Selling a property is a complex and time consuming process with lots of speed bumps along the way. Mistakes can cost a lot of money. So the more you can learn upfront, the less money you’ll waste trying things that don’t work.
Here’s a great list of big and little mistakes we’ve seen sellers make over the years.
- Not being prepared to sell
- Choosing the wrong agent
- Not spending money on the property
- Skimping on marketing
- Setting the wrong price or quoting a price
- Not accommodating buyers
- Taking offers personally
Not being prepared to sell
Not understanding in and out costs
If you want to sell one property and buy another, it’s not as simple as deducting the sale price of your property from the purchase price of the new property and financing the difference.
There are ‘out’ costs and ‘in’ costs involved in buying and selling property, which you need to account for:
‘Out’ costs for selling a property are:
- agent commissions (e.g. 2–2.5%)
- marketing/advertising (e.g. $2000–5000)
- conveyancing (e.g. $1000–2000)
- bank discharge fees (e.g. $500)
- capital gains tax (for investment properties) – talk with your accountant
- removal costs (e.g. $1000–2000).
‘In’ costs for buying a property are:
- Stamp duty (e.g. 4–5% of purchase price)
- conveyancing costs (e.g. $1000–2000)
- bank financing costs (e.g. $500–1000)
- removal costs (e.g. $1000–2000).
Once you’ve decided to sell, you need to go all in if you want a great result!
Get the property well presented, choose the right agent and promote the property well to give yourself the best chance.
Doing any of these things in an ambivalent or half-hearted way will affect your final sale price.
Selling with a tenant
If tenants have great furniture and are cooperative they can add value to the selling process. However, other tenants can be obstructive and have furniture that detracts from the house.
If you have the latter type of tenant, try not to sell while they still live in the house. It might be better to vacate the tenant, style the property and then put the property on the market.
Waiting until they’re desperate (or under financial strain)
Many sellers wait too long to sell and find themselves in financial stress. Try to start marketing early if you think this may happen. You don’t want the bank to take the property and sell it as mortgagee in possession. You’ll have no control of the process at all.
Be honest with your agent, as they can recommend a fast sales method (such as an auction) and make sure you retain control.
Not allowing enough time
You may need 1–2 weeks to get your property ready to sell. An agent then needs 1 week for photos, signage and web images before commencing home opens. Traditionally, it takes 30–60 days to get an acceptable offer on your property.
The buyer will probably need finance, which can take 30 days. Once the finance is approved, settlement is another 30 days. It’s now four months later!
So allow for this timeframe in your decision to sell.
Selling in quiet times
Every market has its best and worst selling times. Traditionally, the market heats up as the seasons do and quietens down in winter.
Additionally, you shouldn’t release your home just before school or annual holidays. Again, get advice from your agent.
Choosing the wrong agent
Using an agent with deceptive practices
Don’t fall for the low fee/high price trick!
Many less competitive agents will try to get your listing by quoting a high price and then lowballing the marketing costs. Some may even throw in the marketing.
Some agents promise the world but give you an atlas!
Always get three reputable agents to submit proposals. Discuss their fees and what marketing will produce the best result. Ask them for testimonials and perhaps the contact details of previous sellers.
Often the cheapest agent will actually be the agent who gets you more money!
Not Googling the agent
Do your own research on prospective agents. Check their Google reviews, as they will have both good and bad reviews (and the agent can’t filter the reviews).
Look at the Google star rating and number of reviews. Be sceptical if they have fewer than 20 reviews.
Rate My Agent is okay but agents will save only the positive reviews.
Choosing an agent who claims ‘I have a buyer’
The response to that from the sale agent should be: ‘I want an agent with 20 buyers!’
Every agency has a database of buyers: some with tens, others with hundreds and a few with thousands. The agency with more buyers (and the systems to communicate your listing to those buyers) should be your choice.
Signing up for a long period
The standard REIWA selling agreement is 90 days. Any longer than that isn’t normal.
The only time to sign up for longer is when your property will take longer to get ready for market.
Not trusting the agent
Once you’ve decided to appoint a particular agent, you should work with them as a team and have faith that your plan will work.
Trying to micromanage the process isn’t productive, so leave the details to them. Each agency has well-tested systems and processes to deliver a consistent result.
