This 2-part series looks at the 11 Worst Mistakes Sellers make when selling their home . . .

So you’ve decided to sell your home. Selling a home is stressful enough. There is a lot of “behind the scenes” action taking place that you may not know about. Contrary to public perception, your listing agent does not usually attempt to sell your home to individual home buyers. That wouldn’t be a very efficient process.

Your listing agent markets and promotes your home to the other local agents who work directly with home buyers. This dramatically increases your personal sales force. During the first couple of weeks your home should be a flurry of activity with buyer’s agents coming to preview your home so they can sell it to their clients…

Unless these mistakes are being made. . . .

7. Wait too long to get to the right price.

When you drop your price, your house is “old news.” You will never be able to recapture that flurry of initial activity you would have had with a realistic price. Your house could take longer to sell. Once your home sits on the market awhile, it is harder to get a good offers. Potential buyers will think you might be getting desperate, so they will make lower offers.

8. They don’t take the first offer as serious as they should thinking they will get something better.

It is human nature for you to want the highest price for your home. In a buyer’s market, you’ll need to determine what is most important to you–price, moving date, keeping the appliances–and get the best deal possible.

That said, the first offer is frequently the best offer, so don’t be unreasonable.

9. They try to improve the property instead of lowering the price.

Smart sellers will weigh the cost of proposed improvements against the home’s market value after the repairs or upgrades are completed. If an upgrade won’t return the investment, such an improvement might not be warranted. And keep in mind, if your home is already overpriced, more improvements won’t necessarily bring the home value up in your market.

10. Focus on who is right or wrong vs. getting their home sold.

If your home isn’t selling, it’s easy to get into a battle of wills over who is right or who is wrong. It doesn’t matter what you want for your home, it only matters what someone is willing to pay for it. Every buyer wants a good deal, and every seller wants top dollar. Realtors have to walk a tight rope to balance things to try and achieve a win-win for both buyers and sellers. For example:

If you had just 6 weeks to sell your home, and you got a reasonable offer in week 3 or 4, wouldn’t you take it? Or would you risk having to pay double mortgage payments, or live apart from your family for months, etc. to POSSIBLY make 3% more? (knowing also there is a possibility you would get less). The goal is to get your home sold.

11. Try to find their next home before they sell their current home – cart before the horse.

Imagine you found the home of your dreams.  You’re all ready to move in.  The problem is you still have to sell your old place otherwise your stuck paying on two properties!  By selling first it helps ensure that you can afford the new house on time without worrying about extra mortgages to cover yourself.  Also, if you buy a home first you will most likely put a bit into the contract that says you have to complete the sale of your old place before you close on the new home.  This helps protect you from being stuck with two places.  But it doesn’t make you an attractive buyer either!

This 2-part series looks at the 11 Worst Mistakes Sellers make when selling their home . . .

So you’ve decided to sell your home. Selling a home is stressful enough. There is a lot of “behind the scenes” action taking place that you may not know about. Contrary to public perception, your listing agent does not usually attempt to sell your home to individual home buyers. That wouldn’t be a very efficient process.

Your listing agent markets and promotes your home to the other local agents who work directly with home buyers. This dramatically increases your personal sales force. During the first couple of weeks your home should be a flurry of activity with buyer’s agents coming to preview your home so they can sell it to their clients…

Unless these mistakes are being made.

1. You overprice your home in an attempt to get the best price and by doing so actually end up selling for less.

If you and/or your agent have overpriced your home, fewer agents will preview your home. They are Realtors, and it is their job to know local market conditions and home values. If your house is dramatically above market, they will not waste their time, preferring to preview homes that are priced realistically. If you do successfully sell at an above market price, your buyer will need a mortgage. The mortgage lender requires an appraisal. If comparable sales for the last few months and current market conditions do not support your sales price, the house won’t appraise. You deal falls apart. You can always attempt to renegotiate the price, but only if the buyer is willing to listen. Your house could be forced “back on the market” at a lower price. Price it right the first time.

2. Hire the wrong agent believing every agent is created equal and they all do the same things.

The real estate profession is constantly changing and the best real estate professionals stay on top of those changes by continuing their education. Look at more than one agent’s presentation and consider the advantages and disadvantages of each. Inquire about “professional designations” that show they have taken additional specialized courses. Making an impulsive decision when caught up “in the moment” could be difficult to correct later. You will normally contract to list your house with the agent for a specific period of time. If you find yourself unhappy with the service you receive, you may find yourself unable to “switch” to another.

