Most people don’t realize that much of the battle surrounding selling a home focuses on anticipating potential problems. This is a major milestone in your life and is difficult because there are various steps involved.
There are common mistakes people make when selling their homes, and the consequences they suffer could affect their peace of mind and finances. Using an investor is a wise choice because those companies buy and sell many properties each month. Sellers have an alternative to the uncertainty they face with a traditional sale.
Here are some of the most common mistakes you should avoid when selling your house:
Underestimate the Cost of Selling
Many homeowners only think about the agent’s commission, which in most cases can be anywhere from four to six percent of the total cost. However, you may have to make repairs as well as pay closing costs and other concessions, so many times the costs could be closer to 25 percent.
If you move into a new place before selling the old one, you might be required to pay both mortgages or rent on top of the house. Other costs can include storage fees, taxes, HOA dues, and utilities.
When you sell to an investor, there are no hidden charges. You know exactly what it will cost and how much you will profit from the sale. This can help you determine what you can afford for your new place.
Making Costly Renovations or Ignoring Major Repairs
Do you have a long list of issues relating to the house? This can turn off buyers and may even lower the home’s value. Plus, buyers generally expect the description of the property to match the condition they see it in.
You should always prioritize glaring issues, especially those that will probably turn up during home inspections. Remember: most buyers require an inspection before closing the deal.
During home assessments, we often look for broken items, things that are in poor condition, and areas that might affect functionality, structure, and safety.
Sometimes, sellers focus on improvements and renovations to up the price. However, they can be costly, and you might not recover the cost within the purchase price. Likewise, buyers might want to personalize the home to meet their needs, so be careful with renovations to add value to the property.
Consider Only the Highest Offer
Generally, the highest offer is exciting, but it’s not always the best choice for your needs. Traditional sales often come with contingencies. These conditions have to be satisfied before the sale closes. Typically, they’re used to protect the buyer and can include things like inspections and financing options.
You should be aware of such contingencies because they could impact the sales complexity, certainty, and timeline. For example, you could receive an exceptionally high offer, but it’s contingent on the buyer first selling their current home.
Weigh the pros and cons of that scenario. You could wait months for the buyer to sell their property and must continue maintaining the one you’re selling. Therefore, it could be better to go with a lower offer that doesn’t include that contingency.
Here’s another scenario: one buyer might be more flexible on repairs and offer a lower price. The one who will pay more wants you to take care of the repairs. Which one is right for your situation?
Set an Unrealistic Price
The market determines prices, so what you want from the property could be much lower. Fair Market Value is how the house is valued when the seller and buyer are knowledgeable about the property and aren’t under pressure to buy/sell.
Overall, it’s a sweet spot for the seller to ensure that they don’t ask for too little or too much. However, you might have your house sitting on the market for long periods or get less than you could have if you don’t hit that Fair Market Value number.
You’ve probably got a general idea of what your home is worth based on similar options that have sold in your area. Comps, as they’re called, are what most agents use to produce a listing price. However, no two properties are exactly the same, and there are differences you should account for. It’s hard to make adjustments yourself.
Investment companies use valuation models to compare various features within comparable homes. That means we can make a better offer based on market data and information from the sellers.
Most home sellers want the process to be painless and smooth. It’s overwhelming to think about the many things that could go wrong, but knowledge is your friend. You’ve learned about some of the most common mistakes to avoid and are now more confident that you will do things right.
Generally, one way to avoid the mistakes discussed earlier is by selling to an investor like Falcon Home Buyers. We help you avoid the uncertainty and stress of traditional selling because we take care of everything.
This article is meant for informational purposes only. We always encourage you to consult with a professional advisor regarding your situation.