Unless you’re a home flipper, selling a home isn’t something you’ll do too many times during your life. So, it’s only natural that you know little to nothing about the process. Knowledge is power, my friend, so let’s bring you up to speed on how to avoid some of the most common mistakes that home sellers make.
1. Failing to see a lender
If you’ll be buying another home, don’t put your current home on the market until you’re pre-approved for the mortgage on the new one. The nightmare scenario looks something like this: Linda puts her home on the market and accepts an offer from a buyer. At this point she decides to see a lender to get pre-approved to buy her next home.
Her loan application, however, is rejected. If her current home doesn’t bring in the proceeds necessary for her to buy her new home with cash, she will end up as either homeless or as a tenant, instead of a homeowner.
Never take loan approval for granted. There may be something in your credit profile that you failed to notice and you’ll be locked out of getting a loan.
2. Not understanding your current mortgage
Another big mistake we commonly see is the seller that takes a wild guess about his or her loan payoff and has only a vague notion (if any) if there is a pre-payment penalty clause in the loan.
Closing costs are often a huge surprise for both homebuyers and sellers and they shouldn’t be. Don’t guess at how much you’ll owe, call the lender and get the current payoff amount and ask if there is a pre-payment penalty for settling the loan early. If so, find out how much you’ll be expected to pay out of the home’s proceeds. With a firm figure you’re better able to budget for the new home.
3. Allowing your emotions to intrude
Yes, I understand that you may have a personal attachment to your Billings house. Selling it, however, is a business transaction so you’ll need to guard your emotions at all times.
Especially when it comes to buyer requests. They may seem petty or even insulting so you’ll need to remind yourself not to take anything personally.
4. Panicking over the home inspection or appraisal
This common mistake may contain elements of number 3 on my list. It’s hard to hear that the home you’ve loved for so many years has problems or isn’t worth what you thought it was. Again, don’t allow your emotional attachment to the home intrude into the sales process.
Keep in mind that the appraisal and the home inspection are the two parts of the selling process that can cause the most problems, but there are ways to deal with these problems. Take a deep breath, remain calm and we’ll lead you through this.
5. Accepting offers from buyers without a loan pre-approval
In slow-moving real estate markets, it’s tempting to accept the first offer that comes along. It’s understandable to be worried that there may not be another offer for some time. Wasting time with a buyer who hasn’t been pre-approved for a loan, however, may end up costing money.
Once the offer is accepted, the home comes off the market and all marketing efforts cease. If it turns out that the buyer can’t get a loan, you’ve wasted valuable time that could’ve been spent marketing the home to approved buyers.
Sure, there are other mistakes that first-time home sellers make, but these 5 are the most common I see in my day-to-day business. Now, let’s get that home on the market!