You should start querying the process or the agent only if they don’t do what they promise.
Not choosing a negotiator
One major asset that your agent needs is the ability to negotiate well with buyers to maximise your price.
Often, the only time you see if they’re any good is when they’re negotiating your price. And that’s too late!
One early clue is how good they are at negotiating their own fee. If you’re the better negotiator in this transaction, choose another agent!
You could also try role playing with a potential agent. Pretend you’re a buyer trying to submit a low offer and see how they handle it. If they can get you to raise your offer to an acceptable price, you should hire them.
Not listening to the market
The agent’s job is to give you regular feedback from potential buyers who are going through your property, including price, presentation and other factors.
If your agent doesn’t do this, jump on them to do so. A weekly written report is even better.
If you get continual negative feedback about an item, it may be cheaper to fix it than change your asking price (e.g. bright cabinets, floor tiles etc.). Sometimes you may need to adjust your price offering slightly to get offers (e.g. perhaps to a ‘from price’).
The important thing is to get this feedback and listen to the market.
Not spending money on the property
Not improving street appeal
Many buyers who look at your property from the street will just drive off if they’re not attracted to it – it doesn’t matter how lovely it is inside.
Walk to your front verge and study the garden, house, garage, driveway and fencing. Ask yourself if anything needs painting, pruning, cleaning, decluttering, removing or adding.
Selling ‘as is’
Selling a property ‘as is’ assumes the buyer will buy it in its current condition and then renovate, repair and remove at their cost. This will limit your buyer pool.
Instead, why not spend some money to increase your buyers and have them compete to maximise your price?
Selling ‘as is’ and ‘where is’ works only for old houses on development sites that will probably need demolishing. In this case, there’s no benefit for the seller to spend money on a property that will be demolished.
Presenting the home poorly
The more a property appeals to a larger buyer pool, the more money you’ll get. There are many ways that you could be reducing buyer interest in your home, including:
- disguising problems
- having ‘loud’ colours or decor
- presenting with poor furniture
- not staging
- not painting when needed
- not changing old or damaged floor coverings.
Fix problems: It’s important not to disguise problems. Most buyers will ask for a satisfactory building report and a condition that all gas, electrical and plumbing are in good working order. So you’ll probably need to fix them anyway or lose the deal.
Remove loud colours and décor: Don’t limit your buyers to those who share your taste. Try to ‘neutralise’ the home furniture and fittings without making it too bland.
Change old paint and damaged items: A fresh coat of paint isn’t expensive and can increase buyer numbers. You can often apply new spray coating to cabinets and tiles rather than replace them.
Your real estate agent can probably recommend changes, improvements, contractors, stylists and interior designers. They can also advise you where not to spend money!
Skimping on marketing
You often here agents say ‘We can’t sell a secret!’ and for good reason. Advertising agencies talk about marketing reach and depth – both of which are essential.
An analogy is using a fishing net on a boat rather than a fishing rod onshore. The better the marketing spend, the bigger the net and more buyers that come to your home!
Not understanding how buyers buy
These days, most buyers use the large real estate portals to find properties, such as:
So you should be using them to sell your property.
Where your property features on those searches is also important. Ideally, you want your property to feature first, and not last.
In the real estate portal business, the more money you pay for your listing, the closer to the front of the queue you’ll get. Talk to your agent about display costs on these portals.
Using dodgy photos
If 70–80% of buyer responses come through the real estate portals, you should use the best images to attract their attention. Use only a professional photographer – an agent’s iPhone won’t cut it!
Also consider twilight photos, video and aerial/drone photos to differentiate your property from the competition.
Not utilising social media
Social media real estate ads are those ‘pop-ups’ on Facebook – when you’re not necessarily looking for a property. These ads often create interest or buyers who aren’t currently looking at real estate portals.
You can create a specific audience for the ad to target the right buyer, and then analyse the ad’s analytics to determine its effectiveness.
Always include a social strategy in your campaign.
Setting the wrong price or quoting a price
As agents get 70–80% of all buyer responses in the first four weeks of marketing, many owners overprice their properties during this vital time and lose potential buyers.
Many owners rationalise this decision by saying ‘They can always put in an offer’. However, most buyers will actually look at a cheaper property and put an offer on that one first.
