The strong demand for NELA real estate can make it seem as though home sellers have nothing to worry about. But even in a seller’s market, homeowners looking to cash in on their home need to beware of common blunders that can lead to a lower sale price or even a failed sale.
The number one mistake sellers make is to overprice their home, said Vanessa Yan, a longtime NELA real estate broker. “They see their neighbor’s home sell quickly and above asking and immediately assume they will have the same experience,” she said. “If you set your price too high, your home will sit on the market longer and you risk the dreaded price drop. You lose all your momentum.”
This appears to be a problem for home sellers in Eagle Rock. Fully 20 percent of homes that sold in Eagle Rock in February dropped their price at least once, according to data by Zillow. This was double the share of homes with price drops in Highland Park and Mount Washington, a sign that home sellers in Eagle Rock have unrealistic expectations.
Another mistake sellers make is to dump money into unnecessary home improvements, said Ms. Yan. “If you have a perfectly functional kitchen – it may be a little outdated, but everything works – don’t waste your money on a remodel,” she said. A recent study conducted by Zillow confirms this advice. Zillow found a kitchen remodel only yields a 50-cent return on average for every $1 spent.
It does pay, however, to spend a little extra upfront to stage your home. A survey by the National Association of Realtors in 2017 found that 62% of sellers’ agents said home staging helps homes to sell faster and one in three said it increases the final sale price.
Sellers should also keep in mind that time is money, which means the highest offer may not necessarily be the best. “Sometimes there’s risk involved in accepting the highest offer,” said Brian Fitzburgh, broker/owner of Broker’s Trust Real Estate Group. That’s because an offer price that far exceeds what the house may appraise for might cause the buyer to back out of the deal, putting the seller back at square one.
To avoid that, a high offer should be packaged with the buyer’s written commitment not to back out if the appraisal comes in lower than the offer and to put up additional funds if the appraisal causes the bank to lend less than planned. “You want an offer that leaves no question in your mind that the buyer can close on the sale,” said Mr. Fitzburgh.