Editor's Note: This post was originally published on December 29, 2016. Housecall continues to share this piece due to ongoing requests and reader interest.
So you've decided to put your home on the market. Congratulations! Hopefully, you've brought a rockin' REALTOR® on board to help you list your spot, and together you've done your due diligence on what to ask for. As you start checking things off your to-do list, it's also important to pay mind of what not to do. Below are a handful of things to get you started.
Don't over-improve.
As you ready your home for sale, you may realize you will get a great return on your investment if you make a couple of changes. Updating the appliances or replacing that cracked cabinet in the bathroom are all great ideas. However, it's important not to over-improve, or make improvements that are hyper-specific to your tastes. For example, not everyone wants a pimped out finished basement equipped with a wet bar and lifted stage for their rock and roll buds to jam out on. (Okay, everyone should want that.) What if your buyers are family oriented and want a basement space for their kids to play in? That rock-and-roll room may look to them like a huge project to un-do. Make any needed fixes to your space, but don't go above and beyond—you may lose money doing so.
Don't over-decorate.
Over-decorating is just as bad as over-improving. You may love the look of lace and lavender, but your potential buyer may enter your home and cringe. When prepping for sale, neutralize your decorating scheme so it's more universally palatable.
Don't hang around.
Your agent calls to let you know they will be bringing buyers by this afternoon. Great! You rally your whole family, Fluffy the dog included, to be waiting at the door with fresh baked cookies and big smiles. Right? Wrong. Buyers want to imagine themselves in your space, not be confronted by you in your space. Trust, it's awkward for them to go about judging your home while you stand in the corner smiling like a maniac. Get out of the house, take the kids with you, and if you can't leave for whatever reason, at least go sit in the backyard. (On the other hand, if you're buying a home and not selling, then making it personal is the way to go, especially when writing your offer letter. Pull those heart strings!)
Don't take things personally.
Real estate is a business, but buying and selling homes is very, very emotional. However, when selling your homes, try your very best not to take things personally. When a buyer lowballs you or says they will need to replace your prized 1970s vintage shag carpet with something “more modern,” try not to raise your hackles.
the market here in Connecticut is terrible we are thinking of renting the house . The rent would more than pay the mortgage but not sure of the pitfalls
Hi Nancy, There are few questions I’d like to ask you in reference to deciding whether or not to rent your Connecticut house.
How far away will you be moving? If you are relocating out of state you will need someone local to address any items that may unexpectedly arise. You will also need a realtor you trust to work with as your tenants move out and a new tenant needs to be found.
How long do you envision keeping it as a rental property? Most houses look best when the owner lives there in comparison to when a tenant lives in the premises. If you plan on renting the property for just a couple of years with the hope the market will improve keep in mind the house will need sprucing up prior to being listed. This includes but is not limited to a fresh coat of paint inside and out in the current colors, landscaping, appliances.
What is the age of the roof, boiler, driveway asphalt, air conditioning system if you have one? These all have a design life, are costly to replace and are considered maintenance items not improvements.
Answer to: Nancy Krysiak regarding renting home VS Selling now.
If you can afford to rent it, do so. Have you already purchased a new place or are you getting a job transfer out of state?
These sort of factors might help you decide.
1.) By renting your primary residence you might be able to sell it later as an IRS 1031 Tax Deferred Exchange, because once you have collected rent for at least one year, you have converted it into “Income Property” and thus, it would qualify for a capital gains exclusion. You should (really must) consult a tax attorney should you want to consider this option. If you have owned the home a long time and have very large asset appreciation, this conversion really could save you some tax money, versus the sale of a personal residence which would incur capital gains above $500K if married or $250K if single. Living in CT, you may have a huge tax bill if you have lived there a long time and prices have risen. Later on, once it is a rental, you can start to claim the depreciation and maintenance as tax write-offs. You can also have “passive income” from the rental income. Should you decide that renting is not for you, you could still claim it as a primary residence IF you don’t wait longer that 5 years form the time you last occupied it. (The 2 out of the last 5 years rule.)
2.) Be certain to hire a good property manager (Especially if you won’t be in the area any longer or are planning to travel extensively). Get references and check them out, before committing, because a dishonest manager can be worse than none. If living far away, a visit to inspect the property yearly can be a write-off as well. (Again, check with your CPA or a Tax Attorney to dis use the benefits and pitfalls of owning rental property.)
