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9 (or more) Mistakes That Salt Lake Home Sellers Should Avoid
1. I know the market analysis came in at $275,000 but let's start at $300,000. After all, we can always come down in price.
And you will. Study after study show
that when a home starts substantially higher than market value, the ultimate
selling price is significantly below the market value. Think of homes for sale
as if they were products on a shelf. And each shelf represents a price range.
If your home is on the wrong shelf, then the wrong buyers are looking at it.
The buyer who is looking for a home in your market value will never see your
house and those that do see your home need something on that higher price shelf
and are not interested in making the appropriate offer on your home.
Yes, of course we start a little above the market analysis price for negotiation sake. But that spread is a fine line and is one you want to discuss with your agent. Remember, you are paying for professional advice and experience. Use it.
2. The kitchen remodel isn't quite finished but we can describe the granite counter tops to the buyer. Maybe they will want to pick out their own colors.
I'm sure the buyers would like to pick
out their own colors, but unless you are a developer selling a new construction
home this is not a good idea. Buyers fall in love with what they see not what
they hear. Ever notice how a model home is finished and furnished right down
to the fake family photos on the nightstand and dinner plates on the table?
This is because when you are selling a home you are really selling a lifestyle
that the buyer feels like they can move into.
Always have the home ready to sell from the first showing to the last. Otherwise the buyer (and their agent) will use every shortfall to chip away at your price and profit.
3. I don't want one of those keyboxes. I could never feel secure knowing that some stranger could come in at any time.
The new electronic keyboxes are very
secure. It would be easier for a burglar to kick in your door than to break
Only a licensed agent (or affiliate) who is in good standing has a functional electronic key and unique code to open the lockbox. This key has to be updated every day and is cross checked against the board of real estate data base of active agents. As soon as your keybox is opened your agent is notified electronically of who entered and when. Your agent can further restrict access to certain hours or force the other agent to call first for a special access code. If there were a kleptomaniac agent out there, the keybox is the last option for gaining access to a home.
Under no circumstances should you allow
a mechanical keybox to be used on your home. These are only about as secure
as a old fashioned combo lock. And think about the process for entry:
A buyer's agent has to call your agent for the code to the box. This agent almost certainly writes down the code on the MLS printout which has your address and home description. Then guess who gets the printout when the showing is over? The buyer most likely and who knows after that.
Consider the alternatives to the electronic keybox:
4. The neighbor said his daughter wanted to buy my house. Should I see if they are serious before listing?
Selling your home to the neighbor and listing your home are not necessarily mutually exclusive. This scenario happens more often than you might imagine. Letting friends and family know that you are going to sell brings out all sorts of responses in people. Most of them well meaning. Yes, your neighbor, cousin, orthodontist or whoever may suddenly announce that they have always wanted your property but they also want to backpack across France someday. There is a way to force them into action, still list your home and be fair to everyone. It is called an exclusion clause. Simply put, let your agent know the whole story and suggest that you want to still list your home but with the neighbor excluded from the listing contract "for a specific time period" because of course you found them yourself prior to the listing being signed. This means that if the neighbor follows through and really does make an offer in writing then you pay no commission. In the mean time your agent is going to start marketing your home which will motivate the neighbor into getting off the fence. Both the potential buyer and your agent are motivated to make things happen, and you don't waste valuable marketing time waiting for the neighbor to make up their mind. I would also recommend that you offer to pay the listing agent (through their broker) a reasonable fee to write up this offer and follow through to closing represented your interests. The buyer feels they got a discount, your agent is gainfully employed and you get a legally binding contract with professional representation at a discount.
5. I don't want to show the house to anyone who isn't pre-approved for a real estate loan.
It is perfectly understandable that you don't want to waste your time getting ready for a showing that has no chance of success. But consider that when you have your home listed professionally then the only buyers that should be seeing the home are being represented by buyer's agents who don't want to waste their time either. You want to show your home to as many buyers as possible to generate an offer at the highest price. You don't want to do anything that makes it more difficult to show your home. Buyers expect near immediate availability with a minimum of hassle. They don't come back later and there is always something new to see tomorrow. It's not fair, but it is a fact.
