By Bryan Montgomery
In the world of residential real estate, there are characters that always seem to have prominent roles: buyers, sellers, investors, landlords, tenants and first-time homebuyers. Ask any real estate agent to classify each of their current clients and it’s safe to say that they would fit under one of the aforementioned.
However, I’ve found it to be a very rare occasion that someone is dubbed a “first-time home seller.” I know what you’re thinking, “Well, wouldn’t they fall under ‘sellers?’” And that’s a fair question. Technically the answer is yes, but “first-time buyers” fall under “buyers,” yet a distinction is made for this group; and make no mistake, a distinction should be made. With such a large investment as a home, a person’s first go-round deserves special attention.
There are many mistakes and pitfalls that a first-time buyer would want to avoid. And the same rings true for a person that is selling a home for the first time. Each seller generally wants the same thing: the highest net, in the least amount of time, with the least amount of stress.
The process to achieving these goals can be very daunting. If you’ve never sold a home before, there can be many questions and complexities that if not addressed and made simple, can result in less profit, a longer-than-desired time on market and tons of stress. On the surface, some of these questions may be obvious:
- What exactly do I need to do to prepare my home to sell?
- How much should I list my home for and how much profit will I walk away with?
- When exactly should I list my home in order to close as near as possible to my desired settlement date?
These are some of the natural questions that a first-time seller would have, but once the process starts, they usually learn that there are more to consider, such as:
- Should I have my home appraised/inspected?
- What disclosures about my home am I obligated by law to make?
- How long will I have to consider an offer?
- How do I know if I’m negotiating too much or too little?
- In a multiple offer situation, what factors other than price should I use to determine the best offer?
- What sellers’ closing costs should I have to pay?
- What happens if a buyer backs out of the contract?
As an example of how not having prior experience can cost a seller, consider this question from above: Should I have my home appraised and inspected before going on the market?
Logic may lend to the answer being yes. An appraisal would inform the seller of fair market value and therefore provide an idea of what the list price should be. An inspection would reveal deficiencies in the home and provide the seller with a list of items they need to correct before selling.
However, in most residential transactions, it is the buyer who usually has the appraisal and inspections done, which means it is the buyer who incurs the expense. Sure, a seller is entitled to having them done, and in some situations it may be beneficial, but why spend the money – which can cost $900 to $1,200 total – for something that the buyer normally is going to order for themselves anyway?
This example is just one of many scenarios where lack of experience in selling a home could cost someone. Some first-time sellers think that selling a home is as simple as taking pictures, posting them to the internet and heading straight to the settlement table. Others may feel that it’s a way more complicated and intimidating task, involving spending far more time, energy and money than is actually necessary. The truth is while each situation will differ, there is usually a sweet spot in between the two extremes.
To arrive at this sweet spot, one of the best things a first timer can do is hire a qualified real estate agent who can walk them through the process. This will assist in making sure the process is neither underestimated nor overestimated, and that the seller garners the best deal possible. The first time selling a home can be and should be a great experience with the right person and information on your side.
The writer is a real estate professional with Coldwell Banker Realty in Alexandria.