It may not rank up there with the death of a loved one, but selling a home and moving to a new one is considered one of the most stressful life events a person experiences. There's the nostalgia factor — the memories made in the house — but also a more practical side: The vast amount of prep work and paperwork required to get the house ready to enter the real estate market. Lots of people get through the process, however, and move on to their happily-ever-afters. To join those ranks, a homeowner needs to take the process seriously and avoid the worst mistakes a seller can make. Here are nine of them.
Read More: Most Common California Home Seller Questions
1. Deciding to Go It Alone
Real estate agents are trained professionals in California. In order to take the licensing test, they must complete college courses related to the state's real estate laws and become familiar with the procedures and forms required for each step in the process. But this type of assistance doesn't come free; residential sellers in the state pay a negotiable commission, most often 5 or 6 percent of the sales price. That's enough money — $50,000 or $60,000 on a million dollar home — to cause a seller to think about handling her own "for sale by owner" transaction.
While only those holding real estate licenses can sell a house for someone else, a homeowner in California does have the right to sell her own house. This may be a good option for a seller who has experience in real estate and/or business, as well as the time and energy to invest in the process. But, according to Zillow, less than 10 percent of sellers get to the finish line without an agent.
Selling a house is a heavily regulated area in California. Every step of the way, from setting the right price to marketing the listing, is easier with experience. If a homeowner does decide to sell her house, she should retain a real estate lawyer to help complete the requisite paperwork. Choosing to go it totally alone may save money in the short term, but it could backfire over the long term. Failure to make complete disclosures, for example, can trigger a lawsuit against a seller.
2. Picking a Relative or Friend as an Agent
While all California real estate agents must pass the licensing exam, that doesn't mean they are all equally experienced. Some have been practicing for 20 years in the same town; others are on their first sale. And even an agent experienced in one California county may not be up to speed in other regions of the state. That's why home sellers need to interview real estate agents early in the selling process to select someone who has considerable experience with selling residential real estate in their city and neighborhood.
If a homeowner has a relative or a friend in the real estate business, it's easy to select a familiar face, but that can be a huge mistake. An agent experienced in listing homes in your part of town is going to be on top of municipal rules, home values and the current state of the market. Picking someone with local knowledge and experience makes a quick, profitable sale more likely. Even if a relative offers to reduce the sales commission, a home seller may be better off with an agent who acts strictly in a professional capacity. The agent will be motivated to get the house sold for the highest price possible, since that is how she earns the highest possible commission, and will focus her energy on that goal.
3. Selling Without Considering Timing
Are there better and worse times of year for selling a home? The answer may depend on where the home is located, but it's a big mistake to put a house on the market without considering timing. In areas with cold winters, experts say that a seller will get more potential buyers and higher offers in warmer seasons than around the winter holidays. On the other hand, some canny real estate agents who know their housing market might recommend putting a house on the market in winter. This is sometimes a good strategy when there are many more sellers than buyers in the summer months. In this type of market, it can be wiser to sell when there are fewer houses for sale.
If a seller brings an experienced agent on board, that agent will provide invaluable insight into marketing in the area. She will advise the seller as to marketing trends and outline the pros and cons of selling in different seasons.
4. Opting to Sell Without Prepping
Preparing a home for sale is an essential part of the selling process. This can involve anything from a new coat of paint to replacing the roof. Some owners who sell their own homes put them on the market without any repairs in order to "test the waters," but this can backfire badly. A home that remains unsold for too long can ultimately be shunned by prospective buyers as undesirable.
The amount of time and money a seller needs to put into prepping a home varies depending on how old the house is and what maintenance has been done. Experts recommend a thorough professional cleaning as a minimum. Ideally, prepping also includes removing the seller's personal property. Some sellers even rent storage units for a few months to store their belongings. Staging — bringing in leased furniture, rugs and interior decor to make the house look its best — is increasingly common in real estate sales in California.
With older homes, some experts recommend that the seller schedule a home inspection before listing. This allows the seller to address any big issues with her own team of professionals, rather than negotiating with a buyer about the problems later. A real estate agent will be able to arrange for a pre-listing inspection.
5) Failing to Boost Curb Appeal
Another of the most common home selling mistakes is failing to understand the importance of the first impression a house makes on potential buyers. This is known as curb appeal. While cleaning and polishing the inside of the home is important, the very first thing a buyer notices is the outside of the property.
Curb appeal starts with the home's exterior, including the condition of the paint, the type and cleanliness of the windows and how well the front porch or patio is maintained. While the seller may not want to pay for a complete repaint of the exterior, any visible damage should be repaired. Curb appeal also includes every aspect of the landscaping of the home from the curb to the backyard. A lush lawn or mature trees add to curb appeal, while weeds in the flower beds and broken fences might frighten off potential buyers, or at least make them hesitate to offer full price.
