Mistake #1 — Pricing Your Property Too High
Sometimes people want to price their home higher than the others for sale in the neighborhood, thinking that any offer that will be made will be much lower than the asking price anyway. In Hawaii this actually isn’t true at all. Many homes sell at or above their asking price, even in a down market.
When your home is priced to high, you’re going to get less showings, as real estate agents look for better deals. Some of the people that didn’t see your home at all might have liked it enough to make an offer, but since they never saw it, you lose that opportunity.
In Hawaii it’s very common for a home to go right at the asking price. so you don’t want to price your home more than you want it to sell for, because your home will sit. As time passes, and your home has been on the market for a long time, you are more likely to get an offer that is below the asking price.
After people find out the price of a house, the second thing they want to know is, “how long as it been on the market?” So if your home is overpriced, it will sit longer, and people will be less and less interested in it..
Mistake #2 — Choosing a self service broker
Some people think that discount brokers can save you money because the commission is lower, but Hawaii’s leading discount broker sold only 52% of their listings in 2006. That means you have only a 50/50 chance of selling your home through them. Can you afford a 50/50 chance at selling your home? If you don’t sell your home at all, have you saved any money? Not at all, because they usually want their money up front, but we only get paid if you actually sell your home. As markets get tougher, the discount brokers sell less and less of their listings, because it takes more work to sell them, and they don’t want to do the work!
Mistake #3 — Not staging your home
You think your home feels comfortable, livable, and you don’t want to change, but guess what? The buyers who come through your home think it looks cluttered, messy, and uninviting. That’s because buyers are used to seeing a home in “model perfect” condition, and they want to be able to picture themselves living in your home.
You should make your home feel like a model or like a furniture, minimizing the personal things in view. That means a minimum number of pictures of your family, no personal items like fishing or diving gear, no papers and files sitting around. You want the house to look like they could bring all their stuff and move right in. When people see your stuff, your collections of things, your giant bag of pet food, etc, they focus on that and forget the house.
Mistake #4 Buying a new home before selling your home
Unless the market is red hot and your home will sell in just a few days, you don’t want to buy a new home before you sell yours. You may end up with 2 mortgages, 2 houses, 2 property tax payments. In a market where homes take more than 30days to sell, you should put your home on the market first and get it in escrow before buying a new one.
Everybody thinks their home is special and that somehow it will do better than everyone else’s home. That is hardly every true. Usually every home I see is pretty much a copy of something similar, and that means it’s not going to sell very quickly.
Mistake #5 Looking at listings and not sales
When you go to price a home, what matters more, the listings or the sales? Well most people look at what is for sale, not taking into account that those homes may never sell at all.
So when it’s time to decide on the price of your Hawaii home, look at what is in escrow and what has already sold. These homes will give you a better understanding of buyer’s minds than the active listings, which are just sitting there. Especially in a slowing or down market, you want to be very aware of the homes that are actually selling.
Mistake #6 Not doing the Math
How much will you have left after your home sells? Usually about 93% of the sales price after the closing costs. That means that if you want to sell your Honolulu home and buy another house in Kaneohe, you need to figure out the amount you will have left, plus the closing costs on the new purchase. You’re likely to have 1-2% of the purchase price of your new home for closing costs, so it’s not like you can just sell a house for $800k and buy another one for $800k and break even. This type of buy/sell will almost always be a loss.