Buying and selling real estate is for most people the most important financial transaction of their lives. Not only do these sales involve a lot of money, they are often emotional and occur around huge life changes: a new job in a new town, a retirement, a divorce, a marriage, a death, changes in health or just an exciting change of scenery. Sometimes people compare real estate agents to car salesmen, but they aren’t even close. Good agents know that they deal with some of the most important and most intimate moments in peoples’ lives. So why are some people so cavalier about these transactions?
Here are my personal TOP 5 Scary Mistakes to Avoid When Buying or Selling a home:
- Selling a Home By Owner Ok, I admit it, I have bought and sold a home or two by owner in the past. But I now look back on those transactions and cringe. There is a reason why For Sale by Owner (FSBO) homes are at their lowest levels since the National Association of Realtors started tracking it in 1981. There is a lot more to selling a home these days and, according to the NAR report, “sellers are working with agents to help market their homes to potential buyers, sell it in a specific time frame and price the home competitively.” In fact, sellers admitted that getting a good price was their toughest obstacle to overcome. Of course it was! Buyers come to FSBO’s because they are looking for not just a deal, but a steal. Inman News reports, “According to NAR, the median FSBO sales price rose slightly from $185,000 to $190,000 last year, compared to the median price of a home sold using an agent, which stands at $250,000.” Selling by owner is also not worth it when it comes to liability. As a seller do you know what you are required to disclose? Do you know what you are required to repair? Do you know who pays what costs and who is responsible for investigating problems? What about the burdens of permits or HOA rules? As agents, we learn from every transaction and we might have closed hundreds in our careers. Why would you both lose money and not be represented in such an important transaction?
2. Using an Inexperienced, Part-Time or Unprofessional Agent. I am going to do a whole post soon on how to know you’ve got a bad agent. We all have friends, and dear Aunties, and cousins, and we want to stay loyal, but unless your bestie is also a dynamite Realtor (like me) don’t use them for such an important transaction. One of our sayings at Realty Executives is, “Things go great, until they don’t.” Honestly, it takes a lot of people to make sure that a property is marketed right, priced right, negotiated right and that all the contractual terms and obligations are met to protect all parties involved. Even when we think we’ve seen it all, we get surprised. Always use a top professional!
3. Looking for property by yourself and going agent to agent off of signs. Folks, why in the world, when licensed buyer representation is in almost all cases FREE would you not use it? Hello??? Calling numbers off of signs and never making the decision to work with one agent who knows you is just DUMB. Find an agent, stick with them, let them become an expert in YOU and what you want. Enough said.
4. Choosing a poor lender. I have seen so many good deals go bad because of bad lenders and loan officers. Find a lender who is experienced and has a good track record. Find one who understands underwriting and different types of loans. Find one who communicates well and often, who can explain the process to you in plain terms. Find one who gives you options. Don’t know where to start? Ask your Realtor! We work with lenders day in and day out. We know who performs and who fails, who is fast and who is slow, who communicates and who doesn’t. Ask us!
5. Failing to do your due diligence. Buyers and sellers have an obligation to read what they are given, to ask questions, to inspect what they are signing and what they are buying. Agents are human. We have a professional obligation and duty to know the law and to look out for and guide our clients. But we sometimes make mistakes or miss details. As the buyer or seller, you too have a duty to be alert and to raise a red flag when you have questions or concerns.
Buying and selling property doesn’t have to be scary. Get in touch with professionals and they will guide you through the maze!