With inventory coming on and off the market at a rapid pace, it’s easy for buyers and sellers to make costly mistakes.
PAR’s leadership team chimed in on what the most common mistakes they see in their day-to-day business with both sellers and buyers.
“The biggest mistake a seller can make is to get the home on the market prior to being ‘show’ ready,” said PAR Treasurer Chris Raad. “In a competitive market, having the home cleaned and staged well with limited clutter is crucial. Even if some of the systems are dated, it will still show that the seller has had pride in the ownership of the property.”
PAR President Todd Umbenhauer agreed with Raad, and said sellers need to show their home in the best light. “I have frequently observed sellers who are preparing to put their home on the market take the position that they are not going to paint or replace floor coverings because buyers want to pick their own colors,” said Umbenhauer. “These sellers need to understand that Realtors® virtually never hear prospective purchasers say they are most interested in finding a home with drab paint and marred wall surfaces together with worn and stained carpeting. I advise sellers that if they think painting and doing routine maintenance seems like too much work to sell their house, buyers will probably feel the same way. I can’t think of anything that provides a better return on investment than a fresh coat of paint. Buyers love being able to move into a house that is fresh, clean, and ready to occupy. They can pick their own colors next month or next year, but for now then can move their furniture in and feel comfortable in their new environment.”
Umbenhauer also said most sellers need to clean up their homes and remove all the extra items cluttering rooms throughout the home.
“And for goodness’ sake, make sure locks and doors work effortlessly. There is no worse way to start a house tour than to have the Realtor® struggling to unlock the front door, while the clients stand there in sleet and freezing rain,” added Umbenhauer.
PAR President-elect Bill McFalls said that sellers need to take care of the basics. “I find that sellers still make the mistake of overpricing their homes, even in a so-called seller’s market and neglect to take care of simple things that impact the first impression of the home, such as painting the front door, landscaping, general paint touch-up, removing dated wallpaper and neglecting to have a professional stager,” he said.
PAR Vice President Bill Festa said that in today’s market, when offers come quickly, some sellers think they priced it too low. “If you prep them properly before the listing, it’s easier to rationalize with them. If you didn’t prepare them properly, you may have some sellers wanting to increase the listing price, which can be devastating,” said Festa.
Overpricing their homes and not staging them correctly may limit sellers. But buyers can also shoot themselves in the foot.
“The biggest mistake a buyer can make is to work with a Realtor®, mortgage company, title company or inspector who is not local,” said Raad. “There is no substitute for knowledge of the local market, customs and building standards. While a Realtor® will be able to give the best advice on the areas proximity to amenities, the mortgage and title companies can provide services that are customarily handled with more accurate costs.”
Festa said buyers being unprepared can lead to unhappy clients. “I think the ‘fly by the seat of your pants’ approach is the biggest mistake buyers make. They change agents, change criteria, change mortgage companies and, in some instances, change who is gonna be the actual buyer. I interview every buyer I work with. We have a 45 to 60 minute in-person session and discuss purchasing, agency, financing, inspections, costs and everything else that a buyer needs to know before we start looking. I started doing this many years ago and it has saved me a lot of time, money and anguish,” he said.
Umbenhauer said that in the current seller’s market, buyers need to be prepared. “Making an offer for less than the listing price will likely not result in the buyer becoming an owner,” he said. “I’m working with a young couple who qualify for a higher payment than they’re willing make. They are looking at properties they can afford to buy, but are not willing to take on that level of payment, so they want to make a lower offer. The problem is sellers have many buyers who are willing to pay full price, or even more. I have counseled this couple that they need to compromise on what they want in a house in order to be at a price point, where making a full-price offer fits their desired budget. It’s critical for buyers to identify the price range in which they are comfortable and adjust to the type of property that is found at that price point,” he said.