Mistakes To Avoid When Selling Home

Mistakes To Avoid When Selling Home By Home Sellers

Gustan Cho Associates are mortgage brokers licensed in 48 states

This BLOG On Mistakes To Avoid When Selling Home By Home Sellers Was UPDATED On April 22nd, 2019

Housing values have increased in the past couple of years throughout the United States. Many areas in especially California, Florida, Texas, Ohio, Arizona, Georgia, Colorado, New Jersey, Pennsylvania, Michigan, Kentucky, Mississippi, Illinois have home prices appreciating year after year after the 2008 real estate and credit meltdown :

  • Millions of homeowners have seen all of their equity evaporate
  • Countless of homeowners were left with loan balances that were greater than the values of their homes
  • In order to sell their home, homeowners needed to come up with cash at the closing table
  • This was since the value of their mortgage loan were higher than their property values
  • Many homeowners gave up on selling their homes
  • They thought that they needed to live in their home with an underwater mortgage for many years until the real estate values came back up

In this blog, we will discuss Mistakes To Avoid When Selling Home By Home Sellers

Housing Market Demand

Good news is that many homeowners with underwater mortgages can now consider selling their home:

  • Many homeowners do not realize the extent on how much their home values have appreciated
  • Selling a home requires proper planning if the homeowner is trying to get top dollar
  • Homeowners can easily list home as is will get an offer with a home buyer in a matter of days in many markets
  • This process sounds easy but selling a home fast for the amount owed on a mortgage loan and selling a home to get the top price to require two different tasks

Common Mistakes To Avoid When Selling Home 

One common top mistakes to avoid when selling home is not hiring a realtor. Pick the right realtor who homeowners get along with.  Realtor’s commissions need to be paid by the seller and it is not cheap.

  • Realtors charge 6% of the sales price
  • That can be a large chunk off sales proceeds
  • 6% on a $200,000 purchase price is $12,000
  • Many homeowners feel that whatever a realtor can do that they can do themselves
  • This can be true but realtors are experienced licensed professionals who can advise in homeowners getting top dollar for the subject property
  • Realtors can assist in selling a property faster than selling it by owner
  • Realtors will not just show the home to anyone who dreams of owning a home someday
  • Realtors will qualify the potential home buyer
  • They will review the pre-approval letter
  • Some realtors will go as far as contacting the mortgage lender of the potential home buyer to make sure that the home buyer is a solid pre-approved home buyer and not just a wannabe home buyer
  • Realtors can also help home sellers to price their home
  • Other mistakes to avoid when selling home is overpricing the home
  • Sellers cannot overprice their home
  • If the home does not appraise out for the home buyer, the deal will not happen
  • The price needs to be dropped
  • Trying to save money and listing home for sale by owner is a great idea
  • Sellers intending in selling home fast at the best price, the 6% commission they pay out is worth every penny

Get Pre-Approved Before Listing Your Home

Homeowners thinking of selling home and purchasing another home, I strongly suggest getting pre-approved for a mortgage loan for potential next purchase.

  • Home Buyers do not need to have a subject property to get a solid pre-approval letter
  • Lenders can qualify home buyers for the maximum loan amount they qualify 
  • Many times people make mistakes in assuming that just because they have great credit and good income that they automatically qualify for a mortgage loan
  • They assume they are qualify and do not get pre-approved for a mortgage loan for their future home purchase until they have a signed real estate purchase
  • Home Buyers can have great credit and good income
  • However, there could be potential issues in qualifying for a mortgage 
  • For example, borrowers can have a great credit score and great income but with 30 days late payments on mortgage payment history in the past 12 months, it can be a major problem
  • Credit reports contain errors
  • It can take time to correct errors
  • Home Buyers with perfect credit but with high credit card balances can trigger lower credit scores
  • High balances on credit cards will definitely lower credit scores
  • Paying down credit card balances can skyrocket credit scores
  • Higher credit scores mean yields lower mortgage rates
  • Paying down credit cards automatically does not post right away on credit report
  • Updates on paying down credit cards can take up to 45 days for it to reflect on the credit report

Make Sure That Your Home Is Clutter-Free

The first impression of a home is the most important in drawing interest by home buyers:

  • Homes that have tons of clutter will be a major turn off
  • Especially for first time home buyers
  • Removing clutter from the property is not costly
  • Clutter makes a major impact on how well property shows
  • When taking pictures, make sure all clutter is removed from the property
  • This includes clearing multiple vehicles
  • Make sure to take photos on a sunny day
  • Areas of the home that do not show well, try to avoid taking pictures there
  • Or take a distant picture so the defects are not so obvious

What Do You Do When Home Buyer Requests Minor Repairs To Be Done?

  • I have seen countless cases where the home seller feels that they negotiated their home purchase contract at a very low price
  • However, the home appraisal came back requiring minor repairs
  • Or the home buyer has ordered a home inspection and the home inspector noted several repair items that need to be done
  • Some homeowners will refuse in doing minor repairs requested by appraisers
  • Selling a home can be an emotional period of time for the home seller
  • But homes do not sell like cars
  • It takes time to have a home under contract
  • It is not unreasonable for a home buyer to ask a home seller to do minor repairs
  • When it comes to appraisal issues and the appraiser notes that repairs need to be done, the repairs need to be done in order for the appraiser to pass inspection and mortgage lender to approve the mortgage loan
  • There are no negotiations on this part
  • Whether the home seller pays for it or the home buyer pays for the repairs, that is a different issue
  • When repairs are requested, a home seller should do the repairs instead of risking killing the deal

If everyone in the home buying and selling process is on the same page, the home buying process should be smooth without any stress. The home buying process is an actual process and all parties need to cooperate. Please do not hesitate to contact us at Gustan Cho Associates with any questions at 800-900-8569 or text us for faster response. Or email us at gcho@gustancho.com.

This BLOG On Mistakes To Avoid When Selling Home By Home Sellers Was UPDATED On April 22nd, 2019

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