Six Real Estate Mistakes That Can Cost You

In real estate transactions, the stakes are high and even a small mistake can end up costing you thousands of dollars. Whether you’re looking to buy or sell, here are some common mistakes to watch out for. 

1. Not Getting the Price Right: One of the toughest pieces of any real estate puzzle is setting the right price. If you price it too low, you potentially leave money on the table. Price it too high, and it will sit on the market for too long, causing buyers to will wait until you’re desperate and then make you a cut-rate offer. The mistake many sellers make is to simply look around at the price of other homes in the neighborhood without thinking carefully about whether those home are comparable. So if you’re in the market to sell, your first step should be to hire a home appraiser. It might cost a few hundred dollars, but it’s an expense that can save you thousands down the road.
2. Not Fixing It Up: While hurrying through the process of selling a home, many sellers fail to take care of all of the little things, like a door that’s coming off the hinges, an overgrown backyard, or a chipped and peeling paint job. While these problems might seem minor, they add up and can cause buyers to view your home more as a fixer-upper than a dream home. Before you put it on the market, spend a few weekends making sure your home is looking its best.
3. Hiding Problems From the Buyer: Some sellers think they can conveniently “forget” to disclose problems to a buyer. While a buyer might not discover the problems during the inspection or walk-through, they are bound to eventually. And if those problems are severe enough, you could be in for some costly litigation. Don’t try to pull a fast one on buyers. Make sure they are informed in writing about any issues so that there is no cause for dispute after the sale goes through.
4. Wrecking Your Credit At the Last Minute: The home-buying process can be long and drawn out, which provides ample time for buyers to make some big financial mistakes. Many buyers fail to realize that a pre-approval is not a guarantee that you will land a loan. If you do something to change your credit status during that time — such as buying a new car, or missing a few credit card payments — the pre-approval numbers you were quoted can disappear in an instant. The bank might stick you with a higher interest rate, or lower the total loan amount, jeopardizing your chances of landing your dream home.
5. Getting Into a Bidding War: During a heated bidding war, emotions run high, which can cost you dearly. If you have your heart set on a house and want to go above the asking price, make sure you have someone to do the negotiating for you. Many novice buyers, looking to save a few bucks, will venture into the housing market without a buyer’s agent at their side. But a good buyer’s agent will be an advocate on your behalf and will be a shrewd negotiator  during the process.
6. Not Taking the Inspection Seriously: Most lenders will insist on a inspection before they sign off on the deal to ensure that the home isn’t about to collapse in on itself. Unfortunately, buyers often treat this as just another step in the process and fail to take advantage of the inspection. Follow along with the inspector and take detailed notes to get a sense of potential problems. Armed with information about a home’s faults, you can use the inspection as leverage to drive down the price.

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Tips for a Quick House Sale

As natural as the impulse might seem, try not to panic. You’re still in control of your house-selling destiny. You have options that will promote interest in your home and preserve your sanity.

The three most important factors when selling your home are marketing, presentation, and price. Let’s start with the last one, because that’s where the majority of people make the most mistakes in a hot market like ours.

Positive stats might tempt you to shoot for the moon, but you must keep your list price in line with your comparable market analysis recommendation. Those comparables — similar homes that have sold recently, in your neighbourhood — don’t lie. They’re the most accurate bellwether for what the market will bear.

If you haven’t had more than a couple of showings over a two-week stretch, you might want to consider lowering your list price.

(Keep in mind that the average time to sell in Edmonton is about 49 days, according to the Edmonton Real Estate Board; if your home has been on the market for less than a month-and-a-half, you can afford to be patient before moving to a price cut.)

Perhaps you factored in some top-line renovations into your list price — a granite countertop here, stainless steel appliances there. Proceed carefully. Buyers aren’t necessarily itching to honour the complete cost of that work, let alone eat up additional costs just so that you can pocket a profit. Sellers CAN make money fixing and flipping, but it’s not as easy as HGTV leads you to believe (more on that next month).

If you feel your price is solid and you’re still not getting any action, move on to marketing.

Too many A-list homes squander potential viewings and exposure because the photos are strictly B-list. Fuzzy, cluttered, poorly composed shots don’t make your home jump off the page. You’re in a competitive marketplace, with customers who have a lot of options and not a lot of time to consider them. Get professional photos.

Then, move on to the balance between open houses and private showings. Open houses can be very effective at generating interest, particularly after a price reduction, but they can also be a time-waster.

The key is to treat open houses like a business project: maximize efficiency and get the most bang for your time. Don’t spend all day smiling in your foyer. Two hours on a Sunday? Perfect. Too many people let their open houses rule their weekends.

The opposite holds for the private-viewing appointment. Within reason, you have to be willing to move heaven and Earth to make these happen. Buyers can be fickle; if they’re on a six-house viewing binge and they can’t fit yours in, there’s a good chance they’re gone forever. Unless there’s a can’t-miss element in your home that you’ve managed to convey in the listing, busy buyers are going to err on the side of convenience.

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