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Five mistakes to avoid when selling your home

Mistake Number 1: Are you being realistic?

1. Are you prepared to experience “sellers remorse”?

The emotional bond developed with your current home will be stronger than you may first imagine. If you’re not prepared “emotionally” to change homes, you will find it hard to accomplish the three jobs crucial to the success of your sale:

  • See your home (and all it’s associated emotional attachment) as a house. It’s a commodity to be sold and to make the best of it needs a cool business-like approach.
  • Be able to remain realistic about your price and the merits of any offers received
  • Maintain the motivation, energy and critical eye needed to present your house in a way that gives you the best chance of selling at the highest price in the shortest time.

2. Do you know the true condition of your property?

Haggling over your price becomes possible once buyers find problems raised in the survey.

If you want to avoid this and put yourself in the best negotiating position possible, get to know the true condition of your property (before you put it on the market).

  • Most owners have a pretty good idea of this however, if you are in any doubt, here’s how to get the information you need: Commission a pre-sale survey from a Chartered Surveyor. This will cost anywhere from £350 – £1,500 depending on the size and age of your property.
  • Invite two or three local builders to come and give your property a “once-over”.

Builders have an excellent grasp of the common defects that residential property suffers from. Most builders will do this for free if they think there’s a job in the pipeline.

If the survey or the builder does find problems you can either:

  • Fix the faults and avoid having to drop your price later.
  • Get detailed quotes for the work needed. That way you’ll know what a reasonable price reduction would be when buyers start haggling.

3. Is your asking price too high?

Everyone wants to sell for as much money as possible. However, there is always the temptation to “test the market” and ask that little bit more. These days the Internet allows you to instantly compare all the property that’s for sale in any area. Because of this, the vast majority of buyers are just too well informed to overpay. Remember, a property is only worth what a buyer is willing to pay for it (you can’t force anyone to pay more, they will just walk away). What a buyer is willing to pay is directly linked to what other properties like yours are being advertised (& sold) for.

It may seem counterintuitive but in reality, “asking for more” often leads to “selling for less”. Whereas, “asking for less” often leads to “selling for more”.An unrealistic asking price will leave your home sitting unsold while all around others are selling-up and getting on with their lives. On the other hand if you advertise your property competitively, you will attract buyers.

The more you can attract the better because this breeds competition. Competition between buyers starts bidding wars and bidding wars result in higher sale prices.

Mistake Number 2: Are you spending too much time and money preparing for a sale?

When it’s time to sell it’s only natural to want to make the maximum profit possible. Because of this, many house sellers are quick to believe that fitting a new bathroom suite or kitchen, will be a sure way to make a quick and easy last-minute profit. Unfortunately, this is usually not the case and once “fitting costs” are factored-in, most last minute renovations projects barely break even. Instead, keep in mind that painting, cleaning & refinishing surfaces have always been (and always will be) the easiest, quickest and cheapest ways of increasing the achievable sale price of a property. When you’re selling, it’s far more profitable to just present what you have, as well as you can. In other words, unless a room or element (e.g. The carpet) of your property is:

  • Deeply unattractive
  • In total disrepair
  • Unsanitary.

Good presentation does take time and effort but you will be rewarded by dramatically enhancing the saleability of your property. To help you on your way, here is our eight-step plan to getting your property ready for sale:

  • Clean your house from top to bottom, inside & out.
  • De-Clutter.
  • Finish any DIY & catch-up on routine maintenance.
  • Understand that first impressions count & spruce-up the outside.
  • Depersonalise the interior.
  • Go neutral (it’s a cliché but it really does work).
  • Define the use of each room.
  • Eliminate bad odours.

It’s not expensive to cover these eight points but putting in the effort will undoubtedly pay off!

Mistake Number 3: Do you know the true market value of your home?

We would urge you to get a feel for the market you’ll be selling into and the value of your house before you speak to any Estate Agents. It is well known in the property industry that Estate Agents often overvalue property to gain new business. Flattery (i.e. giving a vendor an inflated idea of their properties value) is always a winning strategy. Unfortunately, once the vendor has signed the agent’s contract, it’s often not long before price reductions are suggested. A recent report from a consumer group investigated the Estate Agency industry. Researchers posed as sellers and invited 56 Estate Agents to value 14 properties across England. In six cases the highest valuation was 25% higher than the lowest. The most extreme case of inaccurate property valuation was in Tyne & Wear where the one agent valued a home at £200,000, while another suggested £325,000. That’s a £125,000 difference in valuation figures! Falling victim to an inaccurate valuation is a horrible situation to be in however, it is easy to protect yourself using the data available at Mouseprice.com

Their is a wealth of free property market statistics available on the website, plus the opportunity to buy personalised valuation reports. Whilst the Land Registry Comparables Search Service allows users to search for the prices that property like yours (in and around your area) recently sold for.

If you can find property like yours that has sold within the last few months, you’ll have a very reasonable indication of what your home will sell for.

With this knowledge you are then ready to get the opinion of Estate Agents. When you do speak to agents make sure you keep a couple of things in mind:

  • Never tell any Estate Agent what you think your property is worth. Always let them commit to a figure first. This will make it hard for them to manipulate their valuation in order to win your business.
  • Always let the Estate Agent know that you’re interviewing (and/or had valuations from) other agents. This will make them think harder about the figure they present to you.
  • Also, never tell any agent another agent’s valuation figure. It will just colour their valuation figure and take you further away from the truth.

Mistake Number 4: Have you fully read and understand your contract with your estate agent?

Under section 18 of The Estate Agents Act, before an estate agent enters into any contract with you:

* They must tell you what their fee will be. * They must detail any additional charges (e.g. For advertising and ‘For Sale’ boards) * Explain the circumstances in which you will have to pay their fee. * They must tell you if they or any of their associates has a personal interest in the transaction.

This must be presented to you in writing (normally via a “Terms of Business” overview document) otherwise the agent will not be able to enforce payment of their fees without a court order.

Also, The Estate Agents’ (Provisions of Information) Regulations 1991 makes it clear that if the terms:

* “Sole agency” * “Sole selling rights” * “Ready, willing & able purchaser”…

Are used by the agent, these terms (their meaning & their effects) need to be explained to you (again in writing).

It’s worth pointing out that the law only requires agents to make you “aware” of their terms of business. Once the Agent has done this, your agreement with them could be considered legally binding – Even if you don’t actually sign a formal contract! Always insist that once “terms of business” have been negotiated a contract is drafted that reflects your agreement and with which you’re happy. Get it all in writing so that if anything goes wrong you have a signed document for reference and protection.

There are far too many Estate Agents in the UK at the moment. This is because there are no barriers to entry (no license or qualifications are required to set-up as an Estate Agent). Because of this you need to recognise that Estate Agents are desperate for your business and so you’re the one in control (the one who can call the shots). In short, Estate Agents need you far more than you need them! There are a myriad of unfavourable terms that you can find tucked away in the standard Estate Agent’s contract. Although they’d love to tell you otherwise, everything from the “fee” to the “tie-in period” is negotiable.

Mistake Number 5: Have you researched and instructed your conveyancer early enough?

By early we mean, before you choose an estate agent and begin marketing your property! These days most conveyancing firms work on a “No-sale, no-fee” basis. Therefore there is no cost or risk in making your conveyancer the first person you talk to when thinking about selling.