THE REAL ESTATE market may be in the doldrums, but that doesn't mean it's impossible to sell your home. Sellers just need to be savvy and not fall prey to common mistakes. Here are five missteps home sellers should avoid:
1. Asking Too Much
The single biggest mistake folks make is setting their asking price too high. In today's down market homeowners need to price conservatively or they risk turning off potential buyers, says Michael Corbett, author of "Ready, Set, Sold."
Figuring out how to set the price is tricky. Gone are the days when you can expect to sell your home for as much as your neighbor did just six months ago, according to the National Association of Realtors. So rather than looking at how much homes in your area sold for six to 12 months ago, compare prices for similar properties currently on the market. If you see a listing for a house that's sitting unsold for a few months, chances are the owners are asking too much and you'll want to set your price lower, says Corbett.
Watch our video for more advice on setting the right price.
2. Questioning the First Offer
Read our story here
The reality is that in any market a home's first offer is often its best, says Elaine Clayman, a real estate broker with Brown Harris Stevens. Typically, educated buyers will seize on a property they like with a competitive bid as soon as it comes onto the market, she says. Of course, given the glut of houses on the market, sellers should expect to receive some low-ball offers. Just don't assume that you'll get better bids the longer you hold out. As Clayman warns, the more time a home sits unsold, the greater chance a seller will have to reduce his price.
3. Failing to Respond to All Offers
What if you get an offer that's simply too low? Don't reject it outright. See if you can negotiate. First of all, you can't blame someone for testing the market after all, in today's market, many buyers are confident that they have the upper hand. Secondly, by entering into negotiations with one party, you'll gain leverage with other potential buyers, says Corbett. Most importantly, it allows you to tell brokers that your property is in play and sends a message that if someone is interested, then he better present a competitive bid quickly.
Just don't get cocky. During this process, it's crucial for sellers to set a realistic bottom-line price they're willing to take, even if it's several thousand dollars below asking, says Corbett.
Watch our video for more advice on negotiating.
4. Paying for a Home Stager
In a depressed market, it's more important than ever that your property stands out from the competition. But unless you're trying to sell a multimillion-dollar mansion, you don't need to pay a professional to stage your home. There are a number of free or inexpensive things you can do on your own to get your house into show condition. Most importantly, paint the walls. Nothing does more to brighten up a place, says Peter Comitini, a real estate broker with Corcoran Group. Next, he recommends getting rid of all the clutter, excess furniture and family knickknacks. Finally, make all the necessary repairs before your first open house. If a buyer sees a small problem, say, a leaky faucet, he's likely to wonder about larger issues like the furnace or roof.
Read our story here for more home improvements that pay off. Or watch our videofor more techniques on how to stage your home.
5. Picking the Wrong Buyer
Now more than ever, sellers need to select their buyers carefully. As we mentioned earlier, thanks to all the defaults in the subprime market, lenders are tightening their lending practices, making it more difficult for consumers to qualify for mortgages. So it's critical to find a buyer with a recent prequalification letter (issued no later than four to six weeks ago) for a loan.
Next, watch out for buyers who need to add contingencies to the contract, including a clause stating that the deal won't close until they sell their own home. A better bet is to look for cash-flush first-time home buyers or someone who has already unloaded his existing house. In a slowing market it's difficult to estimate how long it could take your buyer to find someone to purchase his dwelling, warns Brown Harris Stevens' Clayman. And if that property doesn't go for as much as he expected, that person may no longer be able to afford your agreed-upon price.This story was originally published on AOL on May 19, 2008.