Tri-Valley homeowners, are you thinking about selling your home? Then you must know the three crucial mistakes not to make so you don’t leave any money on the table.
Hi, I’m Warren Oberholser. I’m a realtor in the East Bay Tri-Valley area in Northern California. My goal is to help both buyers and sellers get maximum results for one of their biggest investments, their home.
If you’re a homeowner in the Tri-Valley area, I want you to know that real estate isn’t for everybody. It’s definitely not for the faint of heart. So to ensure that you walk away from the deal with the maximum amount of money possibly requires following a time-tested process.
Unfortunately, not all real estate agents counsel their clients on the do’s and don’ts of selling a home, so mistakes do happen frequently.
So let’s look at the three most crucial mistakes homeowners make and how to avoid making them.
Number one: Overpricing the home.
A home sale isn’t like a yard sale where people haggle over the price. Sure, there may be price negotiations but don’t count on this when you’re figuring out what price to list your home at. Pricing high to give the buyer wiggle room isn’t wise.
When a property is ready to go on the market, the realtor will put the home on the Multiple Listing Service website (MLS). They will include all the details on the home, including the price. Local realtors will send this information to their buyers that they feel may be interested in this property.
The information is also posted on numerous third-party websites like Zillow, Realtor.com, etc. One of the main buyer search criteria is the price.
When a home is overpriced, it shows up in searches for larger, newer, and nicer homes, homes that the overpriced home can’t compare to. Overpriced homes tend to just sit on the market with very few buyers actually viewing them in person.
So when a home sits too long, buyer agents and their clients get the impression the homeowner isn’t a serious seller, and in the end, the overpriced home may become stigmatized.
A home’s value is determined by what the buyer is willing to pay for it, not what the homeowner wants to get for it. To determine what buyers are willing to pay requires an analysis of homes similar to yours that have recently sold. It doesn’t matter what the neighbor across the street is asking for their home, it only matters what the home finally sells for. In the real estate world, this is referred to as the comps or comparables.
The biggest mistake a home seller can make is to lose that most valuable market period, which is the beginning of the first one to two weeks when their home first hits the market. Even in this aggressive seller’s market as we are experiencing in the Tri-Valley area which is producing multiple offers, some homes are going 10% over the asking price, you can still find a home that is overpriced.
- For example, if you feel your home has the potential value of $800,000, you may want to list it $30,000 less so you can attract more buyers,
- as opposed to listing it for $810,000 thinking this will give you some room to negotiate. It is always easier to run the price up by having multiple buyers than to sit around waiting for just one interested buyer.
The other reason for a strong price strategy is it usually will produce buyers with better terms in their purchase agreement. The two big elements in a buyer’s purchase contract are price and terms. We all know what price means, so what are the terms? Terms mean how will the buyer pay for the property? Will it be financed or cash? And what are your buyer contingencies?
Buyer contingencies are the timeframe for investigation, appraisal, and loan. So what is the bottom line? In this aggressive Tri-Valley seller’s market, Multiple offers will usually equate to higher prices and better terms.
To have a thorough understanding of how this affects both parties, buyer, and seller, please watch Tri-Valley buyer- Why is your offer getting rejected. One last point in this subject, the video I just recommended, you’ll note that I actually recommend to buyers to go after overpriced properties, because cause you have no competition so it’s easier to negotiate.
Number two: Not preparing the home. You know that expression “you only have one chance to make a good impression”. Well, it’s not just for a job interview, it’s also for your home. You want your home to make the best impression on all potential buyers.
Now you’re probably going to say why fix up my house if we’re having such an aggressive seller’s market in the Tri-Valley area? Isn’t this a waste of time and money? And the answer is you’re right. You see, preparing your house doesn’t mean fixing all the repairs or remodeling the kitchen or the bath bathroom.
You want to prepare your house so it’s ready to sell. By not preparing your house is a sure way to leave money on the table. A house that’s properly prepared can close or be sold in three to five days. Now don’t worry, this doesn’t mean you have to leave the house in three to five days, it just means that there is nothing to prevent it from closing.
Based on my experience of handling numerous transactions for both buyers and sellers, in order to have your home properly prepared to sell, you should have the following two items handled prior to going on the market:.
- #1- have all seller disclosures completed
- #2- have a clear title on the property
To my knowledge, these are the two bare minimum sellers need to complete prior to closing. Per the California contract, the seller is obligated to complete all seller disclosures, which include the SPQ and the TDS, so the buyer can review and sign off prior to closing. So if you have to do this, why wait?