3.) Before consulting your CPA, be sure to ask a good local REALTOR® for a market analysis for the estimated “Selling Value As of 2020” of your home AND what it could rent for. They also might tell you not to do any pspruce-ups
Answer to: Nancy Krysiak regarding renting home VS Selling now.
Continued….
3.) An agent they might tell you not to do any spruce-ups because often, upon move-out, there will be normal wear and tear from the tenants that you can’t deduct from their security deposit. You might on the other hand desire to freshen it with new paint and carpeting to remove any embedded odors such as from pets or smoking. If you will accept tenants with pets or smokers, which in California many landlords will not, be sure to ask for a hefty pet deposit because, in my experience prospective tenants always swear their pets are “good” but then the dogs may dig up your landscaping or scratch the paint off doors when “asking “to get in or out, etc. The dogs might be “Good dogs” however, the owners may not be diligent “poo picker-uppers” so your grass might become damaged from deposits that are left for weeks. On the other hand, if your place isn’t prissy, and you don’t want to paint or put in new flooring as you vacate, then you could advertise that you will take pets and charge extra. Especially if you live in an area where lots of people have dogs, dog-owning renters are often a gold mine because of landlords restricting their property as “NO PETS”.
4.) If you still have a mortgage, but the property will cash-flow (The rental payments will cover your Principal, Interest Taxes and Insurance plus a little extra for the eventual repairs that may come along or whatever fee the management company charges you), then it’s like having the tenant make your mortgage payment for you. Your equity generally will continue to grow, while they are effectively covering the payments.
5.) When the time comes to sell, and you decide to use the 1031 Exchange method, YOU MUST ELECT TO USE A QUALIFIED INTERMEDIARY so that you’ll be able to defer the Capital gains IF you reinvest the money into a like-kind property such as a multi-residential property or vacant land, etc. Anything that is an investment, that you don’t plan to use as a primary residence. https://www.ipx1031.com/faq-like-kind-property/
6.) Be certain to select a highly rated Qualified Intermediary, because they will be in charge of your funds from the relinquished property proceeds until you identify a new investment property to reinvest those fund into. You should research a good company with a long track record. You must also have a reliable qualified intermediary who will be able to keep you on track, so you do not lose out, due to the tax timelines. I would consider IPX 1031 Exchange Co. because they are a Fortune 500 company and a subsidiary of Fidelity National Financial Company. Your REALTOR® or CPA might also have suggestions https://www.ipx1031.com/regions/northeast-mid-atlantic/
Very true showing homes when seller not present increases your chances of a sale!Realtor Long Island NY since 1978 Good luck happy holidays!
Hi Nancy – where are you in CT? Where are you going? Not sure if you want to rent your house out if you are moving out of town. We sold all our investment properties in upstate NY to move back to my parents in Northern Westchester County, NY because I did not want to be an out of town landlord. We held onto one 2family and had a property manager but there were still issues that were difficult to address being 4hrs away. William Ravies Real Estate practically owns New England – let me refer you to a great agent like me as I don’t have my CT license anymore! Feel free to reach out to me with any other questions.
Very good information. Some of the points I had never thought about.
I disagree about not being there. I think both the owner and listing agent should be there to make sure the buyer sees everything and gets all their questions answered immediately. That is called sales. At a minimum the seller should be there. Listing agents shudder at this thought. They are in the business of listing homes not selling them. This idea that the buyer needs to experience it is a convenience for listing agents so they can be out looking for more listings and not at the property making a sales pitch. The listing agent should also be prepared to defend the asking price in that meeting.
Tom, I have been a real estate agent for many years and I have never had a buyer purchase a home they viewed when the seller was present. It makes a buyer very uncomfortable And they don’t feel they can look freely at the home. Secondly, they can’t picture themselves living there once they see the people who live there now. Buying a home is a very emotional time for most people and they want to envision it as theirs. I even ask my seller to remove any family photos and neutralize the home so the buyer can envision themselves living there. It does work.
As far as letting the buyers know about all the good qualities in the home, I ask my sellers to give me a list is all the improvements they have done and all items they feel are s
“Special to the home. I then put together a brochure (which lists all these items) to give to all the buyers.
You may be a salesman and think that is best, but buyers hate it when the seller is hovering. They will ask questions that the agent will relay and get answers for them. If you are hovering and SELLING, they may just leave right away – I have known it to happen.
