Common Mistakes People Make When Selling Real Estate
1. Believing they can save a lot of money by selling their home themselves instead of listing their property with a real estate agent or REALTOR®
2. Failing to talk to several real estate agents or REALTORS® before signing an Exclusive Right to Sell Agreement
3. Failing to objectively evaluate their property's value or accept the figures provided by real estate agents or REALTORS®
4. Attempting to sell their home or property themselves without researching and understanding their states' laws and liabilities
5. Not being totally honest when filling out Property Disclosure forms
6. Not making counter offers
7. Not preparing the property for showings
8. Not having a thorough home inspection done by a licensed home inspector prior to putting a house on the market
9. Believing that a real estate agent and a REALTOR® are the same thing
10. Not working with a REALTOR® when selling every type of property!!!
Now, let's look at each of these issues in more detail. However, before we get started, everyone needs to understand this – the material presented here is not all-inclusive. The items presented here are simply mistakes that Gary has seen and heard of sellers making when selling real estate. So, with the disclaimer out of the way, let's get down to business.
First, let's take a look at Sellers believing they can save a lot of money by selling their home themselves instead of listing their property with a real estate agent or REALTOR®. While it is true that sellers pay a significant commission to real estate agents or REALTORS® who sell their property, it is not true that you can always save a lot of money simply by selling your property yourself. Many sellers do not have the expertise or experience necessary to determine the correct price for their home or property, especially in a dynamic market. As a matter of fact, the National Association of REALTORS® data indicate that REALTORS® can sell homes for as much as 16 percent more than homeowners who sell their homes themselves. Individuals thinking about selling their home or property themselves also often fail to take into account the cost of advertising, which can be very expensive. This is especially true if a home does not sell within a short period of time!
And, most importantly, many sellers fail to take the time expenditure required to sell their property into account – and given the value of our time today, this is a major “cost factor”. When you market your home or property yourself, you need to understand up front that you will have to make time to show the property, respond to any offers, and deal with buyers or their agent/REALTOR®. Sellers will also most likely end up showing the property to “nosy neighbors”, sightseers, and people who cannot get the required financing. Many of these type showings can be eliminated by utilizing a REALTOR®.
Next, let's briefly look at failing to talk to several real estate agents or REALTORS® before signing an Exclusive Right to Sell Agreement. Just like with buyers, sellers should talk to several real estate agents or REALTORS® before entering into any contractual agreement. Every seller needs to be able to trust the individual that is representing their interests. Free and open communication is essential to the process of selling a home, and you can only have that if you trust each other! Although not absolutely essential, it is definitely an added benefit if the seller(s) actually like their agent or REALTOR® and vice versa!!
The next mistake a lot of sellers make is failing to objectively evaluate their property's value or accept the figures provided by real estate agents or REALTORS®. Unfortunately, many sellers tend to overestimate the value of their property. That is partly due to human nature and partly due to looking only at extreme examples. Most sellers want to believe that their property is in top category with regard to overall value, and in some cases it is true. Sellers also tend to attach monetary value to sentimental feelings about their property. However, the simple fact is that not every property can or will sell at the highest price within the property's category because of differences such as location, features, amenities, and so on.
Overestimating the value of one's property is compounded by extreme examples within specific markets. There can be many reasons why a particular property sold for more than the surrounding properties. Unfortunately, it's often because the buyer simply paid too much. This could be due to the fact that the buyer wasn't represented well, or maybe they just loved the property and agreed to pay whatever the seller asked. Sometimes buyers pay more for a property because they have a sentimental attachment to the property. Whatever the reason(s), it doses not change the fact that some properties are sold for more than they are actually worth.
If a seller gets roughly the same figure from several real estate agents or REALTORS®, that is a very good indication that the price is accurate and fair. Remember, real estate agents and REALTORS® are trained in the art of pricing homes and other property. And let's not forget that, although it's not the primary consideration, agents and REALTORS® also want to get the best price possible because they work on a commission basis. But, in the final analysis, real estate agents and REALTORS® are professionals and must be honest and straightforward when pricing each property.
Attempting to sell their home or property themselves without researching and understanding their states' laws and liabilities is another mistake many sellers make. There are certainly sellers out there who can effectively represent themselves in a real estate transaction. However, in our busy society, most people have very limited time available to do the necessary research to fully understand and appreciate the overall process of selling real estate in their state. And, if the seller doesn't understand all of the requirements, then they also probably do not understand the liabilities that come with it! Unfortunately, too many sellers learn the requirements the hard way – as the result of a lawsuit. The bottom line is that if you end up in court, there is a good chance that any savings you had will disappear quickly!
