Four Costly Mistakes Sellers Make (Even Though It’s a Sellers’ Market)
When you start to seriously consider selling your home, it’s normal to be concerned about making the most money possible. But since Denver is in an “extreme sellers’ market”—for our fifth consecutive year—you might be a little less worried. Shouldn’t it be super easy to sell for a ton of money?
Slightly easier, yes. But full-on super easy? No. The tough truth is that lots of people simply don’t know how to make and keep the most money possible from their home sale—even in a market like ours. And they end up making unfortunate decisions that cost them tens of thousands of dollars.
Yes, we see these losses far too often. So where do those sellers go wrong?
Here are four costly mistakes to avoid when selling your home:
Mistake 1: Allow bad real estate marketing.
The purpose of real estate marketing is to reach as many qualified potential buyers as possible.
“Qualified” means someone who is actually looking to buy in your neighborhood and in your house’s price range, is ready to buy with a lender letter or proof of available funds in hand, and has a real estate agent to help them submit their best offer ASAP (because the longer a house sits in our market, the less money you’ll make).
Good real estate marketing will get your home seen every place qualified buyers are looking. The home absolutely must be listed in your local Multiple Listing Service (MLS), as well as on Zillow and other syndicated channels where locals (and let’s not forget people moving here from out-of-state) will see it.
Literally hundreds of actual qualified buyers will see your home online with this strategy. Don’t rely on a For Sale By Owner sign in hopes that a “qualified someone” will just happen to drive down the street or trip across your Craigslist ad.
Mistake 2: Overprice your house.
This is so, so, (infinity “so”) important. Overpricing your house will absolutely destroy buyer momentum.
Overpricing doesn’t work because buyers are extremely high-price-aware already. Buyers are afraid of over-paying in any market, let alone in Denver’s extreme sellers’ market. Around here, houses priced higher than market value scare buyers away from even trying. Then, your house sits on the market for (gasp)a week. Or two. Since 60% of homes for sale in Denver went under contract in seven days or fewer in summer 2018 according to ReColorado MLS data, when buyers see a house that’s been on the market for more than a week, you know the question that pops into their mind:
“What’s wrong with that place?”
And then they start bidding…less and less, rather than more and more.
To get buyers to bid up a house, they need to think they might “get a deal.” Quite frankly, it’s not possible to underprice a house in this market.
I recently took clients to an open house priced at $150K, and we were certain it was worth $250K. Everyone asked the listing agent presiding at the open house (who turned out to be the seller) what was wrong with it because it was clearly grossly underpriced.
His response? “Nothing. I just want it under contract for the most possible by this evening.” That house sold for more than $260K.
Obviously, there’s a cap to how high a house will go, but the best way to find the absolute top price it will sell for (and how fast) is to determine a fair market value, then drop it enough to seem like a big bargain in this market.
Yeah, it’s psychological. But so are humans, and buyers tend to be human.
Mistake 3: Say “yes” to bad pictures.
What constitutes “bad” pictures? Any non-professional photos of your house being used for marketing purposes.
Do not—we repeat, do not—make the mistake of using non-professional real estate photos.
Pictures from your agent’s iPhone 6s are absolutely not going to get you on overwhelming response from all the qualified buyers you just reached through your marketing efforts. They just won’t.
Using a professional real estate photography company is by far the best way to go, and not just because buyers will love the pictures. These companies often offer great marketing add-ons like 3-D graphic tours that buyers can’t get enough of!Buyers see these and start to imagine themselves living there before they ever walk in the door!
Research shows up to 99% of qualified buyers use the internet as an ongoing part of their house hunt. This means that their critical first impression of your house and its market value will likely be online. The primary way they’ll determine if it’s worth seeing in person is through your photos.
The equation is simple: The better the photos = the higher the number of qualified buyers = the higher the offers on your house. More buyers = better competition, and competition is your friend.
Mistake 4: Choose a discount broker.
Yeah, I know that this is a hotly-debated topic, because discount brokerages seem like a great idea. Do you really need more than basic services to sell your home in a strong market?
As it turns out, even in an extreme sellers’ market, the higher the level of services, the way, way higher your profit.
Research indicates discount brokers consistently get far less money for home sales than a full-service broker.
Why?Without getting into a philosophical discussion of “you get what you pay for,” it pretty much boils down to this:
Discount brokers have already discounted their commissions. If they aren’t even willing to negotiate their own commission (their own livelihood) with you, how comfortable do you think they’ll be negotiating on your behalf?
Discount brokers have to save money somehow, so they have to be selective about their resources. And guess where they save money? Your marketing and your pictures, which you now knowcosts you exposure and money.
Buyers are typically aware when sellers choose discount brokers (the marketing and photos give it away). They often assume that because you’ve chosen lesser services, they can offer you a lower price.
Scraping the bottom of the barrel is not the way to make the most money on your house.
How to Sell Your Home for the Most Money Possible
Choose a broker who will make your home her #1 priority. That means she’ll use every ounce of her experience and expertise to get you what you want—fast. Yes, her commission may be higher than what the other guys charge, but when you have the right agent, you’ll absolutely make up that difference. Often way more than make it up.
Most stats show that this will (often way, way more than) make up for the differences in commission, yes, even what little commission a For Sale by Owner would pay (to the Buyer’s Agent).
If you’re willing to spend money in the right places, you’ll make more money.
Choosing the right broker should actually be the toughest part of selling your house. After that, she should guide you through the entire process so you don’t have to worry about all the details. And in the end, you’ll be able to brag about selling your home right in this extreme sellers’ market.
Ready to make the most money possible?
