4 key seller mistakes that cost them money
When you work in residential real estate, emotions run high. The main reason is because for most people, their home is one of their biggest and most valuable assets. Not to mention the memories a home accumulates over the years of ownership. Memories that don’t have a monetary value, but an intrinsic one that makes it challenging when it comes time to sell.
Things change over the course of a lifetime. From upgrading your home to fit your family needs, to downsizing to suit your new leisurely lifestyle. Very few people nowadays stay in a home for a period of 20 years of more. The Chairman and CEO of Berkshire Hathaway Inc, Warren Buffett, is one of those unique exceptions. But for most, the plan is 5 years before re-evaluating if a change is necessary. What goes into that decision? To resume it to three key factors: lifestyle, financial situation, and market conditions. Each are tightly linked to one another. You won’t sell when the market is not in your favour because you need the equity from your home to buy your next one. You’re not going to upgrade if you don’t need to, and you certainly won’t overspend and risk financial ruin just to get that view you always wanted.
When the time comes to sell, sellers have thought all of this through and are ready to go to market. This is where their biggest and most costly mistakes begin. These mistakes are because many sellers have unfounded opinions about their home that can cost them a lot of money and potentially put a strong pause on their future plans. Luckily there are ways to avoid these mistakes.
So without further ado, let’s go over them.
Mistake number 1: Sellers who believe they know the worth of their home
Ever heard of the expression “only a fool has himself for a client”? This applies to most homeowners around the world! They all think because someone they know told them how great their home is that it’s worth more. They all think they have the best situated home on the block. They all think that comparable sales in the area don’t apply to their home. And the list goes on, and on, and on.
The hard truth is that a seller’s opinion of the worth of their home is the least important one in the whole selling process. Why you ask? The answer is simple…they already bought the home. They are not future potential buyers. Just the like the market, buyers and their needs evolve, and you need to stay on top of it. Your realtor can educate you on what your home is actually worth, as well as what you need to do before selling to make sure your property reaches as many qualified buyers as possible. Maybe you need staging, maybe you need slight renovations to bring the property up to current buyers’ standards, maybe you need to do a pre-inspection to make sure you won’t get any nasty surprises when you have an accepted offer conditional to an inspection. Only a licensed professional who knows your area, your market and its conditions can adequately guide you.
Mistake number 2: Not listening to feedback from potential buyers
It’s not always easy to give feedback to a seller after a showing…especially when that feedback is not so positive. An experienced realtor can navigate through the “fluff” and know when a comment is worth passing on to the seller and when to simply discard it. For example, a buyer who visits and says something like “well I don’t know, the news says it’s a buyer’s market, so I think this seller is asking too much.” Based on what? This type of comment doesn’t even warrant a realtor wasting their breathe and time to pass it on to the seller because it has no bearing on the property and it’s offering. However, a comment such as “I saw a few houses in the area and I find the rooms to be small in comparison to what I saw for the same price” is DEFINETLY worth passing on. This is feedback from a buyer who is actively looking and taking notes on what they are seeing and putting a dollar value on it.
Because of some of the same reasons mentioned in “Mistake number 1”, most sellers brush off such feedback figuring the potential buyer doesn’t know what they are talking about. Sellers need to remember when they bought their home, the person who owned it before was probably like them right now; in LOVE with their home and see nothing wrong with it. That doesn’t mean just because the previous sellers saw no fault in their home that the current sellers said, “we’ll give you what you want because you are right on all fronts!”. No. Today’s sellers need to be reminded that they were in the same driver’s seat as today’s buyers, and they also had comments and observations before choosing which home to buy and at what price.
Ignoring feedback from visits may cost sellers a lot of money, because the longer your property is listed, the greater the likelihood of low ball offers. The first few weeks to market are crucial and, in some cases, pricing needs to be adjusted quickly based on feedback. Who can guide you? Your trusted realtor who knows what to do and that you should always listen to.
Mistake number 3: Blaming everyone else for your home not selling
Nobody likes to admit when they are wrong. So what do we do? We blame everything and everyone around us. After all, how could it be our fault when we are so perfect?
When selling a home, sellers need to work in partnership with their realtor and stay in constant communication with them. More importantly, they need to take their realtors opinions, feedback and pricing strategy seriously. Sadly, many don’t and will put the blame on their realtor.
It is not your realtor’s fault if your home isn’t selling. It is YOUR fault for not listening to them.
I see some sellers thinking “well my realtor doesn’t communicate with me!”. Well, then it is YOUR fault for picking the wrong realtor.
Sellers will often pound their chest as the client and demand more advertising, more exposure and more effort from their realtor in order to have their home sold when they have been repeatedly advised to lower the price, with comparable studies and valid feedback to back it up. The truth is your realtor is in business to make money. If they don’t sell your home, they don’t get paid. Don’t you think they are motivated to make sure your home sells, and that you tell all your friends about how happy you were with their service so they can drum up more business? Of course they are. One thing they cannot do however is create miracles. A home will sell for what the market at the time is saying it will sell for. Period. If a seller chooses not to listen to the advice given by their realtor, they can tell themselves whatever they want, but in the end, it is entirely their fault the home didn’t sell. What will happen? It will probably sell for less later on.
Mistake number 4: Going with the realtor who gives you the highest price
Let’s be honest, the real estate market in Québec is a small pie with over 16 000 realtors all looking to get a piece. When choosing your realtor, you need to make sure it is someone you can trust, that knows your area, knows how to properly communicate the value of your property to others and will make sure you are legally protected to ensure a smooth transaction.
What you don’t need is someone who will recommend you a ridiculously high and unjustifiable price for the sale of your home just to get your business. Why? As mentioned in the above mistakes, the longer you are on the market, the better the chances of low ball offers. Furthermore, the more price adjustments a seller goes through, the more buyers are asking themselves “what’s wrong with the home?”.
Let’s not forget that aside for the market studies, pricing strategies and marketing plans, residential real estate is very much dependent on another person’s perception. These other people being potential buyers. Why give them a reason to question the perception of your home?
When presented with potential listing prices for a home, a seller must very carefully analyze how that price came about and see the research that was done to get there. The highest price they are presented with may not always be the right one and will cost them dearly. The lesser one may not seem as attractive at first, but in the end, they most probably will walk out with more than if they took the over inflated one.
In conclusion, as repeated throughout this article, you must always listen to your trusted realtor. You hired them for a reason, so let them do their job. Our Berkshire Hathaway HomeServices Québec brokers won’t steer you wrong. More importantly, they don’t want their clients to lose money! What more could you ask for?
Sacha Brosseau (founder and CEO of Berkshire Hathaway HomeServices Québec)