When undertaking something as legally complex as selling real estate, there are many missteps that can be made along the way, and many of these can cost you dearly, both financially and legally. This is why you want to have an expert working to represent your interests and advise you on protecting yourself throughout the process. In this article, we’ll discuss some serious mistakes you can avoid when selling your property.
1. Selling on Your Own to Save on Commission
While it may seem appealing to sell on your own to save money on real estate commissions, in many cases you may come out with less money in your pocket when going the FSBO route.
First, unless you’re a trained real estate professional with access to the local real estate board’s MLS system, you won’t have all the information you need to set an accurate list price based on the most recent sales data for comparable properties. Could you be leaving money on the table? Or, are you pricing your property higher than what the market will bear, making your property unattractive to potential buyers?
Access to the MLS for your home also means access to thousands of potential buyers and their agents who are searching on their behalf. This is like having a salesforce of thousands working to help market your home. In addition to the agents themselves, your property listing gets syndicated to thousands of realtor and brokerage web sites which gives you maximum exposure in your market area.
The majority of real estate buyers work with an agent, and those agents will expect a seller to offer a commission to bring a buyer for their property. If you sell on your own, your property will likely be overlooked by agents because there’s no commission being offered. If an agent does bring a buyer, the offer will likely be lower to compensate for the buyer having to pay their agent’s commission out of their own pocket.
Most importantly, when you take a DIY approach to selling your home, you don’t have a real estate professional in your corner to advise you on issues of potential liability – and in real estate, there are many. Not knowing what you’re legally required to disclose as a seller, how to handle tenancies when selling a property, or what clauses you should have in a contract to protect yourself are just a few of the ways you may become vulnerable to lawsuits or other financial liabilities down the line.
Don’t forget – when it comes time to negotiate, it’s always best to have an experienced professional working hard to get you the best possible sale price for your home.
2. Setting Your List Price Above Market Value
The old-school strategy of pricing a property high so you’ll have room to negotiate is a thing of the past. Today’s real estate buyer is savvy and does in-depth research online before making a purchase decision. That means they know what a property is worth and will overlook properties which are overpriced from the get-go.
Setting the correct price is crucial to make sure your property gets the most interest possible when it first hits the market.
If you set the price too high, you risk your home sitting on the market for an extended period of time. When this happens, the end result is typically a lower end sale price than you would have achieved had you priced the property properly at the outset.
When a home doesn’t sell after being on the market for a reasonable amount of time, this raises questions in buyers’ minds – what’s wrong with the property? Might the seller be unreasonable and unwilling to negotiate if we make a market-value offer? These concerns may prevent serious buyers from giving consideration to your property. Without adequate interest, to sell, you’ll need to look at adjusting the price later on. Statistics show that the final sale price of a property which was not priced well from the beginning is typically lower than it would have been if the home were priced correctly when it was initially offered for sale.
3. Not Completing a Property Disclosure Statement
While sellers are not required to complete a Property Disclosure Statement, there are compelling reasons to do so.
First, when a PDS is not available, or one is simply marked through and signed, this raises a red flag of suspicion for many buyers. What might the seller be trying to hide?
Also, completing a PDS serves as written evidence of information provided to a buyer about the property. This means it’ll be harder for them to make a claim about an issue later on if it was mentioned in the disclosure.
As a seller, there are many things to consider – getting adequate market exposure to sell your home for the best price, protecting yourself from potential liability, and knowing what disclosures you’re required to make. Working with an agent is an investment in the best possible result for you.
Are you considering selling your home? I’d be happy to help you determine the current market value of your property and discuss any questions you may have. Give me a call at 604-910-7777. I’m always happy to chat.