And yes, I have seen a delay in closing because the seller was traveling and they didn’t get these documents completed.
Regarding a clear title, this is something the title company has to perform. If a title company finds on the prelim there’s an issue on the property, such as a lien, or there may be a name from a previous owner, it may take a few weeks to a month or so to have these items cleared up. So technically you cannot close or transfer your property over to the buyer until these items have been handled.
Now another item to handle prior to going on the market is property inspections. The three main ones are roof termite and home or general inspection. Please note, per the California residential purchase agreement contract, it is customary for the buyer to pay for any and all inspections they deem necessary. So why would a seller elect to have inspections performed prior to going on the market, especially in such an aggressive seller’s market as we’re having in the Tri-Valley area?
Well, there a couple of reasons. #1, repairs. If a seller is planning to do any minor repairs on the property, let’s say paint, new carpet, if it’s determined in the termite inspection there is Section 1 issues, a seller may want to handle these items found on the termite report prior to completing the finishing touches.
#2, if major problems are discovered, let’s say foundation issues or home needs a new roof, if the homeowner doesn’t have the money to handle these items, it might be a better strategy to not do any repairs at all, price the property accordingly, so the buyer can handle it
As the expression goes, “you can run, but you can’t hide”. If a home has an issue, it’s been my experience it usually gets discovered, whether it’s from inspections the seller did prior to going on the market or from the buyer’s inspections when they were in contract. So the discussion is what is the better strategy to handle this? One last point, the Seller is obligated to note any issues they are aware of in the seller disclosures (SPQ, TDA, etc).
Okay, enough of inspections, let’s address curb appeal. As the phrase states, the home should look good from the time the buyer gets out of their car.
If the homeowner doesn’t have funds for any improvements, then if possible, if they can make sure the property appears as clean as possible inside and out, regarding exterior, all plants, trees, bushes, grass should be trimmed and cut, and all trash and unwanted items should be removed. Inside the house, declutter as much as possible and clean up all rooms, including the entrance area, bedrooms, kitchen, etc.
By the way, I purchased several properties for my investors that were just like the ones you’d see in those hoarder shows. So if the homeowner is unable to handle this, it’s up to the agent and the homeowner to price it accordingly, and I guarantee buyers will show up.
The last two items on curb appeal are repairs and staging. If the seller does have resources to handle this and has spent correctly as far as repairs, bathrooms, and kitchens, this should yield a good return. If the seller chooses to move out prior to going on the market, a staged home will sell for 17% more on average than a non-staged home, and 95% of staged homes sell in 11 days or less. That is statistically 87% faster than non-staged homes…Forbes
Number three: Putting restrictions on showings. This one’s pretty straightforward. Being flexible to accommodate multiple buyers will increase your chances of finding the right buyer. If you require a 24-hour notice or only allow the home to be shown during certain hours, you’re restricting the pool of buyers that may be interested in purchasing your home.
When I’m the listing agent, I’m quite aware of my seller’s stress level and the challenges of having their house exposed to the public. So providing the seller can handle this, I’ll have them leave the house from 10:00 AM and come back at 5:00 for both Saturday and Sunday, and I’ll usually conduct open houses between 1:00 and 4:00 both Saturday and Sunday. I then usually have an offer due date the following Tuesday. Now, this can be very effective in allowing maximum buyer exposure without burning out the seller and their family.
Well, this wraps up the three steps to properly prepare your home so it can sell for maximum dollars in the Tri-Valley area.
I hope you enjoyed this article. Please let me know if you have any questions. Warren
Hello…I work with both buyers and sellers in the Tri-Valley area of Northern California. The Tri-Valley is comprised of 6 cities: Pleasanton, Livermore, Dublin, San Ramon, Danville, and Alamo. To better understand what each city has to offer, I have created a Pros and Cons video and BLOG for each – (Pros & Cons for Pleasanton, Pros & Cons for Livermore, Pros & Cons for Dublin, Pros & Cons for San Ramon, Pros & Cons for Danville and Pros & Cons for Alamo). If you are thinking about purchasing or selling a home, please reach out to me by text, phone, or email. If it is convenient, I can schedule a Zoom chat so we can discuss your home goals. Wishing you all the best on your home journey. Cheers!
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