Seven home-selling mistakes to avoid

With so much to think about, selling a home can be stressful for your vendors. But with your help, it will all be worth it once they get to settlement day.

To make this process as straightforward as possible for them, we pulled together a list of common home-selling mistakes. Please feel free to share this guide and tips with your vendors.

Not factoring in all costs

Some vendors may not realise that there are selling expenses to budget for. And that’s why it’s important to have a clear idea of these costs well ahead of time.

On top of the real estate agent fees, selling expenses usually include things like:

· Property inspection report (also known as building report): vendors can commission a building report to supply to potential buyers. Importantly, this pre-sale building inspection may identify potential issue areas before the property goes to market. Being able to show areas that have been fixed can improve the negotiation power of the vendor, potentially adding value and avoiding last-minute pull-outs.

· House repairs: in the best-case scenario, a fresh coat of paint, cosmetic changes and some clever landscaping are enough. In other cases, though, a more extensive renovation (like a new bathroom or kitchen) may help maximise the property value – especially in a competitive property market. Our ‘List Now’ deferred payment option can help your vendors fund their renovation needs, and until the house is sold, withdrawn, or at the loan term of six months, they won’t have to make any payments upfront.

· Home staging: costs vary widely, but generally, vendors can expect to pay from $1,000 to $5,000 (and more) for a five-week period. Once again, we can help them fund these costs, thanks to our ‘List Now’ deferred payment option.

· Other costs: from legal costs through to cleaning and moving costs, it’s important to take a holistic view when budgeting for home-selling expenses. For example, if your vendors need to declutter for home staging or are selling their home before buying a new one, they might need to rent a storage unit for their furniture.

Selling home privately

Real estate commission rates vary depending on the real estate agency, the service offered, and the type of property. But generally speaking, the average fees in New Zealand (according to agentfinder.co.nz) range from 2.95% to 3.95% of the sale price up to the first $400-$500k, and 2-2.5% for the remainder of the sale price.

While vendors may save money and have more control of the process by selling privately, very few choose to do so. In fact, there are many potential drawbacks to be aware of. For example:

· The sale may take longer – real estate agents know what buyers want, have the right professional contacts, and understand the market.

· They may overlook their legal obligations – there are specific legal obligations for anyone selling property in New Zealand, like sharing relevant information about building issues, unconsented alterations, and so on.

· They may not know enough about the market – from valuing the property and setting a sale price, through to choosing a sales method and drafting the sale and purchase agreement, selling property entails a lot of key decisions.

By selling with an agent, vendors can rely on the agent’s own expertise and insight, making the process less time-consuming and more efficient – a massive factor in this increasingly buyer’s market.

Pricing the property wrong

Again, this is where the expertise of a good real estate agent can make all the difference – especially when property prices are shifting fast as they are now.

Rather than relying on their emotions or rough estimates like those found at homes.co.nz, QV.co.nz or trademe.co.nz, a real estate agent can provide vendors with comparative market analysis based on recent sales in the same area.

Not disclosing issues or unconsented work

It’s common (and recommended) for buyers to request a building report and make the sale conditional on its results. If a major issue comes up during the inspection or the legal checks, it could easily derail the negotiation or even be deal-breaker. Make sure that your vendors are aware of the importance of full disclosure.

Not staging the home

Home staging may seem like an unnecessary step when selling a home. But the reality is that it can often be one of the key reasons why a property sells faster and for a higher price. An empty property requires the buyer to envision it as a home, while a staged property shows the buyer how they can use the space best.

Of course, vendors can always DIY, but a professional home stager knows all the handy tricks to maximise a property’s potential: from staging to scale through to hanging interesting artworks, placing lights strategically and playing with the aesthetic. Are your vendors looking for the right home stager? This article is for them.

Not investing in quality real estate marketing

Most buyers today use a combination of the internet and print to look for their next home. That’s why it’s important to showcase the property at its best, with high-quality photography and videography. An experienced photographer is always worth considering as part of a quality marketing plan, as they will know how to use the lighting to your vendors’ advantage.

Selling when in negative equity

Some people who bought a home in the past two years are finding themselves in negative equity, depending on how much deposit they put down and how prices are trending in their area.

Unless necessary, it’s essential – though still not great – to at least break even on the home sale. Vendors who are in negative equity (meaning they owe more money on their home than it’s worth) may not make enough money to cover agent fees and mortgage costs.