Hi, The seller is not in the business of selling homes. The agent is. Agent’s are not only in the business of “listing” homes. If you think about it, they wouldn’t make a DIME if all they did was list them. They’re not paid hourly you know. As far as “making sure they ‘see’ everything”…. Trust me, when they walk into the house they know if they want to buy it or not. If they don’t want to buy the house, finding out the windows tilt out to clean or the garage has extra storage isn’t going to do it.
UGH! I detest showing a property to my buyer and having an anxious seller trailing behinds us, like a puppy dog yapping about things, or pointing out idiotic things like “Here’s the Kitchen” which is self-evident. A good Listing Agent will certainly have a decent property statement (Flyer) which has bullet points of the key features that need to be called out.
Should the owners require the Listing Agent to be present for all showings, the good ones will know to hang back and allow the buyers experience the home, as they first are trying to absorb everything, without distractions or intrusions.
If I bring my buyers to a home where the seller is present, usually the Listing agent has instructed them to hang back. At the end of the showing, as I am getting ready to depart I will ask my buyers “Do you have any Questions for the Owner or Listing Agent?” At that point you might get a seller who “spills the beans” and wrecks a potential sale, or divulges issues that might reduce the price a buyer is willing to offer. THAT is the main reason to not have a seller present when showing the home to buyers.
Tom,
Not sure if you are a realtor or not, I just think that your comment sounds harsh and unfair.
When a seller is home it sometimes creates alot of crowding, unnecessary conversation , and most times they say something that causes concern to the buyer. They will follow peopleinto the bathroom, leave a tv blasting, etc.
This combined with a listing agent who is standing there with piles of paper to hand your buyer makes it uncomfortable.
Not all seller’s are aware of letting the buyer have some space.
Also, if we are not accompanying on every showing, it is not just becasue we are out to get another listing, or another sale. (We are strictly commission based however). Buyer’s have relationshipss with their own agent;s and alwaays best ot let them be unless the house has some amazingly special feature that they need to be made aware of. This is my opinion, been doing this while now.
Great information. I do agree that the Homeowner should step aside during showings, etc. The listing agent is the marketing, the one to close the deal from start to finish. That is why the Seller is paying a commission correct? The Buyer needs to feel comfortable asking their agent questions about the home and the process without the Seller being present. If the Buyer has any further questions, they are represented by an agent that will contact the listing agent to get the answers they need.
Tom, respectfully, is uninformed or misinformed about brokering property. The only place for sellers to be when showing a home is ELSEWHERE!
Tom,
I represent buyers in most of my real estate transactions. A seller being present in an initial showing (in my opinion) is just too much of distraction for a buyer than it could possibly be constructive.I, too, have never had a buyer-client purchase a property in which the seller was present when they saw it the first time. Over a period of nearly 40 years in the business, I could describe embarrassing situations where the seller followed us around the house, making my clients feel very uncomfortable (sometimes, escalating the discomfort, resulting in an exchange of words, at times). Having a list of improvements on-hand is a much better idea. I can emphatically say that when the seller is present, my buyer inevitably walks away feeling they had no idea what they saw, and/or, (worse, for the buyer) that they have no interest in the property. At an initial viewing, I (and my clients) would MUCH prefer that the listing agent be present IN ANOTHER ROOM, leaving us to speak freely/privately about the property among ourselves, if it is an accompanied showing, or an open house. Other than at open houses and accompanied showings, if there are any immediate questions that require answers while we are there, I rely on questions answered over the phone.
Great article and very useful for anyone trying to sell their house. It’s easy to feel anxious and seem overinvolved when buyers come to check your property, but important to let them take a tour in peace.
Thanks for finally talking about >4 Things
NOT to Do When Putting Your Home on the Market
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RISMedia\’s Housecall <Loved it!
Grrr, I’ve a blog on my website and it sucks. I actually
removed it, but may need to bring it back again. You gave
me inspiration!
Keep on writing!
Couldn’t agree more. These are all great points!
Good tips, thanks. You’re right, over decorating your home with your taste isn’t ideal. Keeping it nice and clean, but simple goes a very long way. If I see a house that isnt clean then it makes me think of all the other things that could be wrong with the house.
Good article! I’ve been in real estate for 18 years. I work with both buyers and sellers.
I am not in the business to get listings. There’s no sense in getting listings if you aren’t in the business of selling them. It sounds like Tom had a bad experience with an agent. Which is to bad, but unfortunately it happens real estate just as it does in every field.
