It continues to amaze me why some sellers bother to list their property for sale when the probability of the house selling is slim to none.
The past few weeks I have been showing a variety of homes to different clients. About half of the homes we previewed are in fair to good condition and reasonably priced. The other half was a waste of time. Some homes were over-priced, some in poor condition and some really trashed. I find it interesting that agents would idle away their time and money, marketing a property that is clearly not going to sell. I often walk away from a home-showing, shaking my head in disbelief to the mistakes the seller and the listing agent are making. In frustration, I decided this week’s column would focus on the worst mistakes sellers make.
A home for sale seldom gets a second chance to make a good first impression. Listing a home before it’s ready usually does more harm than good. It’s a common mistake I find when previewing new listings. Yes, I understand that everyone is anxious to get the sign up, take pictures and get the listing into the MLS. After all, no one wants to miss an opportunity. However, new listings attract the most interest from agents and their buyers and the largest number of showings during the first few weeks on the market. If the home shows well there is a chance it will attract an offer. But if it doesn’t show well, those showings were wasted opportunities.
Sellers and their agents should resist the temptation to list the property before it is cosmetically ready. Paint it, clean it and clear out the clutter first; then take the pictures and put on the lock box. The home’s appearance is initially more important than its price. Home shoppers must be attracted to the home first before they seriously consider making an offer.
Another big mistake sellers make is pricing the home based upon what they need. Most sellers have a pretty good idea what their home is worth prior to contacting an agent. They preview homes advertised on the Internet or in the newspaper; they ask for a zestimate from Zillow; they see what other homes have been selling for in their neighborhood. Then they call their agent and ask, “What do you think my house is worth?” After assimilating all this pricing information, some sellers still base their listing price on what they feel they need to net from the sale rather than what buyers are paying for similar homes. If a home isn’t priced within 3 percent of its likely selling price most buyers will pass on making an offer.
Waiting until escrow is open to perform the most common property inspections is asking for trouble. Sellers should prepare early for the property inspection buyers will request once in escrow. If their listing agent has concerns about the condition of one of the home’s systems you can bet the buyers and their agents will have the same. Pest inspections, roof, well and septic should be obtained before the home goes on the market. Any issues discovered can then be addressed early.
Failing to disclose or attempting to cover up property defects is another big mistake. In our current market, many financially distressed sellers conveniently forget to disclose the home’s true condition. They mistakenly believe that by inserting the sentence “This home is sold in ‘as is’ condition” into their purchase contract, it will relieve them of any legal disclosure obligation. Not so. Most property issues get discovered eventually during the inspection period. What actually happens is when the buyer discovers one non-disclosed issue they look more thoroughly at the rest of the house or worse they become suspicious of the deal and walk away.
If you can’t show the home you can’t sell it. I was making a showing appointment the other day and nearly 20 percent of the homes that my client had specifically requested to preview were inaccessible. Some homes were rentals and had tenants, other homes had restricted hours or days that the property could not be shown. A few required appointments with the seller and one where the listing agent had to be at the property. In a different market I may have made the effort to coordinate my schedule, my client’s schedule and the seller’s or his tenant’s schedule to arrange a showing but with so many similar priced homes for sale I avoided the homes with scheduling issues.
Selling a home is inconvenient. It’s living in a fish bowl. Regardless, sellers are making a big mistake by not having the home easily accessible. Landlords should wait until their lease expires and their rental is vacant and clean before listing the property for sale. Tenants are usually unhappy that the owner is selling and often point out the property’s shortcomings to a prospective buyer. A vacant rental will usually sell faster, and for more money, than one occupied.
This is the most difficult market for sellers since the Great Depression. Homeowners should seriously consider all alternatives before deciding to be a participant. Once an owner makes the decision to sell, they must aggressively compete for positioning among REOs and short sales. There can be no mistakes.