I am frequently asked for suggestions that would help owners preparing to put their home on the market. The following are several mistakes that can be avoided and may make the difference between success and failure.
1. Employing an agent without comparing:
This may be the biggest mistake and easiest one to avoid! Many people think all agents are basically the same and that it makes little difference which one they hire. There are tremendous differences in quality of service, degree of experience, level of skills, amount of advertising and extra staff support provided. Please interview at least two alternatives before selecting one. Find out what the differences are by asking each one the same questions – and listen carefully to the answers and feelings behind those answers. We have a list of over 20 questions that can help in this process, and a free booklet with many tips and suggestions to help compare agents. Also, ask to see examples of marketing pieces the agent recently used.
2. Selecting the agent who suggests the highest price:
This mistake often involves an owner’s attachment to an overly optimistic selling price for their home, which an agent may encourage or use to highly influence the agent selection process. The prospective seller usually makes the best agent choice based on the services, marketing and negotiation expertise the agent can provide. Once that decision has been made, the first important action will be to determine the best pricing strategy for most effective marketing. Starting out on the basis of an over-inflated listing price may result in a failure to sell for many months, and a lower sale price as a consequence.
3. Listing as a favor, out of guilt, or feeling obligated:
Many people feel they have no choice but to list their house with a close relative or friend who has a real estate license. Others feel obligated to use the same agent they worked with years earlier when buying the home. Some think nothing of giving a listing as a favor to help someone out. These are not good reasons for hiring an agent. Your home is probably one of your largest single assets. A difference in sale price of two to three percent can easily happen, depending on the skills and experience of the listing agent. With prices averaging well over $1 million, this decision can easily cost a seller $20,00 to $30,000.
4. Choosing the agent who offers the lowest commission:
The old adage that “you get what you pay for” is often true in real estate. An agent who offers the lowest fee may simply feel he or she has no other way to compete for business. If this agent discounts his or her fee by 10 to 20 percent up front, how strongly will he or she negotiate for a client? How much supplemental advertising and extra services will the agent provide? Moreover, buyers’ agents may be less motivated by a discount commission. The 10 to 20 percent commission cost savings may result in an even greater discount in sales price.
5. Not hiring a local specialist:
Some agents promote their services as being throughout the entire Westside of Los Angeles. Others are more specific, such as from Beverly Hills to Malibu. Be careful! Some people have found that a local agent has great advantages in marketing and negotiating. The active local specialist will have seen most homes on the market in that area, and will know most of the local agents. These are important issues to factor into your decision process.
6. Basing the price on a neighbor’s asking price:
This mistake often results in homes staying on the market for several fruitless months. An asking price is not the ultimate sales price and the basis for setting an asking price is by a comparison with several actual sales, not just a price another owner hopes to get close to!
7. Not doing any home preparations or pre-inspections:
You never get a second chance to make a good first impression! Even in a “seller’s market” many homes do not sell, and often it is because of how they look or feel. It does not cost much to do basic “staging”, and it may result in a much better and quicker sale. Getting property pre-inspections done can greatly minimize hassles or concerns early in escrow, and also can potentially save the seller many thousands of dollars in credits or repairs.
8. Not adjusting to marketplace results and feedback:
If other agents or their clients say that the house does not show well, or that it is over-priced as compared to other homes they have seen, it does not make sense to ignore this feedback. According to surveys, if a home has had over 10 showings and no offers, it is over-priced.
Michael Edlen provides real estate counseling services to prospective buyers and sellers and helps over 50 clients each year to move. Most of his business is derived from a referral base of over 900 past clients. More tips and information are available on his website, www.MichaelEdlen.com. He can be reached at 310.230.7373 or Michael@MichaelEdlen.com