As a real estate agent and as an attorney, I see many mistakes made by home sellers. These mistakes cause a variety of potential problems. According to research by economists, they lead to lower prices for sellers, longer times on the market before getting a sale, and worst of all, a lower probability of getting a sale done at all. Roughly 40% of listings don’t sell.
Here are some of the biggest mistakes I see:
- Not hiring a local realtor
I often see listings fail with realtors based far away. They don’t know our market the way a local realtor does, the same way we don’t know their market. They make mistakes in the listings, set pricing wrong, and create other problems that keep the house from selling. Their listing photos often show up badly on real estate websites.
This also applies to buyers. I talked to one woman who bought her home in West Boca using a Miami realtor. She had no idea that the neighborhood had a problem with car burglaries and home burglaries, and after moving in she also discovered concerns in the local schools. A local realtor would have helped her find a comparable home in a safer community with better schools.
Real estate agents who do most of their work in West Boca know the community better. They know how to price homes. They know what features are important to buyers here. Agents who spread themselves too thin or who do most of their work in other communities generally don’t match up.
- Hiring the dominant agent in your neighborhood
If an agent is selling several other houses in the same neighborhood, hiring them creates potential conflicts of interest. For example, imagine you want to get your home sold quickly. The dominant agent has 4 homes already listed in the neighborhood that are the same model as yours. Because you are in a hurry to sell, you should price your house less than the others. But that would undercut his existing listings and risk offending his other customers.Also while dominant agents know that neighborhood well, they may not follow similar neighborhoods that potential buyers are also considering. In one West Boca neighborhood the dominant realtor overprices the homes, which means they sit on the market without selling, often for a year or longer.If you hire a realtor who is not selling competing houses in the same community you avoid conflicts of interest and get independent advice from someone who gets the big picture in the larger community.
- Not hiring a quality realtorI’ve seen so many issues: Terrible photographs in listings, misspellings, bad directions, etc. Just today I was looking at a listing in Palma Vista that said the home is walking distance to the local schools. The closest of that community’s public schools is Sandpiper Shores Elementary, a 2 mile walk on US-441 and Glades Road. The other schools (Eagles Landing Middle and Olympic Heights High) are even further. I recently saw a condo in Century Village incorrectly listed as having a golf view – there wasn’t even a golf cart in sight. Multiple times I’ve seen listings where the home shows up in the wrong neighborhood on maps.
- Poor pricing decisions
If you price your house too high, it won’t sell. It’ll sit on the market with few showings and no serious buyer interest. And if you price it too low, it will sell quickly but you won’t get full value. This can cost you tens of thousands of dollars. A quality realtor will help you understand the current market value of your house and develop a sound pricing strategy.I see listings for overpriced houses all the time. And I keep seeing them because they stay up there. That Palma Vista house I mentioned earlier is listed $240,000 higher than any house sold in the community in the past year. When you price that high, few buyers will even bother taking a look at it.
- Choosing a Realtor who tells you what you want to hear
You invite two Realtors to discuss listing with them. You’ve done your own research and you’re confident your house is worth $600,000. The first Realtor shows you her research and says your house is worth $500,000. The second Realtor looks at your research and agrees with you that your house is worth $600,000. Do you go with the one who told you what you want to hear? Or the one who did their own research?
- FSBO – For Sale By Owner
Academic research shows that Realtors Results indicate that properties listed by non-realtors on the MLS setting sell at lower prices, take slightly longer to sell, and are less likely to sell than properties listed by REALTORs in a MLS setting. Who You Going to Call? Performance of Realtors and Non-realtors in a MLS Setting.
- Low Commission
Commissions are incentives. Buyers’ agents typically get half of the commission. They have the power to steer their buyers to houses that are listed with higher commissions. Some sellers go so far as to offer bonuses to buyers’ agents. These are generally visible to Realtors through the MLS software but are not visible to the general public. The buyer may not find out until the closing, if they even notice then.Of course there’s also the “you get what you pay for” problem. A seller’s agent who is willing to work for less may be less skilled. And if that agent has other properties listed at full commission, that incentivizes them to work harder on selling those other homes.
If you make these mistakes you can lose months while your house doesn’t sell. That can cost additional thousands in taxes, association fees, insurance, utilities, etc. Research shows mistakes like these lead to a longer time to sell and a higher risk of not selling at all.
There are two types of agents – most people don’t know this. Many of the agents split their commission with their broker, with the agent typically getting somewhere around 70% of the commission and the other 30% going to the broker.
Full commission agents get 100% of the commission, typically paying a fairly small transaction fee to the broker.
Economics research shows that “100% agents sell their listed properties faster and at premiums.”
- Not hiring a local realtor
- Warren Redlich works with United Realty Group, a full commission brokerage where the agents get 100% of the commissions from the transactions.