6) Using Poor Listing Photos
Even before a potential buyer drives by a house for sale, he is likely to take a look online. That's where good listing photos come in. Professional quality photos present an enticing view of a home for sale with crisp, clear images taken on a nice day and shots of the home from its best angles. Using personal photos for listing photos is usually not the best choice.
A good real estate agent will insist on top-quality photos and may even recommend a video of a walk-through of the property. This type of imaging is a big part of marketing these days and can lure buyers to attend an open house or request a private showing.
7) Overpricing Your Home
A seller naturally wants to get the highest price possible for her home, but she needs to realize that overpricing is not a good idea. A realtor will help figure out a realistic asking price by looking at the prices comparable homes sold for in the area. "Comparable" is a term of art in the real estate business, but it generally means houses of similar size and condition. This can vary from block to block in some California cities, and current information about recent sales is essential.
A seller should heed the real estate agent's advice in terms of pricing. In some markets, agents may recommend low-balling the price to encourage a bidding war. In others, a house is more likely to sell quickly when priced realistically. It is very unlikely that a realtor will ever recommend overpricing the home. Pricing a home too high can have a negative effect, deterring buyers from making an offer and causing the house to sit longer on the market. When a seller must lower the asking price, buyers may feel they have the upper hand to negotiate an even better deal.
8) Taking Negotiations Personally
Selling a home can be difficult for a seller who remains connected emotionally to the dwelling. While it is natural for home sellers to have fond memories, it is one of the big home selling mistakes to maintain that emotional attachment during the sales process. When a homeowner decides to sell, he needs to get his emotions in check and behave like a businessperson in order to secure the best possible deal.
Real estate agents prefer the seller to move out of the home before the first showing. If a seller opts to remain in the home, he must be prepared for, and willing to deal with, multiple showings to potential buyers and a few open houses as well. He needs to reduce or remove clutter and take the kids and pets away from the property before potential buyers arrive. Buyers are likely to purchase a home only if they can visualize themselves living in it, and this is more difficult if the seller and his family are present.
Finally, sellers who take negotiations personally are much less likely to make a sale than those who are able to keep a professional distance. A realistic seller understands that a buyer will uncover at least a few issues in the home inspection and may well request repairs. A seller who views this as a personal affront makes the sales process more difficult.
9) Hiding Existing Problems
Covering up problems may be the last on this list, but it is perhaps the very worst of home selling mistakes that people can make in California. California takes real estate disclosures seriously, requiring not just the seller, but also the agent to advise a buyer in writing of any problems or potential problems with the property. The seller is responsible for completing the Transfer Disclosure Statement form and the Natural Hazard Disclosure Report/Statement, among other forms. The laws apply to virtually every seller of residential property, whether the property is a mansion, a condo or a mobile home. Disclosure documents are intended to remind California home sellers of their legal obligation to be open and frank about a property’s condition and history. Sellers can be sued for hiding problems or defects.
What does a seller have to disclose? Essentially, California law requires a seller to disclose anything "material" about the property or its history that could impact a buyer's decision to purchase. This includes everything from structural problems, like a leaky roof, to any deaths that occurred on the premises within the past 36 months. A seller must disclose the condition of all appliances in the house, details about any additions or renovations, as well as neighborhood noise problems.
If a seller fails to disclose issues or problems that she was required to reveal to the buyer, she may be subject to a court action. The buyer can sue for compensatory damages equal to the cost of repair and any diminution in property value resulting from the defect. If the failure to disclose was malicious, the buyer can also seek punitive damages which are awarded not to compensate the buyer, but to punish the seller.
- Thrive Global: 10 Most Stressful Life Events
- Investopedia: Avoid These Mistakes When Selling Your Home
- Zillow.com: Mistakes to Avoid When Selling Your Home
- Onecle: California Civil Code Section 1102 et seq
- California Association of Realtors: Disclosure Charts
- California DRE: Disclosures in Real Property
- Nolo: Selling a California Home: What Are My Disclosure Obligations?
- Nolo: Legal Remedies If a California Home Seller Conceals a Defect
- Find Law: California Property and Real Estate Laws
- Legal Beagle: Most Common California Home Seller Questions
- Legal Beagle: Selling Your Home in California: A Guide to Selling Your Home
- Legal Beagle: Selling Your Home in California: Do You Need a Real Estate Agent or A Lawyer?
- Legal Beagle: How to Look Up Recent Home Sales
- Legal Beagle: How to Negotiate With the Land Seller
- Legal Beagle: How to Write a Contract to Sell a House
Teo Spengler earned a JD from U.C. Berkeley Law School. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an MA and an MFA in English/writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.