Top 10 Mistakes
Serious about selling your home? Before you sign anything, read about these common mistakes that home sellers make:
1. PRICING TOO HIGH: It’s no secret, price is everything. Overpricing does more to discourage buyers than any other single factor. When you overprice, you put your home in competition with homes that may be newer, larger or have more amenities than yours. You help your competition sell their home. This leads to long days on the market, and costs you, the seller, money in the long run. Make sure you get your pricing advice from a professional agent who knows the market.
2. POOR CONDITION: A home that is in ill repair, or otherwise poor condition, does not excite buyers. A home like this is looked at by buyers as a work project and money pit. Having your home in good repair and great showing condition will significantly improve your chances for a sale at top dollar value. Having your home pre-inspected by a termite and dry rot inspector will also have a positive impact on buyers.
3. POOR CURB APPEAL: Most buyers today want to drive by. If your home is an attractive drive-by, it will gain more attention and certainly more showings. Doing the little things to help your home’s curb appeal will make a huge difference.
4. DREARY DARK HOMES DON’T SELL: Buyers like updated, light and bright homes. Dark carpets, paint, and curtains are often buyer turn-offs. Go through your home and remove clutter; touch up and update paint, counter tops, and carpets. Open your home up and make sure the sun shines in. Offensive odors from pets and smoking are also huge turn-offs to most buyers. Rid your home of offensive smells by burning scented candles and create a pleasant aroma. The most important rooms to concentrate on are the living room, family room, kitchen and master bedroom. Your entire home’s atmosphere is set off by these rooms.
5. DON’T OVER-IMPROVE: Get your home in good showing condition, but don’t over do it. Huge projects such as complete remodels of kitchens, adding decks, and expanding room sizes may not pay back your investment. Before you jump into a huge improvement project, get some good advice.
6. BE FINANCEABLE: Bad roofs, exterior paint, or structural problems may make your home un-financeable. The wider the scope of financing that your home can qualify for, the higher the overall market value. Remember — government programs like VA and FHA will be the most picky.
7. GET GOOD ADVICE AND GOOD MARKET EXPOSURE: Hiring a professional agent will help you get your home priced right, and will also get you started with the best fix ups. A strong agent will get your home exposed to the largest number of potential buyers. Paying the agent fee is often the least expensive part of selling your home. Trying to sell your home yourself can be costly. Most ‘for sale by owner’ homes close for less than comparable homes listed with an agent, and you have no representation.
8. DON’T BE PRESENT DURING SHOWINGS: When your home is being shown, go for a drive or a walk. Take yourself, your family, and pets and let the agent and their clients have the freedom they need. An agent can always do their best job of showing your home when you are not underfoot. Buyers are more at ease and much more likely to spend time looking at your home’s features and benefits.
9. LET YOUR AGENT DO THE NEGOTIATING: If there is ever a good reason to have a veteran agent working for you, it’s during the negotiation of your home sale. A good negotiator can mean thousands of dollars to you, and will protect your interests. Don’t let your emotions run wild during negotiations. Try to separate your emotions from your business side. Remain cool and calm during this time.
10. ACT FAST WITH OFFERS: When you do get an offer on your home, act quickly and decisively. Letting offers sit around without acting can be a huge mistake. Things can change quickly in the mind of a prospective buyer. Acting quickly while the excitement and interest level are at a high point can be very important. Typically, a buyer’s motivation level decreases with time. Buyers’ remorse can even set in. Acting in a timely manner is essential.
What Is A CMA?
CMA
This is the most commonly used of the three approaches in residential real estate.
Formula: Comparables plus or minus adjustments equals Appraised Value.
The property we are trying to determine the value of is called the subject property.
When using the comparable approach we start by establishing what the subject is and has. A two story home that has a 1,000 Sq Feet on the main floor, second floor and the basement, giving a total of 2,000 feet above grade and 1,000 below grade.
Then how many bedrooms, bathrooms… Then there are amenities, this is the tricky part for sellers. What may be an amenity to one person may not to another.
For example, being two doors from an elementary school is great if you have three elementary age children, but it doesn’t mean much to an empty nester. Same thing goes for a swimming pool, perfect for one and not the other.
The three main criteria an appraiser uses when comparing is
- Date of the sale of the comparable. 6 months is as far as an appraiser likes to go back, then they will adjust for time. Then the market condition comes into play. Which way is the market going? Is there consideration for the season?
- The proximity of the comparable to the subject. An appraiser doesn’t like to go more than a mile, however this is where local expertise comes into play. An appraiser will use natural boundaries, like I-215. If the subject property is within a few blocks of a highway typically they will not go on the other side even if it is within a mile.
- Similarity of the comparable to the subject. Are they the same type of home? Two Story, Rambler, Tri-Level… Above grade footage to below grade footage. Comparing the location, for an example a property located on a busy street is hard to compare to a property two blocks away on the end of a Cul-de-Sac with a park in the back yard.
Once you have you accumulated your comparable sales then you need to go through the adjustment period.
***IMORTANT*** When comparing and adjusting. You never adjust the subject, you always adjust the comparable to be the same as the subject.
For an example if the subject is a 4 bedroom house and the comparable that sold had 5 bedrooms. Then you need to adjust the comparable down by a number that is pre-determined amount for a bedroom. Typically it is around $1,000. So you would subtract a $1,000 from the comparable to adjust it down to 4 bedrooms. Please note that the square footage is adjusted too. The same is true if the comparable had 3 bedrooms. You would add $1,000 to adjust the comparable from 3 bedrooms to 4.
This method is used all the way down the list of items to come up with an adjusted value. Here is an example of a CMA, the adjusted values are averaged and then that value is assigned to the subject.