Buying a first home is a momentous occasion in a person’s life. However, most owners will eventually sell that first house and move to another. They may have a growing family. Perhaps they need a change of scenery. The statistics show that Australians move around. But what made buying that property such a big deal was the enormity of the financial transaction. For ordinary folks, it’s the biggest they’ll have made. Selling that major asset will inevitably prove daunting for the vendor. Like when they bought their “castle”, selling it will prove a whole new experience. Things can go wrong, and that’ll be foremost in the minds of all but the most self-assured home seller. People screw up, but this is not a time when you’ll want to excuse an error as one of life’s learning curves. We look at five common mistakes that first-time home sellers should avoid making.
Expecting To Sell A Property Too Quickly
The vendor is understandably keen for their property to sell quickly. Chances are they expect it to. However, that’s unlikely in the current climate, with the RBA lifting interest rates as inflation bites. The property market exists in a state of flux. It’s at the mercy of competing factors that affect its growth. While property experts do their best, gauging the property market is a tough call. It’s not easy to predict how it will behave in the future. There are three types of markets: a buyer’s market, a seller’s market, and a slow market. The market turns slow when homebuyers can’t afford to borrow and sellers are afraid of selling low. No home seller wants to set a precedent that will see house prices drop. Homebuyers can only borrow what banks are willing to lend. If you’re caught in this confluence of economic conditions, it becomes a waiting game.
Just as economic factors come into play, so do others. In a slow market, vendors selling in the more desirable suburbs stand a better chance of meeting their target price. When the competition is fierce in the wider suburban spread, it comes down to other criteria. Is your house the best on the block or just the fourth-ranked? The roomiest, and is it the tidiest? Is it located a stone’s throw from shops and transport, or out in the sticks? The vendor must appreciate their situation according to the market climate. They may not have the best property on the block. In a seller’s market, that wouldn’t matter much since buyers are just after houses, period. In a buyer’s market, the homebuyer gets to choose. But in a slow market, both parties are affected. Likewise, never discount the weather! Bad weather also slows the market.
Not Properly Marketing A Property
Many first-time home sellers are under the misconception that a listing is all that’s needed to sell their house. They assume that having their property displayed on a major real-estate website is enough advertising. Moreover, their real estate agent waxed lyrical about their database of buyers. The seller didn’t quite understand their meaning. Subsequently, the rookie vendor is satisfied that enough buyers will find their way to the house. But that’s not how it’ll play out. Their listing may be one of hundreds or even thousands of advertised homes. And buyers don’t necessarily have the long-distance vision to discern the “for sale” sign stuck in their front yard. Additionally, the agent’s database might not include their prospective buyer. Marketing a property isn’t merely part and parcel of selling property, it’s a category unto itself. What’s more, it incurs its own set of costs and fees aside from the agent’s commission.
Each property is unique and is situated in the wider marketplace of similar homes. Some houses practically sell themselves because they’re in a sought-after location. Others wither on the market because that market is oversupplied with comparable properties. Despite these differences, every property needs to target its appropriate demographic. A marketing campaign should involve a multi-pronged strategy across all the relevant channels. Marketing even involves the presentation—or staging—of a property. Today, technology allows us to combine the physical and reprographic into virtual tours. The only thing limiting a marketing strategy is the price the seller is willing to pay. Those costs can be separate from or incorporated into a real estate agent’s commission. Does your house suit a young couple, an older person, or a large family? What income level would the hypothetical buyer be at? These are all necessary factors to compute when designing your marketing strategy.
Overpricing A Property
Many properties are abandoned on the listings because the seller’s expectations are unreasonable. A property is only worth what a homebuyer is willing to pay. Having said that, baseline values are attributed to each house according to what’s comparable for its neighbourhood and build. A property’s sale price is affected by what else is on offer for a similar price. Unavoidably, market prices rise and fall. In a seller’s market, an average house might achieve an above-average sales price. If it’s a buyer’s market, its value might drop. A seller may be unlucky. They might have bought the house in a buyer’s market only to find themselves selling the house in a buyer’s market. Potentially, they’ve lost money on the original purchase price or failed to gain an appreciable value. A seller who’s stubborn about the price will find it tough to sell their property in such tough market conditions.
The stubborn seller might be counting on a bout of intense negotiations should they hook an interested buyer. They’d want to pray that their real estate agent has golden tonsils. The agent would need to convince the buyer to part with more than the property’s worth. However, the buyer will be intent on some hard bargaining of their own. After all, interest rates are high and they’ll need their bank’s approval. Moreover, they’ll have to pay it back, and those monthly payments will hurt. A wise seller will not obstinately concern themselves with their desires. They’ll put themselves in the mind of a prospective buyer and consider a more reasonable asking price. To do any different would put them at loggerheads with their agent, who’ll know best what price to set. Your real estate agent will guide you in estimating a fair asking price and won’t discourage potential buyers.
Overspending On Property Renovations
A fine line separates sensibly renovating and over-renovating a property before the sale. Going hog-wild with upgrades won’t necessarily raise the house’s value. A house with a neat pagoda must surely fetch more than one with an ugly clothes hoist, you say. However, that depends. How much did it cost? Or it might be a large shed. The old garage wasn’t quite as impressive. The buyer reckoned that by building a potential man cave, they could tack an extra 50 grand on the asking price. Maybe the owner went nuts upgrading the kitchen or remodelling the bathroom. In those two instances, it may not be a bad idea. Renovations are important when selling your property, especially in functional areas. It’s all the better when you add energy-efficient models. It’s a matter of knowing what is practical and what constitutes a waste of money. Your real estate agent will advise you.
Micro-Managing Your Real Estate Agent
All sorts make up the human race. A real estate agent will inevitably find themselves dealing with annoying people. It can’t be helped. But that home-seller should be careful about micro-managing their real estate agent. For a start, they need to ask who’s the expert. Who makes a living out of selling properties? What could the egotistical homeowner know that the real estate agent doesn’t? Breathing down a real estate agent’s neck is counterproductive. It might sap their energy or cause disagreements to arise. If the seller is insistent on getting their way it may affect the sale of the house. Worrying about whether the agent will conduct an inspection effectively will cause friction. The agent needs to be free to show the potential buyer around the premises without the encumbrance of the seller. They know what to show the buyer and how to entice them.
The property market determines how quickly and profitably you sell your house. Maybe a year ago was the best seller’s market ever. But the market changes. The forces that drive it are beyond our control. What matters is being realistic about valuing your property. Thereafter, making sensible decisions and following good advice. You may not get the price you hoped for but you’ll more likely get the best offer going. And that’s where a qualified real estate agent makes all the difference. They’ll know best what price to ask. A good real estate agent will understand the market conditions and advise you on how to navigate its winds. You’ll get the best instruction on a marketing strategy and how little or how much renovating you should do. If you’re seeking a gun real estate agent Perfect Agent can help. We’ll match you with an agent who’s attuned to your needs.