Avoid These Costly Mistakes Before Selling a Homeedit
(Jan. 27, 2015) Home buyers and sellers come out of the woodwork in the spring. Now that you’ve decided to sell your home, the real estate experts at Zillow recommend avoid these costly mistakes that could keep you from making the sale!
1. Don’t Sell Before You Get Qualified to Buy Your New Home: If you signed a contract to sell your house before you were qualified to buy another, you’re asking for trouble. Here’s why: Your financial circumstances may have changed since your last purchase, and you might not be able to qualify for a loan, or you might not be able to sell at a price that allows you to buy the type of replacement house you want. You could end up renting or buying something that was far from ideal.
Before you decide to sell the house, get pre-approved by a lender you trust and research the housing market in the area where you wish to live so that you have a good idea how much it will take to buy a replacement. Make plans in case you have to move right away.
2. Don’t Guess Your Loan Payoff: Check your mortgage payoff. Call your lender to check the payoff for your current home mortgage. Make sure there are no penalties written in your contract for early payoff. Some lenders have a pre-payment penalty for paying off your loan too soon!
3. Don’t Guess on the Sale Price of Your Home: Determine your home’s fair market value. Real estate agents will usually help you determine value as a courtesy, but you might take it a step further and order a fair market appraisal. Not an appraisal for the purpose of a full loan amount, but an appraisal for the true market value. There is a difference!
Nothing loses potential buyers faster than an overpriced home. Then, when you lower the price it makes it look like you are getting desperate to sell. On the flip side, you don’t want to lose money by selling too low. It might get you a fast sale, but you might miss out on several thousand dollars. Learn how to price your house for sale the right way.
4. Don’t Underestimate Your Closing Costs to Sell: Don’t forget to calculate the following items: Real estate commission, if you use an agency to sell, Advertising costs, signs, other fees, if you plan to sell by owner, Attorney, closing agent and other professional fees, Excise/Gains tax for the sale, if applicable. Prorated costs for your share of annual expenses, such as property taxes, home owner association fees, and utilities. Any other fees sometimes paid by the seller (appraisals, inspections, buyer’s closing costs, etc.). Real estate agents deal with transactions every day and can give you a very close estimate of seller closing costs.
5. Don’t Spend Earnest Money Given to You: Don’t assume the earnest money deposit is yours until the deal has closed and recorded. Also, give the buyer a receipt. There are many stories about sellers who spent the deposit money prior to closing. When the transactions didn’t take place for valid reasons — such as financing or repair issues — the buyers had to fight or sue for a refund.
Whenever possible, give the money to your broker or a neutral party who will hold the deposit for you until closing day and make sure your contract dictates what happens to the funds if the transaction doesn’t close.
6. Don’t Let Your Emotions Take Over: Keep a cool head during the entire selling process, especially during and after a home inspection. Be realistic and assume there will be issues. No home is perfect, especially older homes. It’s not unusual to have to take care of some repairs yourself. Don’t let the buyer’s demand to do a small repair kill the deal.
On the other hand, don’t commit to fixing anything in advance, unless you’re sure you can handle it emotionally and financially. Decide what type of repairs you can realistically tackle, then stick with the decision. Some repairs can get out of hand and end up costing you big money.
7. Don’t Forget to Cancel or Switch Utilities & Insurance: That sounds simple, but you’d be surprised how many people forget to tell utilities they are moving or apply for utility service at their new home. Call the utilities and your insurance company as soon as you have a contract. Find out how many days lead time they need to switch or cancel, then get back with them when you have a firm closing date.
8. Don’t Become Best Friends with the Buyer: It’s great to be friendly, but don’t get into too many long discussions with the buyers, because personality conflicts often cloud judgments.
Remember, this could be their new home. You’re no doubt excited about moving. But buyers will start second guessing–everyone does. A casual statement about “getting out while the getting’s good” might be enough innocent chatter to kill the deal.
9. Don’t Panic if the Appraisal Comes in Low: At least not at first. There are some things you (and your agent) can do to correct the problem. Study your options.
10. Don’t Go It Alone: Selling a home can be one of the most stressful things in your life. Answering calls, setting appointments, cleaning house, boxing up memories can be overwhelming for most. If you’re working with an agent, it’s the agent’s duty to track many of the day-to-day details that involve the buyers and taking phone calls. The paperwork required in a sale alone is enough to drive anyone over the edge.
11. Don’t Ignore Inspection Requirements: Know what is expected of you and take care of it. For instance, a buyer getting an FHA loan will have an FHA inspector who may require some repairs to process the loan. That’s something you may have to handle yourself if the buyer can’t manage it. Answer inspector questions and provide required paperwork as quickly as possible–selling your home depends on it.
12. Don’t Go to Closing Unprepared: Do not go to closing without your HUD Estimate, which is provided by your title company. It will outline your costs and will give you a good idea of how much money you will be getting or will need to bring at closing. Also, make certain you speak with your agent and/or title officer to get a more exact figure and to make sure no surprises have risen. Its always a good idea to choose your own title company, and get some quotes since title insurance is a large part of closing costs.
13. Don’t Write an Offer For the Buyer: With the exception of YOUR Agent, do not write an offer for the buyer. The buyer should write the offer themselves or with the help of their agent. Hire your own agent whenever possible to protect your interests. Remember, a listing agent WORKS FOR YOU. So avoid letting your listing agent act as a limited broker who will become neutral to both sides.
14. Don’t Show Your Home Unprepared: Get everything ready in advance, especially “eye-sores” or any repairs that may scare buyers away. Get rid of any water leaks, stains, broken windows/doors, bad smells, etc. You don’t want to lose a potential buyer. I’ve often sold a home to the first buyer on the first day!
15. Don’t Follow Buyers Around When Showing: Whenever possible, don’t be home when showing. If you’re listing with a real estate agent, they’ll often ask you to leave when the house is shown. Why? Because lurking sellers make buyers nervous–they don’t feel comfortable inspecting the house when they feel they are intruding. It’s easier for buyers to visualize the home being theirs when they have a chance to critique and discuss the home among themselves. If you must be home, try to stay out of the way and answer questions only if asked.
Unless there’s a real reason for it, don’t ask your agent to be present for all showings either. That’s the kiss of death for showing activity. Other agents want privacy with their buyers and they don’t usually have time to work around your agent’s schedule.
16. Don’t Go It Alone: Oh wait, we already mentioned that one. At Aspen View and Horizon View Homes, we strongly suggest enlisting the services of a licensed Realtor who’s the expert at helping you sell your existing home so you can move on to the new home of your dreams!
About: Horizon View Homes is one of the nation’s largest regionally owned home building companies with new homes in northern Colorado, and new homes in San Antonio.