If the seller works with the listing agent, the agent should know everything about the house that the seller knows. Therefore, being able to relay the information professionally versus emotionally to either the buyer’s agent or buyer, if the buyer isn’t with an agent.
When the seller is present it normally always make the buyers feel uncomfortable. They talk way to much, about the good and the bad. They often come across as desperate. It doesn’t let buyers to look at the home freely and imagine themselves living there. They don’t know what the buyer is looking for so they could say something that is a total turnoff.
Everyone thinks it’s an easy job, but if so, why do only 3% of who go into to real estate, make it past 3 years in the business?
There is so much more that goes into selling real estate than buyers and sellers realize. That’s why we go to school for it, have to be licensed, and continue to take a required # of hours if education each year we are licensed, and more!
It’s more than making homes look pretty, it’s more than putting a sign in the yard. Believe it or not I’ve even cleaned a client’s toilet and packed away their clutter. We work 7 days a week and get calls and texts 24 hours a day. If you aren’t immediately available, your client forgets that you took them out to look at house 10 times at a minutes notice or dropped everything to meet you within a hour of calling because you think you’re ready to list. They’re on to the next agent.
40 years in real estate. Im 90/10 on sellers not being there, and as a newbie had a few sellers kill the potential purchase just because they didn’t like the sellers! Not that the sellers weren’t nice and friendly—sometimes ya just don’t like someone. Also, I had a few sellers give their personal negative thoughts about some of the neighbors, etc. On occasion the seller helped but the properties were large farm or ranch types that needed a lot of description and explanation. I try to pretend Im going to be buying the place, and come up with as many questions as I can, having listened to 100s of buyers.
I’ve been a Realtor in Southern California for over 15 years.
I think it’s ideal to decorate for the holidays. It really creates a Great ambiance. A very homey feel.
There has been some occasions when the sellers are present and have been very helpful in describing details about the property.
Specially the ones that have lived in their homes for many years and have pride of ownership.
My buyers have appreciated their input.
However it is highly recommended for sellers to leave so that the potential buyers don’t feel like they are invading and rushed.
I am a 25 year veteran Realtor. I agree; The seller should not be present during first showings. They usually talk to much and are a distraction. If the buyer’s agent is doing the best for the buyer, they will know enough about the property to guide the buyer. If listing agent wants to be present that’s fine too. Buyers like to view the home through their own eyes and speed while feeling free to make comments to each other or to their agent. The time for “defending the list price” – In Tom’s words- is when an offer is actually presented.
Good tips. I’d like to add another. Sellers do not turn off the utilities. It will how the property shows and it may cause delays on the inspections, appraisal and closing.
My mother said many years ago “If you’re ever clean, you must be clean when you sell your house!” Very clean. Get rid of excess. All excess!
Park it with a friend or relative if you can’t part with it. All friend and relative pictures and religious things removed Paint what MUST be painted and spackle as necessary
Really hard to sell a dirty cluttered house!
These are all great tips. Too often do sellers stay close before I arrive with my clients. It is not comfortable for the buyers.
If buyers have questions they will ask their Realtor and get you those answers.
But make sure your house shows well and if possible turn on lights that the realtors can turn off. That can be written into showing instructions.
I ask my sellers to make the home look fresh and inviting and not to overimproved. It works. Some of our listings sold the first day with multiple offers. Before evening the homes were sold.
This is a real good read. Thanks for sharing such a good post. Be it selling or buying a house one must be really careful as it could well be the most crucial of deals. It is always advisable to have the services of an expert.
One of my biggest pet peeves being from hot and humid Tampa, Fl is air conditioning. So many sellers turn their A/C to 80 degrees or off completely to save money. It makes for uncomfortable showings and raises questions as to the condition of the A/C in the first place!
I couldn’t agree more with not taking it personal. I struggled with not being offended when selling my house during the last recession. What helped with taking a holiday while not being overly involved while house viewing was going on.
To add on don’t over improve, make sure all of the kitchen and washroom appliances are working optimally at the very least to show that the house was being cared for. You don’t want avoidable problems like a leaky sink faucet to take away from the other aspects of the house that should get more attention.
What do you do when you put your house on the market?
Thanks a bunch for sharing this with all folks you really understand what you’re speaking about!
Totally agree with this post. It’s important to keep things simple and clean. I personally would rather look at a clean home that has been intact for years and producing value than a home that has been worked on so much that it holds no original value. Thank you for sharing.