Have you ever made a mistake that cost you the sale of a house? I’ve made every one of the following mistakes during my many years of investing in single family homes. Some have cost me a few hundred dollars, while others have completely cost me the sale. All of these mistakes have cost me time. The secret is to recognize the mistake and strive not to repeat it. Are you making any of these right now?
1. Curb Appeal is Not as Good Others in the Area
Stand on the edge of the street and look at the house on either side of yours, then look at the house across the street. You’re looking for landscaping and general appeal as someone would see it from their car. Most people want to drive by a property first. Will the outside make them want to look at the inside? Yours should be as good or better than those around you if you want a fast sale at top market price.
2. Showing the House Before You Paint, Carpet, etc.
Do it before you waste your time and money advertising and showing. People are not used to visualizing finsihed upgrades like experienced investors and realtors are.
3. Over-Selling
When a prospective buyer indicates they want the house, write it up! Don’t keep selling. More than once I have had someone say they wanted the house, but I kept trying to reinforce the sale. Somewhere in the process, the buyer decides to “think about it awhile and get back to me.” These are hard words when you know that you already had the house sold. When you have a sale, stop selling.
4. Trying to Impart Your Vast Knowledge to the Buyer
I have to fight this urge every time I talk to a buyer. I enjoy talking, helping and educating people, but during a sale is not the time. You will only confuse the buyer when you try to pass on your knowledge and experience in 15 minutes. People will not make a decision to buy when they are confused.
5. Not Fixing Obvious Defects Before the Inspector Comes
If they see something wrong, they will often want to look closer. Once they have written up a problem, you may have to hire someone certified to do the work. Do it with a general handyman before they come out. I’ve paid big bucks for that mistake. Most times someone must re-inspect too, which will cost you more time. Maybe even enough time for the buyers to change their minds. At any rate, the inspector is just like you and me. If the house looks clean, neat and well cared for, he will give it a passing grade.
6. Not Following Up After Signing the Sales Agreement
More sales have been lost and made due to this than all the others combined. Lost and made? What am I talking about? Buying a home is the biggest financial decision most people will make in their lifetime. After someone has made the decision to buy, it is only human nature to question that decision later. When the going gets tough in the qualifying phase, people will question their buying decision more frequently.
Every time they do, you stand to lose the sale. You can fight this by contacting them every other day with some bit of information. Example: you talked to the mortgage company, the appraisal was done today, etc. Call or write with any information you have or can get just to stay in touch. Most buyers will view this as great service, which it is, and will refer others to you. What are you really trying to do? Keep them from backing out of the deal, of course.
7. Allowing the Buyer to Move into the House Prior to Closing
At best it will cost you in cosmetic issues they find wrong with the house. At worst, they may decide this is not the house for them after all. What happens if they decide they need new carpet (around $10,000) during their stay, but before closing. You can put it in the contract that such things are their problem, but who is in the driver’s seat at this point? Besides, they used all their money on the down payment, right?
8. Not Getting a Large Enough Deposit
People hate to lose money. A large binder deposit will normally commit someone. Get what you can when you write up the agreement, and ask for more soon. At least if they back out, you will have something to show for the time you kept it off the market.
9. Not Asking for the Sale
Most people need a little nudge to make a decision or commitment. You must provide that nudge or you will lose many sales you could have otherwise made. Ask for the sale as soon as possible.
10. Not Having Enough Information
This one will cost you many sales. Buyers want to know the details on the house: square feet, year built, lot size, schools, utilities, etc. They want to know how much will be required as a down payment and what the payments will be, how long it will take to qualify and get in the house, etc. Anticipate as many questions as you can and have answers ready.
Having this information handy will give you confidence when talking with buyers. Remember, the only people who never make mistakes are the ones who never actually do anything. So get out there and do something. Learn from your mistakes and don’t repeat them.
by Ron LeGrand
