Ways to Sabotage the Sale of Your Home
1. Overprice it
Refuse to price the home at market value. Convince yourself your home is
the best home in the neighborhood and should sell for more than surrounding
homes. Overpricing a home almost guarantees the house will sit on the market
for months, and after a while, the listing will become stale and lead prospective
buyers to think there's something wrong with it. Hoping to find an uninformed
buyer who doesn't realize your home is overpriced is just wishful thinking.
Most buyers look at two dozen or more homes before they make an offer.
If they were ignorant when they began shopping, they became educated after
looking at several homes.
2. Fall in love with your home
"How dare they come in with an offer like that?" listing agents often
hear from sellers. Don't they realize I just paid over $40 a square yard for
that beautiful mauve carpet? If they don't like my house the way it is, let them
go somewhere else!" An offer means someone is interested in your property.
That's far more important than the amount offered. The fact that they're interested
is more than half the battle. Now all you have to do is negotiate price and terms.
Most buyers consider square footage a more reliable indicator of value than the
fact that the master bathroom has marble tiles imported from Italy or that you
had a local artist paint a mural on the living room wall.
3. Ignore (or hide) your home's true condition
Having an open house
this weekend? Quick, paint over that water
stain on the bathroom ceiling, cover that soft
spot in the roof with a few new roof shingles,
and rearrange the furniture to hide those carpet
stains in the living room. Many problems are
rooted in denial. Sellers can't look at their
home objectively. They have a hard time seeing
it as a buyer would. You truly don't get a
second chance to make a good first impression.
Most home buyers literally decide within seconds
if they are interested in a property. Spending
a few hundred or even a few thousand dollars
getting a home in tip top condition not only
makes it show and sell better, but you are
likely to get much of the fix up costs back
in a higher sales price.
Taking the easy way out by deducting repair funds from the seller at closing
only invites disaster. Buyers always overestimate the costs either because
of a lack of knowledge or a desire to use them as a negotiating strategy.
Also, keep in mind that once it gets this far, every repair is going to
be done by licensed contractors at their prices, not the actual expense
you would have faced if you had fixed or painted it yourself.
4. Overvalue your sweat equity
Every potential buyer who walks through the door gets the full run-down:
Driveway patched and re-sealed every spring; greenest lawn in the neighborhood;
homemade built in cabinets in den; custom electronic closet organizer in
master bedroom. Your list of extras and improvements goes on and on. Many
sellers oversell the features of a home and overestimate the value of the
work they have done on it.
5. Disregard the buyers' perspective
Refusing to work with the buyer's individual situation when negotiating
a contract. For example, "If they can't wait five months until after
the holidays to close, the deal is off." The right way: If you're
getting a good price, be flexible when working out the terms. The No. 1
barrier to homeownership is lack of down payment. Many sellers don't realize
that buyers need to come up with not only the 3 to 20 percent down payment,
but also have to pay another 3 percent in closing costs, escrows, prepaid
taxes and insurance. Offering to pay part or all of the closing costs is
a lot more helpful to buyers than lowering the price. Bargain on price
or terms, but not both.
6. Hide your neighborhood
Ok, so the neighborhood
is falling down around you. So what? You've
not only kept your home up, but you added a
four-car garage, an olympic sized pool and
gold plated your two story fountain. All the
other homes advertised in the real estate magazines
with your features are going for top dollar
so hold out for your price. The right way:
Keep in mind the oldest adage in the real estate
game: Location, location, location. Many sellers
fail to take into account the neighborhood.
A $100,000 home in one neighborhood could sell
for $80,000 to $130,000 in other neighborhoods.
Most buyers prefer a diamond surrounded by
other diamonds, not a diamond in the rough.
If you are selling a diamond in the rough,
be prepared to accept less. Just as you benefit
from a good neighborhood, you will also be
hurt by a marginal neighborhood.
7. Deal with unqualified
Ed and Edna have
just toured your FSBO open house and whip out
a contract for you to sign at full price! What
idiot wouldn't sign that? Answer -- the one
who wants a closing rather than a worthless
piece of paper. So many sellers fall into this
trap, especially those not working with an
agent. Accepting a contract from any prospective
buyer, then finding out a month later they
can't qualify for financing is an easily avoidable
mistake. The right way: Insist that prospective
buyers are pre-qualified before you accept
a contract and earnest money from them. Mortgage
brokers will do this over the phone for free,
in less than 10 minutes. Next, insist that
they make formal mortgage loan application
within a few days of contract acceptance. Even
then, continue to market your home, accepting
backup offers and keeping names and numbers
of prospective buyers in case the deal falls