5 Mistakes Sellers make in a Seller's Market

As a homeowner in a strong seller’s market, it can be really easy to see your neighbor’s’ fixer upper selling in four days for 15% over the list price and think “well, if that house can sell fast, then mine will fly as is!” But, it is still very important that you have a trusted real estate broker to guide you through the important choices that need to be made so that the specifics of your house in this exact market are taken into account. Here are some mistakes that sellers often make even in a market where they should be cleaning up:

Thinking you don’t need to stage or market the home well.

When preparing a home to go on the market, it is crucial no matter the market conditions, that your home is marketed and presented in the best light possible. You only have one shot to create a first impression with the buyers and that typically starts online with buyers swiping through the pictures of your home. Making sure that the photos and staging are the best they can possibly be will ensure that you drive buyers from the online marketing to the open house or a showing with their agent. Thinking the home will “sell itself in this market” is often a huge mistake. In a seller’s market, buyers are paying top dollar to get in contract and they expect the home to impress them. If the photos are dark, the house is cluttered, or the layout is unclear, buyers may eliminate it from their search even before touring. Additionally, great photos, staging, and online marketing doesn’t just drive buyers to the home, it also keeps them dreaming of living there as they mull over an offer and even once they are in contract. Often times buyers spend less than 30 minutes in a home before they decide how to offer but the photos, floor plan, and 3D tour keep them engaged and emotionally invested in the hours or days leading up to an offer deadline and during that 30 day escrow period. You want your home to be the kind that buyers brag about to their friends and post to social media. Buyers who are already dreaming of the plants they are going to buy for the living room are far less likely to walk away from the home when things get tense.

Pricing your home too high.

Overpricing a home is often the death knell of real estate and yet sellers often have a hard time pricing their home competitively for fear that they will miss out on the top dollar possible. Sellers hear that homes are receiving offers 20k, 50k, sometimes $100,000 over asking and they think “if prices are going so wild, I can get whatever I want.” However, that’s not how buyers approach it. Buyers are often willing to bid over the asking price when they have confidence that it will appraise for that higher value and when the competition of other buyers demand it. Most buyers don’t expect to bid lower or even at asking price unless the home has been sitting on the market for weeks. When pricing competitively, buyers are competing to get in contract and with that doesn’t just come with a higher price but also very seller favorable terms—often including appraisal and inspection contingency waivers. These terms make the contract period a much smoother process with fewer possibilities for negotiations and sale fails. On the contrary, when a buyer is the only offer, they can write a very buyer friendly contract, which allows them many opportunities to negotiate for repairs and credits. It also causes them doubt: “Why doesn’t anyone else want this house?” “Will it be hard to sell in the future?" and the dreaded “WHAT IS WRONG WITH IT?” Demand leads to buyer confidence. Competitive pricing leads to demand.

Not providing enough access for the potential buyers to tour.

It’s true that more buyers than ever are offering on homes sight unseen. However, this is still the exception to the rule. Most buyers want to tour the home and more buyers touring or popping in to an open house, usually leads to more offers. When clients can’t see the home at a time that is convenient for them, they may eliminate it from their search all together. This market moves fast and sellers usually only have a few days before they have a sense of how hot the property is and whether or not it is performing well on the open market. It is important to seize those first few days and capture fresh interest in the home while it is at its highest. If you have the flexibility to do so, get out of town or stay at a hotel for a few nights. Let your agent manage the showings and provide maximum access. Hopefully, you will have so many interested parties by the end of the weekend, your home will be pending and you can return home ready to pack!

Accepting an early offer without securing a back up.

There are some exceptions to this rule but if you have set an offer deadline and a buyer is pressuring you to accept early, make sure your agent is calling the other interested parties and encouraging others to submit sooner than later. Serious buyers don’t always offer immediately—especially if you have initially communicated that you will consider all offers on a certain deadline—because they fear that their offer will just get used as bait to lure other buyers to pay more. If you want to accept a really strong, early offer, just make sure that you aren’t doing so before all well qualified buyers have been notified. It’s easy to get eager and anxious during the first few days that your home is on the market, but it is your agent’s job to make sure they are leveraging all offers to work for you to get the best possible offer in the end. And, once you have a solid offer in first position, ask the other interested folks if they would like to be in back up. That helps insulate you from the possibility that a sale fail will force you back on the market.

Being stubborn during the contract period.

During a seller’s market, it is very easy to get a big ego. After all, people were fighting tooth and nail to buy your home just a few days ago. But once you get under contract, a little compromise is usually in order. Buyers are paying top dollar, waiving appraisals, and sometimes even forgoing inspections in order to buy your home and you are often making a sizeable profit. In many cases, you’ve already won! So, if the buyer asks for a reasonable credit or repair, meet them halfway. Ultimately, it is in the best interest of the sale for everyone to bend a little bit. After all, strong arming a buyer is the fastest way to land yourself in a sale fail and if you don’t close the deal, you’ve made nothing in profit and have lost time. If you know you struggle with compromise, one way to prepare yourself for this is to assume you will make a certain dollar amount less than whatever you get in contract for—aka budget for that compromise. That may help prepare your mind for what’s to come during the contract period. And also remember that when your agent is negotiating on your behalf, they recognize that a true negotiation is a meeting of the two parties wishes so that everyone gets most of what they want not a “my way or the highway” tough guy attitude. An agent who only cares about “winning the deal” will kill it instead of closing it, and that is the worst outcome for a client. Try to think of the big picture and avoid getting hung up on pettiness, even if you think the request is annoying. Is it in your best interest to compromise and sell on schedule? Then, what are you waiting for!