3. They wait to sell thinking the market will be better if they wait.

There is no “single” answer to this predicament but there are certainly things to consider. The housing “market” is really a series of hundreds of local “markets” made up of thousands of neighborhoods, so current market conditions vary widely from place to place. A good real estate agent will be able to tell you honestly if inventory is rising faster than buyers are appearing in your area. Consider that other would-be sellers may be holding off as well, waiting for an upturn in the market. This delayed selling may introduce still more inventory on an already sluggish market. Keep in mind that in any housing market there is always a buyer — if the price is right. One reason houses aren’t selling well in some areas is that some sellers are waiting for prices to recover and are unwilling to acknowledge that they may have to settle for a little less.

4. Don’t get the home in showing condition.

A potential buyer has made up their mind ten seconds after they step in the front door.  They were already forming an opinion as they pulled into your driveway! That really doesn’t leave too much room for fault. To achieve the greatest possible outcome, a home should always be presented at its best the first time around. Properties in prime condition are a pleasure for real estate agents to show, so they get shown more often. The more exposure a property gets, the better the chance of selling it quicker and for a higher price. Buyers pay a premium for a home that is in top-notch, move-in condition, so once you decided to sell, make sure the home is ready to be sold.

5. Do the wrong updates or upgrades to ready a house for sale.

You have to discover what needs to be done to your home. A thorough property inspection up front will help to identify problem areas. Any buyer will have a property inspection done before closing the sale. Most often, this is when they will re-negotiate the price because of any problems that may turn up in the inspection. Having your own inspection done and making all necessary repairs first removes this opportunity for the buyer to try and re-negotiate. This also reassures potential buyers that you are conscientious homeowners and will relieve some of their anxiety about buying a home.

6. Hire agents for the wrong reason.

A snap judgement isn’t good. You must do your homework! Determine if the agent is competent and the best way to do that is to check up on references. Ask for references on recent sales — check up on references of recent customers. Find out how an agent’s customers feel about their selling experience. Some agents tell you what

you want to hear to get your listing but then fail to deliver. Use tough standards when selecting an agent, just as you would when hiring an attorney, a doctor, or an accountant to handle your taxes. The wrong agent will ultimately cost you in time, money and a lot of stress.

Stay tuned for Part 2, on February 3rd, 2010 . . .

That’s an interesting thought, spurred on by the number of conversations I have on this very topic every week. The number of conversations seems to be increasing the last couple of weeks, as people looking at real estate in Milton Ontario, Mississauga, and Campbellville become confused with what is happening out there.

You see, the Main-Stream Media (MSM) has spent so much time and effort fuelling the doom and gloom, and has only just started reversing their story, about 6 months behind what I have been reporting, that the public is only just beginning to catch up with the real reality. As opposed to the reality the MSM has tried to create about the real estate markets in the GTA.

You have to be careful when believing what is being reported by some media giant, and they are all equally bad, because they do no

t have specific data, relevant to your immediate area, updated weekly. Perhaps more importantly, media like The Star, National Post, and The Globe & The Sun, do not have the local expertise to provide real, on-the-ground information with local interpretations of the data.

There’s one part of the key – ‘on-the-ground with local interpretations of the data‘. On my main real estate site, AllMiltonHomes.com, I have an Internet Warning:

REAL ESTATE INTERNET WARNING: Despite advertising claims to the contrary, the Internet is not an experienced Real Estate Professional. It cannot consult, counsel, advise, have knowledge of local laws and market conditions, make judgements, ‘own’ the result, or most importantly, understand your individual goals and needs and care about you as a Client. To obtain an accurate interpretation of any information  you obtain online, please contact us.

To me, this pretty much sums it up – data is worthless in the absence of skilled interpretation.

So, on to the subject of this post – are rising house prices better for buyers or sellers? Would a better question be “are rising house prices good for anyone?”