The best solution is to use ‘from prices’, ‘expression of interest’ or even ‘best offer by’. This will encourage all buyers to bid, and the seller can consider the best offer after 2–3 weeks of marketing.
Quoting a price
Similarly, in a ‘bullish’ property market – where there are plenty of buyers – it’s often better not to disclose a price at all.
Expecting to sell at the asking price
Your agent will usually suggest a sale price or sale range and a separate, higher figure as an asking price. The asking price is the starting point from which to negotiate down to the sale price.
However, the longer the selling process goes on, the more attached some sellers get to the asking price. They often decide that, if they don’t get their asking price, they won’t sell at all.
Remember: the asking price is to attract the buyer and give you ‘wiggle room’ to sell at the quoted sales price.
Not considering an auction
An auction can be ideal for properties that:
- are in high demand
- are relatively unique
- have a value that is difficult to determine.
A successful auction has many great advantages:
- The seller sells under their own terms of sale (not the buyer’s).
- The sale is cash and unconditional, with the deposit set by the seller.
- The seller doesn’t have to take the first offer.
- The seller can sleep well at night knowing they got the best price on the day.
Not accommodating buyers
Making buyers jump through hoops
Some sellers ask buyers to jump through hoops to get into the property and then wonder why it doesn’t sell. Here are some tips for making it easier for buyers:
- Make your property as accessible as possible to an agent who has a ‘hot’ buyer.
- Set up an open home schedule for 2–4 weeks in advance, so all parties know the open days and times.
- If a keen buyer wants to see the property but can’t make the open homes, try to accommodate the viewing. This person often ends up being the buyer.
Not vacating during inspections
Buyers may feel intimidated and won’t want to speak if the owner or tenant is in the home during the open home. This restricts the agent’s ability to do their job.
Buyers will talk more freely if the home is vacant, so sellers should leave before the open home starts. If you’re worried about valuables, either store them safely or take them with you.
If your tenant is unwilling to leave during inspections, offering them free movie tickets or rent subsidies for the inconvenience during these open home times can help ensure cooperation.
Some owners try to eavesdrop on conversations using security cameras with microphones. This is illegal, so please don’t do this!
Taking offers personally
We understand that you’re selling your home, which is important and highly personal. However, when you’re dealing with offers, you need to detach yourself from these negotiations.
Often, buyers will try a ‘lowball’ offer to see whether the seller needs to sell urgently. Talk with your agent if you get this offer and don’t necessarily reject the offer outright. Perhaps provide a counter-offer that is closer to your asking price.
While both parties are still talking, there is always the chance of a deal. Rejecting an offer shuts all negotiations down.
Rejecting the first offer
We once had a client who said ‘I always reject the first offer’. This belief cost them $47,000! Now he will always consider the first offer.
When a strong offer arrives within the first week or so of marketing, most sellers think ‘I’ll still get my asking price’ and counter the offer hard or reject it. More than half of these sellers end up taking a lower offer later and regret not considering this offer more.
Remember: it’s not about how long you’ve been in the market, but how long the buyer has been waiting for a property like yours. Often they have missed out on other offers and are offering a good price to avoid further disappointment.
When you understand why a buyer’s offer may be so good so early, you might be more likely to take the first offer.
Dealing with the highest offer only
If you’re fortunate to have two or more offers – say, a lower cash offer and a higher offer subject to finance – many sellers negotiate with the higher conditional offer first.
Why not negotiate with the lower cash offer first to see if you can get them to your price? That way, if your counter-offer is accepted, you’ll have a firmer deal that won’t fall over due to finance.
Dealing with unqualified buyers
Some offers arrive that are subject to ‘due diligence for 14–28 days’. These offers are risky, and buyers often walk away from these deals. And in that time, you’ve taken your property off the market!
When you receive these offers, two options are available:
- Allow the buyer to do their due diligence, but don’t agree to a contract. Tell them you’ll advise them if another offer comes in.
- Contact them with a ‘two working day clause’. This allows you to continue to market your property. If you get another acceptable offer, they have two working days to either go unconditional or withdraw from the contract. Discuss this with your agent.
This is a lot of important information, so if you have any queries or would like assistance with your property sale, contact Alan Bourke or anyone from Bourkes on (08) 9474 2000.