We've talked a lot about home buying on the Wela blog and on The Money Revolution but there's another side to home ownership, selling your house. To find out more about the process of selling (and what can go wrong if you're not careful) we turned to our friend Ben Kubic, co-founder of Atlanta-based Virgent Realty, to get his take on the five most common mistakes people make when selling their home.
1. Pricing your home too high
Many homeowners that we’ve worked with want to price their home as high as possible to start out with and reduce that price over time if they don’t see any showing activity, but this philosophy can cause some major problems. The longer a home sits on the market, the less likely buyers are to visit because they assume the home has some issue. Secondly, many buyers start their home search by filtering available listings by price range, so even though a buyer may be able to pay a price you’re willing to accept, your house will never show up on their search if it’s listed too high.
Homes that are priced at or below market value are not only much more likely to attract buyers, but also more likely to bring in multiple offers which ensure the home is sold for its maximum possible value. So what’s the magic behind pricing a home effectively? It’s a long(ish) answer, and you can read about it here.
2. Not getting your home inspected before listing
Most homeowners associate inspections with the closing process, but getting an inspection before you even list the property can save a lot of headache down the road. Buyers love using the home inspection as an opportunity to negotiate price reductions even though the repair price may be a lot less than they are asking. By getting a preemptive inspection and repairing any deficiencies before you list, you can eliminate renegotiations that could reduce your home equity or even kill the deal altogether.
3. Investing in home upgrades that don’t pay off
Almost no renovation projects return 100% of the investment on resale so the time to invest in your home is when you expect to stay there for a long time, not right before you’re planning on selling. HGTV has given many homeowners the impression that renovations done right before listing increase equity in one’s home. With the exception of replacing your front door, you will lose money by making updates right before you list.
Even if you have no intention of selling anytime soon, be cognizant of your local market. If the average home in your neighborhood is selling for $300,000, that $100,000 kitchen renovation won’t pay off at sale time because buyers use neighborhood comps to determine how much they’re willing to pay.
4. Using low quality listing photos
You have 20 seconds to impress a viewer with your first listing photo. If that photo doesn’t entice the viewer to look for more information, then you’ve just lost a prospective buyer and a chance at an offer. Since most listing photos are now viewed on HD devices, grainy photos taken with an iPhone or low quality camera will quickly turn off buyers.
High quality photos, like those taken with a DSLR camera, not only attract buyers, but they can actually increase the selling price of your home by up to $100,000. It’s also a great way to differentiate your listing, since only 15% of listings use high-end photography. Shameless plug: We at Virgent provide professional photography for all of our clients for this exact reason.
5. Overpaying real estate commissions
Of course we couldn’t help slipping this one in here, but it’s still absolutely true. Most homeowners never even think to ask about the commission when they sign with a listing agent, but that oversight can quickly cost you tens of thousands of dollars extra, in addition to a lot of time-consuming pre-listing visits, physical paperwork, and phone calls.
If you're curious about selling your home checkout Virgent's free interactive home valuation.
Ben Kubic is the co-founder and CEO of Virgent Realty, where he focuses on developing the technology behind the company's seamless customer experience. Ben founded his first company as a sophomore in college to serve the educational needs of lower-income students in the surrounding area; he sold that company after growing it for 5 years. He holds his MBA from Harvard Business School and a B.A. in Political Science and B.S. in Operations Management from the University of Maryland.