Whenever you’re new to anything—a new job, a new sport, a new town—you’re bound to experience a bit of a learning curve.
For real estate professionals, the art of buying and selling homes is second nature. But for first-time (even, sometimes second and third-time) sellers, the process of getting their home sold can be a bit of a mystery. Most sellers are well-intentioned, but in the midst of what can be an emotional or overwhelming experience, agents often are presented with and hear a handful of seller misconceptions that can seem crazy and out-of-touch, and—yes—even ridiculous.
As an agent, tactfully correcting these sentiments is frequently part of the task and is part of the job description. So, here are some of the most common seller misconceptions I’ve heard and some smart insights and tips for sellers to help keep them from running a successful sale afoul.
1. “But I spent X years or $XX on that!”
One of the biggest perks of home ownership is the ability to customize the home to the personal needs and wants of the owner and their family. One homeowner may find that a 5 car garage with automotive lifts, custom built in storage units, and tiled floors is a necessity, while another may think that the dedicated theater room with top of the line audio/visual equipment is a wise investment. Sometimes it can be difficult for sellers to understand that while they may value (both emotionally and monetarily) a home feature, potential buyers may not always value that feature in the same way—and that means that they won’t likely be willing to pay for it.
I was once involved in a sale where the sellers had spent years cultivating a beautifully complex vegetable garden which the buyers, busy professionals, had no time or interest in maintaining. Not only were they not willing to pay a premium for it, they planned to rip it out and replace it with an outdoor kitchen and low-maintenance, low-water landscaping.
Sellers need to understand that while some home improvements can increase the value of the home, many should be looked at as features that enhanced their quality of life while the owner lived in the home. But, when it comes time to sell, it comes time to let it go. Emphasize that the enjoyment of those special features was the return on investment. If an eventual buyer also happens to love them, fantastic! But sellers can’t approach the home selling process expecting every buyer to share your value system and pay through the nose for them.
Home buyers are also encouraged to consider this fact and when making improvements to one’s home it’s often helpful to consult a local real estate agent to get an understanding of how the improvement will affect your home’s market value, and what type of a return you can expect on your investment.
2. “We just need to find a buyer who understands our tastes and appreciates our home.”
There are certainly occasions, with rare properties, where there is truly a narrow niche of buyers that will have to find, understand and appreciate a property. With acreage, loft space and converted warehouses, horse properties, and the like, this saying is not ridiculous at all.
But this saying is ridiculous when it is uttered by the owner of a home with potentially wide appeal as a reason for not staging or preparing their home for sale, or in the effort to avoid neutralizing highly personal design and decor choices, ie. wallpaper boarders matching the floral curtains.
Sellers need to remember the goal is to maximize their home’s appeal to a broad segment of ready, willing and able buyers who are willing to pay top-dollar for the home. Why should a seller limit their ability to get the most offers possible?
Under these circumstances I typically encourage sellers to visit open houses to allow them to see examples of sellers who staged their home appropriately, and those who kept the home ‘as-is’ and ask them which they feel is more prime for a top sale. If we don’t have time for this we encourage sellers to consider a Plan B ahead of time by asking them to agree on a time period (30 days, for example). If the home is still on the market, a pre-scheduled course-correction and staging of the home or a price reduction will be undertaken.
3. “I want to price it high, so I have room to come down.”
Now, in all fairness—there’s a time and a place for this. That is there are certainly markets where it’s very much standard practice for buyers to expect to come in below asking, and sellers can price their properties a few thousand dollars higher than the home’s actual market value and target price point without killing their deals. This strategy is appropriate and can be utilized when other local sellers are overpricing their own homes and by comparison these properties make a sellers own home appear to be underpriced, or a value.
If other sellers are pricing appropriately and the your home is priced too high over what the comparable properties, many buyers won’t even bother trying to negotiate down. Rather, they’ll go find a home with a more realistic price, they’ll wait until the seller lowers the price or they’ll wait until the home has been lagging so long they sense the seller might be desperate, and will swoop in with a lowball offer.
Even in a relatively hot market climate, the aggressively priced homes get the most buyer traffic and, accordingly, get the most offers. In turn, these bidding wars drive the eventual sales price up. Overpricing it might actually sabotage success.
4. “That offer is an insult— I won’t dignify it with a response.”
For sellers, a home represents a massive investment of money, time, hopes and dreams. It probably also represents tastes, style and some precious memories and homes are very personal to us.
That said, sellers need to detach themselves from the property once it’s on the market, and commit not to take anything personally.
Sellers need to understand that if someone offers to pay many thousands of dollars for their home, it’s not an insult, even if the offer is far short of what they are willing to sell the home for, or from what they believe it is worth. The would be buyer may be deeply misguided, and not yet experienced enough in the market to know that the offer was unreasonable. Or they might just love the home and be going for it, even though it’s really outside of their personal resources.
Finally, they might actually just be trying to lower the sellers expectation to get the seller to come down a bit on the asking price. Some buyers see making a very low offer as part and parcel of negotiations.
In any event, home sellers should almost always respond to an offer made by a qualified buyer. Sellers can always respond with what would be appropriate counter. They might be surprised at how even a very low offer can come together with a respectful, reality-based counteroffer and a little negotiating. In addition, while you are negotiating with this buyer another offer may come in which would put you into a multiple offer situation allowing you to avoid negotiations altogether with a request for highest and best offers.
5. “I need $X to put down on the home I want—let’s list the place for that.”
There are lots of respectable strategies for setting a list price, but all of them have their basis in one thing: data. Pricing can be the toughest conversation for many sellers however, homeowners need to understand the market sets the home’s price… Not some desire to cover the down payment on your next home or some other purchase. Ultimately market value is based on what a qualified buyer is willing to pay for a home—not what the seller “needs” to move.
If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please contact The Opland Group. We offer professional real estate advice and look forward to helping you achieve your real estate goals!
The Opland Group Specializes in Real Estate Sales, Luxury Home Sales, Short Sales in; Bexley 43209 Columbus 43201 43206 43214 43215 Delaware 43015 Dublin 43016 43017 Gahanna 43219 43230 Grandview Heights 43212 Hilliard 43026 Lewis Center 43035 New Albany 43054 Pickerington Powell 43065 Upper Arlington 43220 43221 Westerville 43081 43082 Worthington 43235