistake is assuming that you need to make big improvements or repairs in order to sell your home. There are very few improvements to a house that yield a 100% return on investment, so it’s important to really understand what is optional versus what actually needs to be completed. A quality listing agent will walk you through the comparables in your area, understand what buyers are looking for and be able to help you focus on the right repairs and updates to get the most out of your sale.
Not Considering the Impact of Taxable Income for the Year:
This comes into play when you have lived in a home for less than 2 years. This also happens if a home is an income property that could be considered taxable income. It’s important to discuss any property sales with your Accountant, CPA or financial planner, so they can help you understand what taxes you may owe and if there are any options that allow for you to reduce your tax burden. For example, if you are selling one investment property for another investment property you may be able to utilize a 1031 exchange or hold your real estate within a trust or IRA to eliminate or reduce your tax liability.
Not Considering Clouds in the Title:
All debt, including collections, unpaid back taxes, unpaid child support or unpaid construction liens attached to your home’s title will need to be paid (or have an acceptable payment plan in place) in order to sell your home and provide the clear title to the new owner. Your current mortgage, HELOC or other property secured loans will be paid off at closing.
It’s important to know what these total balances are so that you can accurately gage the offer amount that you will need in order to clear title and make selling worthwhile for you.
If you’re not sure of debts, your local title company should be able to verify this with a preliminary title report search. Your real estate agent should be able to help you connect with a local office that can provide this for free or at very low cost to you.
Not Disclosing a Probate, Co-Owner or Trust:
In order to convey title of a property, all parties that have legal right to the property must be willing and able to sign the title and closing documents to transfer title.
Once an offer is accepted the title company will run a preliminary title report and they will ensure that anyone who has a legal right to the property has either relinquished their rights or are the signing parties on the sales agreement and on closing documents.
If you are not positive about your ability to sell, your real estate agent and a local title company can check to ensure that you have the ability to convey title.
Hiring the Wrong Listing Agent:
The majority of homeowners hire the first agent they speak with. The agent you hire can make a huge impact on:
- Your stress level through the sale
- The exposure your home gets on the market
- Your representation/ advice during negotiations
- The profits you will make on your home sale
While you may be able to research in advance and get lucky enough to meet with a great agent right away, it’s well worth your time to at least interview 2-3 listing agents. Every agent manages their business, communication, time and marketing differently so even in a hot market like we’re in now it’s important to be confident in who you hire and understand what you will get for the commission you are offering.
Hiring an Agent Who Doesn’t Know Your Area:
Real Estate Agents are licensed by the state, however marketing is hyper local. It’s essential to understand the city, neighborhood and sometimes the subdivision your home is in. This can make a difference in pricing and marketing a property efficiently. These nuances can be hard to see in housing data if the agent you hire is not very familiar with your subdivision, suburb or or your city.
Not Allowing Access to Your Home for Showings:
The marketing of your home can only reach so many buyers and ultimately most buyers need to be able to walk into a home and tour it in person to feel confident and comfortable enough to make a great offer. Typically home showings are 30-60 minutes and many buyers prefer to look at homes on holidays, weekends and after work hours. While it’s never fun to have to be away from home at these times, making plans to be away from home during those times will ensure your house gets the most exposure to interested buyers. Be sure to ask your listing agent how they manage these showings and see if you will be responsible for coordinating these appointments. The first weekend or week on market is typically the perfect time to take that vacation you’ve been needing.
Taking Fixtures and Appliances:
Our Oregon Real Estate sales agreement allows the seller to exclude fixtures or to include personal property in the home as part of the sale. A fixture is anything that is attached to the home, like built in appliances, shelves, light fixtures… If you have a fixture that has sentimental value or that you would like to keep it’s important to review these with your agent when listing your house. When you accept an offer it’s important to ensure that these items are listed as exclusions.
Personal property is anything in the house that is not attached like free standing appliances, furniture and all your personal property if the house is occupied. It’s important to review if any personal property is included in the offer, and if you do not want it to be included that it be adjusted in writing. If you are interested in selling your home, make sure to get a Free Market Assessment here: Free Market Assessment