6 Critical Times Sellers Can Lose Money
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By Steve Bradley
The first critical time you lose money in a real estate transaction is when you’re preparing your home, or your lack of doing it at all. Make certain to take time and prepare and stage your house properly, and listen to your Realtor’s staging advice. This is a critical point and I see a lot of people do it at different levels. I suggest you get it all done before you’re ever active.
Very often, I’ll have a seller that says, “I want to be on the market by this weekend, so let me get all of these major items done and I’ll finish the rest over the next couple weeks”. And my answer to that is you’re throwing money away. Make sure you get it all done. You’re better off waiting a week than not completing all of your staging prior to being active. So pay attention to your suggestions from your Realtor, you’re going to be glad you did.
The second critical time you lose money in a real estate transaction is when you’re pricing your home for the market. If you price too high, nobody comes in, you chase the market down, and you end up losing a lot more money than if you would have priced properly in the beginning. Talk to your real estate agent about what it is to chase the market and they will share for you, in painful detail, how many times they’ve seen a seller lose money in this process.
Price too low and almost the same thing can happen. You end up having people that offer you less money because they think that you’re desperate.
The third critical time that you lose money in a real estate transaction is during the offer negotiation phase. You want to make sure you have a good real estate listing team on your side that has negotiated more than just a few contracts. You need somebody with the experience to help you through the difficult terms that are included in an offer and make sure you don’t lose money along the way.
The fourth critical time in a real estate transaction you lose money- during the inspections. Seems obvious to a lot of people, but this is where I see thousands of dollars disappear for some home owners. Make certain to take time and consider your options, and these are items that can be negotiated, so take your time and figure out what your response is going to be. Listen to the advice of your real estate agent, but they should also be listening to you to get you the best results and save you from losing more money.
The fifth critical time you can lose money during a real estate transaction is during the buyer’s appraisal. If the buyer’s appraisal comes in below the contract price, they probably have the option to void the offer based on that. And if they do, you will have lost money based on now you’re going back on the market and you’re going to have to pay additional mortgage payments and utilities and HOA fees or association fees. So you definitely want to make sure you have the ability to respond to a low appraisal.
A good listing team is going to have some options for you there on how to try to solve a problem like that when it does come up.
The sixth most critical time that you can lose money in a real estate transaction is right at the end, during the buyer’s walkthrough. Now, while that process has changed greatly in Virginia, it’s still an opportunity, if there’s a major problem found, for the buyer to come to you and start negotiating issues that need repaired that weren’t there before. And if your Realtor doesn’t have the experience to manage that, you could find yourself losing even more money at the closing table that you didn’t expect to.
If you have questions about selling or buying real estate in Northern Virginia, we would love to hear from you.