Selling Your Home? Don’t Make This Costly Mistake
This post is by April Dykman. Yes, you read that right. April was recently wooed back to Get Rich Slowly and will be writing here a couple of times a month. She plans to focus on interviewing experts on money-related topics, which also helps her justify that journalism degree…
Bill had to sell his house quickly.
He was being transferred out of state, and the company wasn't footing the bill. Instead, they offered him a higher salary. Now he had to sell quickly or risk paying two mortgages.
But Bill wasn't sweating it. After all, his house was in a great neighborhood in a desirable part of town. He hired a real estate agent, confident that once the “for sale” sign went up, the buyers would come knocking. He'd get a quick sale at asking price, no problem.
Only a month went by, and there were zero offers. Bill had to move soon and was getting nervous about those double mortgage payments, but no one was interested. Then, to really rub salt in the wound, buyers were leavings tons of negative comments!
So what was the problem?
You aren't making your house ready for buyers
Bill refused to make his house buyer-friendly.
His real estate agent, Lynda Conway, had warned that unless he got the house show-ready, it would sit on the market and sell for far less than asking price. Lynda, who heads The Turner Team in Austin, Texas, and teaches for the Austin Board of Realtors, says Bill's mistake is a common one.
“Many sellers think they can just put a sign up and that's enough,” she says. “But buyers don't fall for that. They want to back up their moving truck, unload their stuff, and put their toothbrush in a cup by the sink.”
And when sellers refuse to believe they need to get their house ready to go on the market, they can suffer financial consequences. In Bill's case, his refusal to invest in sprucing up his home was about to cost him a double mortgage payment, not to mention the stress of trying to sell his house from out-of-state.
It can also result in a lower final selling price. Lynda recalls one seller who refused to make basic repairs and cosmetic improvements. “After a long time on the market, we finally got an offer,” she says. “But the owners felt insulted because it was $20,000 below list price. They wound up taking the offer because it was the only one.”
So if this mistake can cost you time and money, not to mention cause some serious stress, why do sellers refuse to make their houses more attractive to buyers?
The three reasons you aren't getting your house ready for buyers
Lynda says there are three main reasons that sellers don't get their houses in tip-top shape.
First, they don't believe it makes a difference. Like Bill, they think their house will sell itself, so the extra investment seems like a waste of money. “Bill was really cautious about spending any money because he was being transferred on his own nickel,” says Lynda. “He refused to believe that a coat of paint would make a difference.”
Second, they don't think there's a problem. Lynda says it's often difficult to convince smokers and pet owners that their homes don't smell like roses. Bill, for example, was both a smoker and a pet owner. “Some sellers don't realize it smells because they're so used to it, or else they don't think it's a big deal,” says Lynda. “But it's a huge deal to buyers.”
Third, they think they don't have the money. Remember the clients that got $20,000 less than list price? Lynda says that it wasn't until they were all at the closing table that they finally admitted to her that they didn't have the money to make her suggested improvements. “Some sellers don't want to admit that they don't have money on hand, but I can't help them if they aren't willing to talk about it.”
So how can you avoid these problems and sell your house quickly (and for list price)?
Make your house show-ready
You've got to invest in wowing potential buyers.
When Lynda showed Bill the negative comments people were leaving about his home, he finally relented, telling Lynda, “Okay, tell me what to do.” They took the house off the market while he worked his way through the to-do list. After $2,500 in updates and repairs, they put the house back on the market at the original price. In three days they received three offers.
“Buyers are picky,” says Lynda. “If you want to get top dollar for your home, you have to prepare for that.”
And the good news is that if you have more time than money, Lynda says there's a lot you can do yourself to improve your home's appeal.
So how can you make your house best in show?
Five ways to make your house show-ready (and net more money)
Lynda says here are five things you can do to make buyers fall in love with your home.
- Start packing now. You're about to move, right? So get some boxes, packing tape, and a Sharpie and put your stuff in storage. “Decluttering your home makes it look bigger and cleaner,” says Lynda. “You can make your house more attractive to buyers and get a head start on moving.”
- Give it some elbow grease. “Clean your house like you've never cleaned it before,” says Lynda. “Windows should sparkle. Make sure the house smells nice and fresh, not like last night's fish dinner or grandpa's cigars.” Lynda says sellers can deep clean themselves, or if they have more money than time, they can hire a professional.
- Do a daily sweep. Steaming the carpets and dusting the ceiling fans is important, but all is lost if your bathroom counter is cluttered with hair products or there are dishes in the sink. “Do a daily wipe-down on all surfaces, especially in the bathroom and kitchen,” says Lynda. “Keep counters completely clear to make them look as big as possible, especially important in a small space.” Lynda had one client who put her toiletries in her travel bag while her home was on the market. “She'd get ready in the morning like she was on a trip, then put the travel bag away and out of sight.”
- Make a good first impression. “When a buyer pulls up to your house, you have five seconds for that house to sell itself from the curb,” says Lynda. “And when the front yard looks inviting, that creates positive expectations about what you'll see inside.” Take care of the obvious, like lawn care and putting your yard gnome in storage. Then give the front door some TLC. “Your front door should be warm and fresh, she says. “You can give it a coat of paint or replace it entirely.” Lynda also recommends adding some color. “Buy cheap, colorful pots, potting soil, and some flowers,” she says. “I like the combination of rosemary and flowers because it smells nice and looks attractive.” The bonus of potted plants? You can take them to your new home!
- Deal with the bigger issues. Here's where it can get expensive, depending on the condition of your home. But if your house is in serious need of a coat of paint and a new roof, you have to either deal with those issues or adjust the price accordingly and wait for a buyer willing to take care of it themselves.
Finally, consider getting a pre-inspection. Lynda says almost no one does this because people think, “why open a can of worms?” But the can will be opened eventually when the buyers have your house inspected. And then those problems might cost you a willing and able buyer.
“When a buyer falls in love with your home, then finds out there's a major problem you didn't disclose, they fall out of love very quickly,” she says.
They're angry and distrustful, even if you honestly weren't aware of the problem. “Buyers feel like you should have known because it's your house,” she says. “And sometimes they'll terminate and refuse to even negotiate the repairs.” Lynda says when buyers are willing to negotiate, they may want the price lowered by double, or even triple, the cost of repairs. Ouch!
But she says if you get your home pre-inspected, you won't be caught off guard. You can attach repair receipts to your seller's disclosure or have the house re-inspected and attach the report. And most importantly, says Lynda, “you won't lose a deal or have to come down on your list price.”
What are some ideas you've used to make your home more appealing to buyers? Or from a buyer's perspective, what are the major turn-ons and turn-offs when you walk into a house?