Common Seller Mistakes That Will Result In An Unsold Home
Common Seller Mistakes That Will Result In An Unsold Home
With the higher mortgage rates have come the initial steps of a shift in the real estate market . Whereas sellers found selling homes to be a rather easy process with multiple buyer offers in the recent past, that has changed. Buyers are being pickier with homes and some buyers have decided to wait until home prices or mortgage rates come down. Sellers need to be on top of their game when selling a home to make sure they sell quickly. Some of the mistakes noted below are things that can be avoided when listing a home for sale.
Pricing a home is both a factor of recent home sales and the current mortgage rates. Home sellers need to understand that higher rates mean buyers need to shop in lower price ranges than prior. When rates were low a buyer could afford a more expensive home since the monthly payments were also lower. As mortgage rates have moved up so have the monthly mortgage payment. A $400,000 dollar house purchased at a 3% mortgage rates results in a $1517.77 a month mortgage payment (assuming 10% down payment and not including taxes or insurance). At 6.5% that same mortgage payment for the $400,000 house is $2275.44. That represents an increase of $757.67 to the monthly mortgage payment!
A buyer who could afford the $400,000 at 3% mortgage interest rate now can find themselves priced out of the same house at a 6.5% mortgage rate. If there are no buyers of a home at the 6.5% interest rate then that means the home is overpriced and in order to get it sold the seller will need to cut the price. The longer a home sits on the market the more the homeowner will need to take a deep look at what the price really should be.
With inflation up, other costs like insurance and property taxes are up as well. Many home buyers who buy with the use of a mortgage will have their prorated insurance and tax payments included in their monthly payment. The seller may have a lower tax payment as the value is based on when they bought it, but when the new buyer takes ownership the value of the home will be adjusted upwards with the taxing authority which will result in tax payment increase. If a seller finds their home is not selling they need to consider at what price point will buyers be interested in light of higher interest and higher tax/insurance costs.
Showings are an important part of the home selling process. The showing time is when the buyer gets to come into the house and kick the tires so to speak. This is when the buyer will decide whether they love the house or want to keep looking. By making it difficult for buyers to come in and view the house the seller is reducing the pool of buyers. The buyers who were not able to see the house due to the seller making it difficult may not come back again or they may find another home they decide to make an offer on.
The goal when listing a home for sale is getting it sold. In order to sell the house, the seller needs to get enough buyers through where at least one offer is received. Sometimes all it takes is one buyer, other times multiple buyers need to be able to visit the home in order to get just one offer. By restricting showings, the seller is limiting their own ability to get an offer.
Failing To Depersonalize
Part of allowing a buyer to fall in love with a home is to make sure it is as much of a blank slate as possible. The buyer needs to be able to come in and visit a house and imagine themselves in the home. Too much personalization left in the home during the listing period means the buyer will not be able to imagine themselves in the home but instead will see the seller as they lived in the home.
Things to depersonalize in a house include family photos, unique collectibles, personal craft items and more. Anything that shows the personality of the current owner should be put out of sight so it can be out of mind for the buyer. The home being a neutral slate allows the buyer to see the home for what it is and how they will live in it.
Failing to Keep House Clean
Just as letting buyers in to view the home is important, keeping the home as clean as possible is also a must for the home seller. Buyers coming to view the home need to be able to imagine themselves in the home. Anything such as dirty floors, pet and other general odors, dirty appliances, dusty windows and cobwebs serve as a distraction for the buyer. The buyer will be more likely to focus on the unclean aspects rather than how they like the home. While keeping up on cleaning of the home while listed for sale can be challenging it will pay off sooner as buyers will be more likely to submit and offer on a home they like.
Failing to Make Repairs
If the home seller knows about certain problems in the house, they should get those problems repaired before the first buyer walks through the door. The seller should take care of both the obvious and the non-obvious repairs. Things that obviously need repairing like cracked windows, leaky faucets/plumbing, broken doors and more will be a big red flag for buyers. Failing to fix readily seen problems will make the buyer wonder why the homeowner has not kept up the home and what else may be hidden below the surface.
Ignoring the non-obvious issues can also lead to problems after an offer has been accepted. While the buyer may not have noticed the problem on the first walkthrough, the home inspection is likely to discover the problems. Then will come the time for the buyer to request repairs if they want to continue on with the purchase. Similar with the obvious repairs, if they buyer finds out about some non-obvious repair and that was something the seller should know about, the buyer may get wary about the overall condition of the home. Losing a buyer under contract can make it harder for the seller to find another buyer at the current listing price.
Failing to Negotiate
Buying and selling a house is a give and take proposition. A seller thinking they are 100% in the drivers seat and refusing to negotiate with the buyer may find themselves with few if any buyers who want to proceed that way. Even when the market is strongly in favor of sellers there will come times during the transaction where the buyer and seller may need to negotiate some matter. As the market shifts either to a more balanced or more buyer favored market then the seller must be ready to work for those buyers who are ready to put in an offer.
Home sellers need to avoid the major pitfalls associated with selling a home. Even one missed step can result in the home seller walking losing a good offer. Buyers are being more selective with their home purchase these days due to higher pricing and higher mortgage interest rates.
- 24 Hour Showing Restrictions and Selling a Home - Requiring 24 hour notice prior to letting a buyer in to view a home will add unnecessary time to buyers and can result in a lost offer. Home sellers should be making it as easy as possible for buyers to come and view the home.
- Should You Stage Your Home? - Staging a home does not mean turning an existing home into a brand new home. Home staging is about improving the look and flow of a home so buyers can better appreciate it.
- 7 Strategies the Successful Home Seller Uses - Seven great tips for home sellers to help get a successful sale.
- Real Estate Trends and the Home Appraisal - Real estate trends, like mortgage interest rates, are taken into consideration on the appraisal.
About the author: The above article “Common Seller Mistakes That Will Result In An Unsold Home” was provided by Paul Sian. Paul can be reached at paul@CinciNKYRealEstate.com or by phone at 513-560-8002. If you’re thinking of selling or buying your investment or commercial business property I would love to share my marketing knowledge and expertise to help you. Contact me today!
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