The next mistake that some sellers make is Not being totally honest when filling out Property Disclosure forms. Sellers are normally enthusiastic to disclose the positive features of their property, but many sellers are reluctant to disclose negative items about their property. This is a major mistake that is not only unethical, it is also illegal!! Sellers in Tennessee are required by law to disclose any known defects or adverse information regarding their property. Make no mistake about it, withholding negative information about the property will cost you money in the long run!! When in doubt, disclose, disclose, disclose!!!
Another big mistake that I see a lot of sellers make is Not making counter offers. Buyers sometimes make offers that are “low ball” offers – meaning the offer is far below the listed price for a particular property. Many sellers are understandably upset when their agent or REALTOR® brings them a low ball offer. However, in most states, agents and REALTORS® are required by law to present all offers that are received for listed properties, even if it is ridiculously low. Gary recommends sellers work with their REALTOR® to provide a counter offer to any offer they receive – even if it is full price or more! The reason Gary recommends this course of action is because it keeps the deal on the table, and that means it is still possible to reach an agreement. Face it, if you simply reject an offer without making any type of counter, then most potential buyers will move on at that point. In other words, the deal is dead! The only time when a seller may not want to bother with a counter offer is when they have multiple offers, and at least one of them is a good offer. In this instance, you could be better off concentrating on the most acceptable offer(s). However, it normally does not take a lot of time to prepare a counter offer, and it is possible that the other, seemingly better, offers could fall through. Just something to think about!!
It does not make a lot of sense, but some sellers are not interested in Preparing a property for showings. Specifically, sellers often refuse to listen to their agent or REALTOR® with regard to cleanliness and “de-cluttering”. This is another major mistake because a lot of buyers have difficulty “seeing the potential” for a given property. However, if your house is clean and uncluttered, then it is easier for them to visualize their belongings in the available space. So, when it comes to selling property, cleanliness and lack of clutter are incredibly important. Gary always advises his sellers to imagine themselves as buyers looking at their property in comparison with other properties on the market in their area. As a matter of fact, Gary has taken sellers to see similar properties just to drive the point home – clean and uncluttered homes are MUCH easier to sell!
Next, let's take a quick look at another common mistake that a lot of sellers make – Not having a thorough home inspection done by a licensed home inspector before putting a house on the market. This is a common mistake that sellers frequently make in an attempt to save money. Unfortunately, this is not a good way to save money. As a matter of fact, a thorough home inspection performed by a qualified, licensed home inspector will normally save sellers money! This is true because a good home inspector can find things that need to be addressed before a property is placed on the market. That means that your property will be in the best possible condition, and this will help you get the best possible price! This is true even if the seller does not fix all the deficiencies identified in an inspection because the problems have already been identified. So, if the inspection was done by a qualified, licensed inspector, there should not be any major surprises as the sale progresses.
Also, sellers need to understand that nearly all homes have cosmetic problems, and some of those items may be identified on the inspection report. However, cosmetic items are not normally going to be “show stoppers” for the vast majority of buyers. And, while it is not uncommon for buyers and sellers to disagree about who should pay to fix cosmetic items, the differences can normally be worked out if all parties are willing to be fair and reasonable. However, by addressing the major issues and cosmetic items before placing a home on the market, you improve the chances of getting the most money for your property.
Believing that a real estate agent and a REALTOR® are the same thing – this is a common mistake because most people do not realize that all REALTORS® are real estate agents, but not all real estate agents are REALTORS®. This may seem like a trivial issue. However, in reality, it can be a big deal because REALTORS® are members of the National Association of REALTORS®, and they voluntarily agree to abide by a higher code of ethics and standards of practice than ordinary real estate agents. Now, that is not to say that you will receive a lesser degree of service if you choose to work with a real estate agent – you may not (remember – all REALTORS® are real estate agents, so REALTORS® certainly do not dislike real estate agents!). However, why settle for less than the best? As stated before, REALTORS® voluntarily agree to abide by a higher ethical and performance standard than required by most states' laws. So, your chance of receiving outstanding service is improved when you work with a REALTOR®! Obviously, Gary recommends that all buyers and sellers select the REALTOR® of their choice to help them with their real estate endeavors!
Finally, let's take a quick look at another mistake many sellers make -- Not working with a REALTOR® when selling every type of property!!! Whether you're selling vacant land, or commercial, residential, or multi-family property, you will improve your chances of selling that property when you work with a REALTOR®. As stated above, REALTORS® are professionals who take great pride in the level of service they provide to their clients. So, it stands to reason that a REALTOR® will work hard to help sellers market their property as effectively as possible. With that in mind, Gary strongly encourages sellers to find a REALTOR® you like and trust, and listen to their advice!!!
Contact Information:
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Phone: (423) 895-6084
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Shell & Associates Real Estate
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Office:(423) 543-2393
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308 West G Street, Suite A
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Fax: (423) 543-2135
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Elizabethton, TN 37643
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Email: gary.smith@tnrealtyagent.com
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