6. It would be easier to have the buyer who wants to see my house to just call me directly for the appointment. No sense in them bothering my agent for every call.
Easier maybe, but not smarter. If you were charged with a D.U.I. would you just call up the district attorney and suggest you settle the whole thing over a couple of drinks? Of course not. You have professional representation. Let them, no, make them do their job. You do not want to talk to the potential buyer or worse yet their agent because it puts you in an awkward position of being asked questions about the property or your motivation. None of which is going to benefit you in negotiations. There is a version of the Miranda warning for real estate. Anything you say, can and will be held against you in offer negotiation.
7. My home has a lot of special features. It would be best if I helped the buyer's agent show the home so I can point out those antique doorknobs.
No, it wouldn't. I have spent at least half of my career as a buyer's agent and I can testify right here and now that the buyer does not give a rat's hinny about those little custom touches. Those were special for you but it is not what will sell your home. Buyers first and foremost do not want the seller at home during a showing. They want to be able to move around the property on their own time and fall in love with it for their own reasons. The presence of the seller also inhibits buyer/agent conversation, which is necessary in resolving issues that keep the buyer from making an offer. If you must, make a list of these features and leave a copy out for the buyer.
8. My tenants are really good about this whole sales thing. I don't want them disturbed unless the buyer is serious. We need 24 hour notice to show.
If you are selling a multiunit building
or other investment property then yes, that is a reasonable request. Skip the
If you are selling a single family home or condo then it is very unlikely that the buyer with the highest and best offer will be interested in keeping your tenants. In short, they will not be investors. Buyers who are not investors are scared witless by occupying tenants, even if the lease is up before closing. They don't like the idea of buying something that was a "rental". It just isn't sexy.
Selling a rented single family home puts the seller between a rock and proverbial hard place. It is expensive to vacate paying tenants and stage the home for sale. Every day on the market is a loss in income. However the ultimate cost is likely far less because a vacant home that is prepped and staged is much easier to show and will bring a higher price than one that is being occupied by tenants who have nothing to gain by the sale of the property. If you really must keep the tenants then I suggest that you put in writing an agreement with them to keep the home in top condition and available on short notice in exchange for a cash bonus at closing. But only at closing. Keep the carrot on a long stick.
9. There's no sense in listing my home this close to the holidays. Lets wait until spring when there are more buyers.
Yes, there are more buyers in the spring. There are also more sellers. It has been my experience that the ratio stays pretty much the same with the difference being that someone who is shopping in the off season usually has to buy a home and is much more motivated.
10. Why should I pay the Buyer's Closing Cost? No one paid my closing cost when I bought my home.
"Paying the buyer's closing cost"
is a misleading statement. No one but the buyer can pay their closing cost.
A more accurate statement would be: "The seller will allow the buyer to
finance their closing cost over the life of the loan by adding them to the agreed
upon purchase price." Awkward but accurate.
The number that a seller should pay attention to is the net equity. When you receive an offer your agent should provide an estimated breakdown of all the selling expenses and come up with the net amount to you. This is the final amount that the escrow officer will hand you at closing. In small non-sequential used bills if desired.
Here is an example:
Your home is listed for $159,900 and a buyer brings you an offer of $161,900 and ask you to pay $4800 in closing cost. This is actually an offer to you of $157,100. That is $161,900 - $4800 = $157,100. At settlement (close of escrow) the escrow company would credit you a sales price of $161,900 and then debit you $4800 and credit the buyer $4800 toward their cost. The buyer's loan will be for $4800 more than it would have been if they had just paid their closing cost with cash and bought the home for $157,100. But now the buyer has more cash in their pocket (but has a higher monthly payment) and you sold your house.
One gotcha to this is that the property must appraise for the higher amount. Which by definition is more than fair market value. This higher amount may also effect your capitol gains tax if it was an investment property and normally the real estate commissions are paid on the lower net amount.
Whether you're moving up, moving in or just moving on, call me today!
Stonebrook Real Estate
6375 South Highland Dr.
Salt Lake City, Utah 84121
24/7 phone or text: 801.550.0330