3 Home Seller Mistakes That Can Cost You Money
Selling a home is a big financial decision, so naturally, most sellers want to walk away with as much money as possible. But sometimes the things sellers do because they think they'll save money or make more money can actually work against them.
As a Realtor in the Tampa Bay area, there are three mistakes I see sellers make that can make a home harder to sell, reduce the pool of potential buyers, or ultimately cost the seller money.
1. Overpricing: One of the Most Common Home Seller Mistakes
This is one of the most common conversations I have with sellers.
The thinking usually goes something like this:
“We really want $500,000, so let's list it at $525,000. That gives us room to negotiate.”
It sounds logical. The problem is that buyers don't necessarily look at it that way.
A buyer whose budget tops out around $500,000 may never seriously consider a home listed at $525,000. They may assume it's simply outside their price range.
That means the buyer you hoped would negotiate with you may never make an offer at all.
Your list price isn't just a starting point
Your asking price also affects how buyers find your home.
Buyers often search for homes within specific price ranges. Pricing above an important search threshold can potentially put your property outside the results being viewed by buyers who might otherwise have been interested.
And when a home sits on the market because it's overpriced, another problem can develop: buyers begin wondering why it hasn't sold.
That's why your pricing strategy should be based on the current market, comparable sales, competing inventory and buyer behavior—not simply the amount you'd ideally like to receive.
2. Refusing to Make Recommended Repairs or Prepare the Home for Sale
Not every house needs major renovation before selling.
In fact, I generally don't want my sellers spending money unnecessarily.
But there's a big difference between avoiding an expensive remodel and ignoring relatively inexpensive issues that could make the property show better—or create problems once a buyer is under contract.
Sometimes sellers tell me:
“The buyer can fix that after they buy it.”
They can. But they may also decide they don't want to buy it.
Buyers don't always calculate repairs dollar-for-dollar. A relatively small repair can make a home feel poorly maintained, and that perception can affect how buyers view the rest of the property.
There are also certain issues that may affect a buyer's ability to obtain insurance or financing.
Here in Florida, for example, a buyer may need a four-point inspection for homeowners insurance. The inspection generally looks at four major systems: the roof, electrical system, plumbing and HVAC.
If I see something before we list that is likely to become an issue later, there may be a good reason I'm recommending that we address it now.
The goal isn't to make the house perfect.
It's to remove unnecessary obstacles between listing the property and getting it successfully to closing.
3. Focusing Only on the Cost of Buyer-Agent Compensation
Another decision sellers need to consider is whether they are willing to offer compensation toward the buyer's real estate representation.
Sellers sometimes look at this strictly as an expense:
“Why should I pay anything toward the buyer's agent?”
That's a reasonable question to ask. But it's important to consider the issue from the buyer's side as well.
Many buyers are already bringing substantial cash to closing for their down payment, closing costs, prepaid expenses and other costs associated with purchasing a home.
If the buyer is also responsible for paying some or all of their agent's compensation out of pocket, that becomes another expense they have to account for.
For some buyers, that won't be a problem.
For others, it may affect whether purchasing a particular property is financially workable.
That doesn't mean every seller should make the same decision about buyer-agent compensation. Compensation is negotiable, and sellers should discuss the options and potential consequences with their agent.
The important thing is to understand that the decision can affect more than just the seller's closing statement. It can also affect the economics of the transaction for potential buyers.
Why Hire a Realtor If You're Going to Ignore Their Advice?
This is really the bigger point behind all three of these mistakes.
You hire an experienced real estate agent because you want someone who understands what's happening in the market and can help you make good decisions throughout the sale.
That doesn't mean you have to blindly agree with everything your agent recommends.
Ask questions.
Ask why they're recommending a particular price. Ask which repairs they think matter and which ones don't. Ask them to explain the pros and cons of different compensation strategies.
A good agent should be able to explain the reasoning behind their recommendations.
But if you've hired someone you trust, it's worth listening when they're telling you that a decision could make your home more difficult to sell.
Thinking About Selling a Home in Tampa Bay?
Every property—and every seller's situation—is different.
The right pricing strategy for a home in St. Petersburg may be different from one in Clearwater, and market conditions can vary considerably by neighborhood, property type and price range.
If you're considering selling a home in St. Petersburg, Clearwater, Pinellas County or the greater Tampa Bay area, I'd be happy to talk with you about your property, what buyers are looking for and how I'd position your home in today's market.
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