Going Overboard on Improvements: Some sellers will want to make certain upgrades to their home before selling, in order to maximize their home’s market value. However, going overboard with repairs, refurbishments, and renovations can defeat the purpose of getting the most for your house if you are not getting a one for one return on these major investments . Below are a couple of articles from Zillow.com that speak to this very issue. Some of the main culprits that sell seller’s short are remodeling of kitchens and finishing of basements. It’s an important lessons for sellers that the more money spent on improvements, the lower the chance the seller will break even at closing. An agent will consult with you on whether certain upgrades are worth the investment. Things to take into consideration will be the price range of the house, the profile of buyers in that price range, and comparative properties around the home. For example, if comparative properties around your house are being sold without an updated kitchen, then it is highly unlikely you will need to make that investment.

FINISHED BASEMENTS WARNING

https://www.zillow.com/sellers-guide/does-a-finished-basement-add-value/

Summary: “Homeowners in New England (Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and Connecticut) are likely to see the lowest return at 52.8 percent. Basement remodel costs average out at $76,429 in this region, but the resale return is only $40,377.”

REMODELING KITCHEN WARNING

https://www.zillow.com/sellers-guide/kitchen-remodel-roi/

Summary: For a minor kitchen upgrade, the national return on investment is 80 percent, meaning you lose two out of every ten dollars spent on kitchen improvements. It gets progressively worse the bigger the upgrade with a return of just 53 percent on major kitchen overhauls.

Getting a Pre-inspection: This may sound contradictory as a pre-inspection can help a seller spot any undetected faults and fix them before the buyer does in the buyer’s home inspection. However this is the exact reason a seller may not want to get a pre-inspection. If a seller finds a huge previously undetected problem with the house, perhaps a crack in the foundation, they are now legally obligated to share it with any potential buyers before an offer is submitted. This admission could deter many buyers from submitting an offer. Also, in a ultra competitive seller’s market, many buyers will offer to waive their home inspections in order to get their offer accepted, so a pre-inspection may not be in the seller’s best interest.

Overpricing: The main culprit of homes that are never sold or stay on the market for extended periods of time. When pricing a home, a seller’s agent will take into consideration various factors, using a comparative market analysis. The agent will compare your house to properties that have sold recently that are also similar to your home in style, location, and size. The agent will then recommend a fair listing price or price range to list your home. The reason a “fair” listing price is important is because buyers are also looking at your competitors when searching for your home. Competitors are houses that have similar amenities, similar square footage, and within a certain price range. Therefore, if the seller decides to overprice outside of the recommended range, your house becomes an outlier among its competition, and buyer will naturally gravitate towards the houses that offer more value and can more easily afford.

Not Ready for Showing: Getting a home ready for showing means making sure light bulbs are working, extraneous items are put into storage, and carpets and windows are clean to name a few. For a more comprehensive list, click here.

Discount Agents: Seller’s should be skeptical of seller’s agents who are offering to list their home for less than the standard commission of 5 percent. There are a few reasons why a discount agent could be bad for your bottom line.

1. Discount agents who are willing to cut their commission to get a listing may be willing to cut their marketing costs to make up the difference. Sellers should note that marketing costs come out of the agent’s pocket. A discount agent may cut marketing costs in order to reimburse them for their lower commission. This will have an adverse effect on your home’s final sales price, and ultimately put less money in your pocket even with the discount commission .
2. Cutting commission may scare off other agents. The 5 percent standard commission is split evenly between buyer’s agent and seller’s agent (each agent 2.5 percent of the sales price). A buyer’s agent who sees a discounted listing, offering only 2 percent versus 2.5 percent, could sway them to show their clients other properties. Less competition for your home ultimately means a lower sales price.
3. Agents who accept discount rates may not prioritize you. An agent who is willing to cut commission may be thinking of you as more as a transaction than somebody they actually want to help. Therefore, other clients who are paying the full commission may get preferential treatment from that agent, and faster response rates too.
4. An agent who can’t negotiate their commission can’t negotiate a good price for your home. It should go without saying that an agent who can’t negotiate the salary they need to pay their bills may not be the best person to represent your interests in an important transaction. This could lead to them negotiating thousands off the final sales price.

Skipping Home Inspection: In a raging seller’s market, buyers will be tempted to skip home inspections in an effort to win a bid for a house against the competition. All good agents will strongly advise against this as houses that often look put together can have huge underlying faults. The basement could have huge flooding problems, the foundation could be unstable, or there could be asbestos in the ceiling or floor tiles. Do not make the mistake of purchasing one of your biggest assets without first getting it vetted for major issues, otherwise you may be stuck with an expensive project you can’t get rid of.