7 Seller Pitfalls That Cost $$!
1. Leasing a furnace and A/C:
The decision to lease furnaces and air conditioners is usually born out of an urgent need to replace broken down equipment, most often on winter’s coldest days. It may seem like the wisest thing to do, given the low up-front cost and the ‘affordable’ monthly payments.
The problem we see, when a seller lists their home, is that buyers almost never agree to take over the payments, no matter how affordable. This forces sellers to pay out the rental contract at a rate that can be double or more what the equipment would have cost if it had been bought outright. It is not unusual to have a final bill from the rental company that is over $10 000.00, which comes right out of the hard-earned equity that has been built in the property.
2. Not completing needed repairs:
Selling your home, especially while you still live there, is exhausting. It is all too easy to get to the finishing touches and convince yourself that buyers will see past a loose door handle, a leaky faucet, or a patch of chipped paint. The reality is that they will not see past it, and it will cost you.
There are two types of buyers: Ones who are looking for a project they can work on themselves, and ones who are looking for a house that is move-in ready. The first group are looking for a deal. Leaving repairs undone gives those buyers the feeling that they have some leverage to negotiate on price.
To get the highest price, it is important to have buyers see that the property has been well maintained and that attention has been given to detail. If you are (understandably!) too tired to do all the little repairs that are necessary, it is well worth it to hire someone.
3. Failing to declutter, clean, and stage the property:
Closely related to item #2, failure to clean and declutter can create a perception that the house and property have been neglected. Remember that buyers need to see how much space they have, so clear away all but necessary items to show off your square footage! Take the time to deep clean (or hire someone to clean it for you – you’ll be convinced once and for all that not all heroes wear capes…some wear rubber gloves!). Even a home that is outdated will sell more quickly if it has been thoroughly cleaned.
As for staging, we could quote reams of testimonials about the value of this step. You need not replace all your own belongings with rental furniture, but it is wise to consult with a neutral party (a stager) who can make recommendations about how best to use your own furnishings and décor items to showcase the different spaces in your house to make it most appealing to potential buyers. Since this consultation is often part of the package being offered by your realtor, make sure you take advantage of it!
4. Pricing your property too high:
This mistake is easy to make for several reasons. The most common is an emotional attachment to a home that makes us believe that our home is more special, more beautiful, and therefore more valuable than comparable homes that have sold in the neighbourhood.
Buyers, though, are not in the slightest bit emotional about the house as they walk through the door. In fact, they are, in all likelihood, looking for reasons not to buy it. According to the website insightsquared.com, buyers are naturally suspicious, crave value, and are more committed to fleeing losses than to seek gains.
This means that they will naturally (and maybe even subconsciously) tend toward comparing a property unfavourably with its competition.
Another type of flawed reasoning that leads to overpricing a home is the thinking that people will simply make a lower offer if they don’t want to pay the asking price.
The reality is that the vast majority of buyers will simply walk away, and the property will stagnate on the market unnecessarily. Once there has been a price reduction, suspicious buyers will be more prone to assume that something is wrong with the property, and offer less for it than they might have if it had been priced correctly.
5. Buying before you sell:
This one puts chills down our spines. Unless you are in a position to carry two properties until your current home sells, we never recommend this course of action. Signing a contract to buy a home you may not be able to afford to close on is a dangerous financial risk that exposes you to being sued, in addition to the loss of any deposit money.
The housing market can turn suddenly at any time. If you cannot weather a downturn, it is not worth taking the chance that your home could remain unsold.
If you fear not being able to find a property that you like after selling your home, consider putting an offer in on condition of sale of your property. You may have to pay a little more for the house you want, but it will cost less than the losses you could incur by gambling with your investment.
6. Not allowing showings:
There are circumstances that make it tough to accommodate showings: Shift work, young children, pets, illness, and other things. However, to get a house sold, it must be available to be shown – especially in the crucial first couple of weeks. Buyers who find it impossible to get in will just move on to the next listing, and we don’t want that to happen!
If you know you will struggle to live around showing times, work with your agent to brainstorm some ideas for ways to make the property accessible:
- It might be the ideal time to take a weeklong vacation and allow the flurry of activity to happen while you’re not there.
- Some shift workers find it easiest to stay with friends or relatives for a couple of weeks so as to not have their sleep patterns disturbed too badly.
- Pets, if they cannot be in the house, might be placed in daycare while you are working, so as not to traumatize them with the presence of strangers in their home.
- If you must restrict showing times, try to be as clear about allowable appointments as possible at the time of signing. Your agent can put notes in your listing to minimize the frustration of buyers who are trying to book appointments.
Finally, if you do have to cancel a showing that has been booked, offer a time to reschedule to encourage buyers to try again ASAP.
7. Not disclosing hidden defects to buyers:
As tempting as it may be to hope that a buyer won’t notice the “slight leak” in the basement or ask about the fire that happened a few years ago, that is not the best course of action.
In Ontario, buyers may have up to 15 years to initiate court action against a seller in some cases. The Seller then has to prove that he or she could not have known about the defect.
Given the risk of having issues like these come back after many years, we (and many lawyers) strongly recommend disclosing defects from the beginning, thus avoiding the stress of dealing with problems long after the sale has closed.