Real Estate Agents Rank Biggest Home Seller Mistakes
A recent survey of real estate agents conducted by ActiveRain confirmed activities a seller should avoid if they are trying to get their home sold for the best price in the least amount of time.
The results of this survey are no surprise to real estate agents, but sellers need to understand that eliminating as many hurdles as possible to the sale of your home will help you achieve your desired outcome.
Of the top mistakes, most are ultimately in the hands of the seller. Working with your real estate agent to minimize the impact of each of these mistakes will make the sale of your home a reality. The top mistakes real estate agents commonly see made by homeowners looking to sell their house follows:
- Overpriced Home
- Showing Availability – It’s Difficult to Set a Showing
- Cluttered Space – Unwilling to Remove Clutter
- Unpleasant Odors in the House
- Seller Unwilling to Make Repairs Prior to Listing
- Sellers Unwilling to Negotiate with Buyers
- Bad Photos in the MLS
- The Home is Just Plain Messy
- Sellers Who Like to Play Tour Guide During Showings
- Picking the Wrong Agent
Is a Comparative Market Analysis Important?
Knowing what a home is worth is a big challenge for both sellers and buyers. How much should you charge? How much should you pay? How do you know?
A Comparative Market Analysis (CMA) can help. It’s an evaluation of the listing and sales prices of similar houses in the same area. A CMA is useful for both those wishing to buy a home, as well as for those looking to sell their current property.
A CMA is different from an appraisal, which is a comprehensive evaluation of a property that’s performed by an independent professional appraiser and used to qualify the home for a mortgage. A CMA is used to make an appraisal, but it’s only part of the process.
A CMA is based on an agent’s knowledge of the area where a home is located. If the agent is experienced and has knowledge of the local market, the CMA should come in very close to the appraised value.
The Purpose of a CMA
While sellers use the CMA information to decide the price range for their home, buyers use CMA information to determine a price that’s fair for a property. On the other hand, real estate agents and appraisers use CMA information to decide the market value of a property. It is important to fix the right price for a house. If it’s too low, the seller will lose money. If the price is too high, the property may not sell.
How a CMA Is Prepared
The information needed to create a CMA is usually obtained from public records in the county where the property is located. The Multiple Listing System (MLS), a computerized listing system where real estate agents list properties for sale and search for required properties for clients, is another source of information for a CMA.
Usually, an agent will use three comparable properties that are located within a mile of the given property to conduct a CMA. It’s sometimes recommended to use six comparable properties–three that are currently for sale, and three that have sold in the previous three to six months. Each one is the same type of property, be it a duplex, a single family home or a condominium. If you live in an area where the real estate market is relatively sluggish, the agent may have to use similar neighborhoods in your city to develop the analysis.
How the Listings Are Compared
These are the house characteristics that are included in a CMA:
- Square Footage Houses with more square footage are worth less per square foot than smaller houses. So the houses compared should be as close to the same square footage as possible, give or take 200 to 400 square feet.
- Age The homes being compared should have been built around the same time. A house constructed in the last 10 years may have a higher price than one built 40 years ago–even if they are next door to each other.
- Amenities and Upgrades These features also raise the price of a house. For example, a home with a swimming pool may garner a higher price (unless, of course, the pool is in such poor shape that it actually detracts from the house’s value). And a home that is in good condition will cost more than a property that needs a lot of work to become livable. This becomes especially important when working with custom luxury homes. A luxury home specialist becomes critically important in these scenarios.
- Location This has a big effect on how much a home is worth. Although it’s largely a matter of the neighborhood–particularly the school district in which the property is located–there can even be differences within a single neighborhood. If one house has a corner lot or lake view, for example, it will have a higher price than a similar one facing a warehouse.
How the Price Is Presented
Once the research is concluded, the agent will give it to the seller as a report, which can range from a two-page list of comparable homes for sale in the market area or a 50-page comprehensive guide.
The report will contain a recommended selling price range, instead of a fixed price, because the properties selected may have some differences, such as age, size, physical condition or architectural style. Because the CMA is a subjective report based on the agent’s research, knowledge and experience, it is best to get at least two. They should be within 5 percent of each other if the skill sets off the REALTORS® are equal.
From the buyer’s perspective, the agent will usually provide a number of listings in the neighborhoods of interest that are reasonably priced for the market. This can give a prospective buyer a good idea of what she may expect to pay per square foot, based on current market values, even if she chooses not to make an offer on one of the properties.