Common Mistakes Made By Home Sellers
1. Choosing a Real Estate Agent based on the lowest commission rate
“You get what you pay for”….isn’t it true ?
Would a good lawyer advertise for lowest fee ?
Would a well-known accountant charge lowest fee ?
Asking a real estate agent to sell your house for you is not like buying identical products.
If you ask three different agents to sell the house for you now, and assuming that they all have your house sold now, do you think they will all sell for the same price ?
The answer is “no”, and you know it.
The reason is, every agent is different, and the final sale price would be different, too.
If you have found a agent you believe is a good one, whether it was a referral, or from previous experience, and the agent is charging what most of them are charging in the neighborhood, this is a good deal for you.
2. Choose an agent advertising a lot.
People are attracted by advertising, especially those they see a lot. In a way, the consumers are being brain-washed.
Is a heavily-advertised realtor a good realtor ? It will depend on if most of his/her past clients agree to it or not, after unbiased research.
Referrals from friends and family is much more reliable.
Look under Testimonial: Panacci: The Panacci family bought and sold many properties before, and they had experience with different realtors. They listed a house of theirs with an agent ranked Number One with a well-known company in Canada, but were totally disillusioned after a few months. The husband told Leung sometime after that he would never list again with No. 1. They were attracted by the advertising done by the agent.
3. Selling real estate is a personal service, not buying from Walmart !
When a seller has listed the house for sale with a realtor, the realtor is the one constantly working with him/her, usually at the seller’s house, whether it is Open House, or showing the seller some recent sales in the neighborhood. The seller seldom even goes to the office of the agent.
Whether the agent can do a fantastic job for the seller, or a lousy job, is entirely on the agent himself/herself----not much with the company.
The same thing is true for lawyers and accountants, because it is a personal service.
So, what company the agent is with is not as important. That is why you see clients always follow their lawyer, or accountant, if they change company, as long as he/she is good.
So, in real estate, national big names are for name recognition by the consumers. Nothing much more.
Because it is not buying identical products from Walmart, you do not shop for the lowest price (commission). You shop for the BEST agent at competitive commission.
Look at Testimonial under Tassios. The sellers did asked realtor Alec Leung for a reduction on commission at the beginning. But after being explained why it would kill the incentive for the realtor(s) to do a good job for them (selling for the highest possible price), they agreed to keep the competitive rate that most of the sellers were paying in the area. By the time the property was sold, it was sold for $25,000 more than an active agent quoted them before. It was 8.3% more ! Leung did not even ask for more on commission rate-----only what most of the sellers were paying-----an average commission rate.
4. Choosing a realtor not from the same area.
Many sellers had important priorities when choosing a realtor to work with. They could be friend and family who is a realtor, a big name he/she recognize, low commission rate charged by one particular agent, etc. But they forgot something important: the realtor should be an active one in the same neighborhood. How about if a purchaser happened to see the For Sale sign, and wanted to see the house right away, and the realtor cannot even doing it because he/she is NOT from the same area ? What about if a buyer asked the realtor who was the builder building that house 10 years ago ? If the agent is not from the same area, he/she is not likely to give a correct answer to an important question.
5. “My home is the best”
It is understandable that we all feel our home is the best, because we are emotionally attached to it.
Buyers when shopping for a house, they are less emotional. They compare values.
However, there are always some other houses better than ours, or worse than ours.
If the house has been on the market for a reasonable time, and yet still not sold. Chances are, there are others in the neighborhood got sold, and obviously a better buy.
So, sellers need to be realistic in the value of their homes.
6. Feeling obligated to hire a friend or family who is not active in the neighborhood.
Unfortunately, many people feel that way. When it comes to selling a house, it is a business. What if, the agent felt that he/she needs to list the house at a price his/her family is happy with, only to find out later that it was too high, and never get sold. Who the seller will blame ? You better believe their agent ! Now, family and friends do not talk to each other.
Another reason many home sellers avoid using friends and family is that, for example, they do not want their friends or family know about their personal finance, ie. how much they owe to the bank on their mortgage.
7. The house is not prepared for sale yet.
Many home owners do not understand the importance of the appearance of the house.
New home builders spend tens of thousands of dollars to decorate the model home. And yet, the buyers are buying the shell of that model home. But they are attracted by the professional work of the interior decorator.
To prepare the house for sale, the owner need to:
8. Unrealistic pricing.
A lot of time, what a home owner put into the house is good for him/her to enjoy. But he/she might not be able to get back the money when it comes to selling. It certainly depends on the market at that time. If the market is strong, and prices are going up, the owner has a better chance of getting the money back on the house improvement, ie. a finished basement, a new kitchen cabinet, or a new house paint. If the market is weak, it is less likely the seller can get the money back on its improvement. It certainly depends on how long ago the renovation was done. The longer it was done, the more likely the seller can get the money back, because real estate usually go up in value in a long run.
9. Not allowing enough time to sell it
Usually, it is wise to allow yourself about 3 months to sell a house.
Certainly, there are special circumstances that make a house owner to put it up for sale, ie. financial difficulties.
Having limited time to sell means the owner is under pressure, and it could end up getting a lower price.