Let’s look at it from a seller’s point of view – when prices are rising, the value of your present house goes up. That’s great if you are in the segment of the market that is down-sizing, and it’s also great if you are relocating to a less-expensive marketplace. However, it is not so great if you are moving up in the same general marketplace. Let’s suppose your present house is valued at $400,000, and prices go up by 10%; that would make your house worth $440,000, which is pretty cool. However, the other side of that is, if you are like the average move-up buyer, you will be spending 30% to 50% more on a house, which means that the $550,000 house you were thinking of buying is now going to cost you $605,000. So, your current house went up $40,000, your new house went up $55,000, with the net result that you lost $15,000. I’d say that rising prices are not so good in that situation, wouldn’t you?

What about looking at things from a buyer’s point of view? Well, that’s a pretty simple conclusion – the more prices rise, the more a house costs you, so it can’t be a good thing, right?

Hmmmmm. So, if rising prices aren’t good for sellers or buyers, why is it that the real estate buying and selling public historically act against their best interests? To understand that thought better, look at the ‘feeding frenzy’ that was the real estate markets for most of the first 2/3rds of this decade – the faster houses were selling and the faster prices were rising, the more buyers their were competing for them. Now, when prices are, in general, lower and houses are, in general, taking longer to sell, there are less buyers out there and less sellers out there. Hmmmm.

So, where are you in the real estate market? Buyer? Seller? Are you active in the market right now? Why not? Let’s talk about it.

46. Be Honest in Your Disclosure
When selling a property, you are required to disclose any potential flaws associated with the property. If you are not honest in your disclosure or if you try to hide things from the buyer, you could end up losing the sale, or worse, losing money in court after a sale goes through. If you are unsure about what needs to be disclosed, speak with a real estate lawyer who is familiar with the disclosure laws in your state.

47. Stage Your Home for the Appraisal
Buyers will be required to get an appraisal before they can be issued a home loan. You should stage your home for this appraisal just like you would for a showing. The more money the house is appraised for, the more likely the borrower will be to get approved for the loan and go through with the purchase.

48. Get More Exposure
If you have done everything you could to sell your home and you still haven’t achieved a sale, you might not be getting the kind of exposure you need. If people don’t know that your house is for sale, you have little chance of selling it in a timely fashion. If you have a real estate agent, make sure they are actively trying to sell the home. If you are working without an agent, advertise everywhere you can and then have an open house to attract potential buyers.

49. Use Feedback to Make Improvements
If you are getting potential buyers but no offers, you will need to find out what the problem is. It might be the price, it might be the layout of the home, and it might be the size of the yard. Whatever the common complaint is, you can use it to your advantage and make the desired improvements. The feedback you receive may turn out to be just what you need to sell on your terms.

50. Add a Fresh Coat of Paint
A fresh coat of paint can work wonders on everything from walls and ceilings to fences and shutters. Because painting is so inexpensive, it is one of the best ways to improve offers without spending a lot of money upfront. Just remember to keep things light and neutral. Some buyers shy away from bright, bold, or dark colors.

41. Be Willing to Negotiate with Buyers
The offers you receive from buyers may be well below the asking price of the home. Instead of responding to an insulting offer with a flat out refusal, negotiate. You don’t have to drop the price significantly, but you can come down by $1,000 and give the buyer another opportunity to evaluate the offer.

42. Pay Discount Points for the Buyer
If you don’t want to come down on the price, there are other things you can do to sweeten the deal for the buyer. One thing in particular involves paying discount points on the buyer’s home loan. A few thousand dollars out of your pocket can lower the buyer’s interest rate and make them eligible for a nice tax deduction. In this scenario, everyone wins because you get

your asking price and the buyer gets lower mortgage payments through the life of their loan.

43. Pay the Buyer’s Closing Costs
Homebuyers, especially those making a large down payment, often have a difficult time paying closing costs on their home loan. If you want to give the buyer an extra incentive to purchase your home, you could offer to pay the buyer’s closing costs. On average, it costs between $2,000 and $4,000 to close on a home loan. While this may mean an additional out of pocket expense from you, it could be all the incentive a buyer needs to choose your home over another.

44. Offer the Buyer Extra Incentives
Homebuilders who want to unload inventory quickly offer special incentives to attract and sway buyers. These incentives include everything from offers to pay condo fees to cash rebates paid out after purchase. You can use similar marketing gimmicks to get buyers excited about your home.

45. Compare Offers Carefully
If you get more than one offer on your home, you will want to compare these offers carefully before making a decision. Keep in mind that purchase price isn’t everything. Other items to consider include the buyers’ financial qualifications, contingencies within the purchase agreement, and clauses that favor the buyer.