THE MOST COMMON MISTAKES WHEN SELLING A PROPERTY
Whether you are selling the property yourself or you have decided to approach a real estate agency, you always need to prepare for the selling process well in advance. While it may seem to many that it is something trivial like shopping at the mall, the truth is that it is overwhelmingly one of life’s biggest and most important transactions. So what are the things to look out for and remember?
The wrong price
An incorrectly set sale price for a property is the most common mistake made when selling. The most common situation is that sellers look at similar properties currently advertised and set the price just and accordingly. This is because they mistakenly think that the property will sell for the price offered. In reality, the difference between the offer price and the real market price is often huge (we are talking tens of percent). On the contrary, the truth is that a significant part of the offer price is more the wishful thinking of the owners. When setting the price, it is also necessary to take into account the real transactions that have taken place in a given location over time, but it doesn’t stop there either. It is also necessary to take into account the amenities, orientation to the world, accessibility to the centre, etc.
(for more information see the article How to price a property correctly)
Neglected preparation of the property for sale
Real estate is a commodity like any other. Therefore, this commodity also deserves a good deal of preparation before the sale as such even takes place. It’s actually very simple – if the commodity is prepared nicely and shown in the best possible light, then it will sell that much faster. Yet a great many self-sellers grossly underestimate the pre-sale preparation. Most of the time, they stick to taking poor quality photos with their phone instead of using a professional photographer or videographer to make a promotional video. Minor adjustments and redecoration can often raise the price in the eyes of sellers by tens of thousands of crowns, because the property, simply put, gets seen through and can be much better and easier to present. On the other hand, it is true that too much investment in renovation may not pay off at all. You should also discuss this matter with your estate agent. An experienced real estate agent will give you good advice on what is worth investing in and what is not.
The so called home staging certainly deserves attention. In addition to professional photographs and possibly video, 3D visualization, which allows buyers to view the individual rooms of the property from the comfort of their home, will certainly help sell the property. Although it may sound unbelievable, the fact remains that even a simple 3D scan can make a successful sale, even if the buyers are unable to attend the viewing in person.
Many people think that it’s actually very simple – take a picture of the property, write an advert, put it online and wait nicely for the right buyer to come along. But it’s not that easy. Promotion requires a lot more and if it is done wrong, the result will be a low number of approached buyers, which often leads to a sale at a lower price.
Another pitfall can be the misconception by sellers that all buyers will look at the one or two advertising portals where the selling party is currently advertising. It is not uncommon for buyers not to even notice the advert and therefore relying on something like this can result in unnecessary losses of up to several hundred thousand crowns. On the contrary, it is advisable to think about targeted promotion not only on advertising portals, but also in the digital world on social networks, thanks to which it is possible to target specific users with the help of paid advertising. This will bring the property for sale to the attention of a significantly larger number of potential buyers.
Cooperation on the basis of a non-exclusive contract with several real estate agencies
There is still a perception among many sellers that the more agents they involve in the sale of their property, the faster and better the sale. In the eyes of sellers, this is a perfectly logical fact. After all, each broker will engage their own sales channels, brokers will certainly put in as much effort and effort as possible into the sale, etc. But the truth is unfortunately quite the opposite. If a broker finds out that a property is going to be sold non-exclusively, he will immediately put two and two together and know that it does not make much sense for him to put excessive effort and invest more money into the property just for the sake of promotion. The reason is simple. If, for example, five real estate agents are to try to sell, it means that one agent has a 20% chance of a successful sale, or that he will get a return on his entire investment. An experienced and good broker will thus refuse such cooperation and the seller can forget about professional presentation. Instead of a promotional video, 3D visualization, paid advertising, brokers’ clients are more likely to see photos taken with a mobile phone.
Non-exclusive cooperation not only demotivates the real estate agent but also harms the selling party. Why? Imagine a situation where you want to buy a property in a given location. You go and look at the advertising portals and filter the current offer according to the desired parameters, condition, etc. And then you may very likely come across one property advertised by several real estate agents. And even more likely you will find that this one property is advertised at different prices. If you wanted to buy a property, logically you would call where the price is lower, because why would you pay unnecessarily extra when there is an opportunity to buy the same thing cheaper? The selling party could very easily lose out on potential profit. And the reason for this is that the broker, knowing that he has a 20% chance of success, will slightly lower the price in the advert in order to attract the attention of the buyers.
Choosing a broker according to the amount of his commission
“How much is your commission?” is one of the basic questions in the sellers’ repertoire when it comes to breaking bread. It’s also an inevitable question. After all, it is necessary to agree on the remuneration for the work brokered. But a (future) problem may arise when the amount of commission is the only criterion for choosing a real estate agent. This often varies. Some people work for 3% + VAT, others for 5% + VAT. And 2% can often represent quite a large amount of money. However, it should be taken into account that the volume of services provided by individual brokers also varies greatly. Along with this, the final selling price that the estate agent achieves through investment in promotion and sales skills varies.
People generally wrongly assume that all brokers work in the same way and that they differ in the price they charge for their services. And this very idea can often cost you hundreds of thousands. Therefore, always ask the real estate agent about the amount of services that are included in his or her brokerage fee. In particular, ask about the sales activities the broker will do to find the most ideal buyer for you. These activities have a big impact on the sale price achieved. In summary, have the brokers present a sales plan and compare them with each other.
Ignorance of legal obligations
You risk a fine of up to 100.000 CZK if you are selling the property as a natural person. If you are selling as a legal entity, you risk a penalty of up to 200.000 CZK for not providing the Energy Performance Certificate (ECP).
You are also obliged to provide the buyer with the building documentation for the house. The seller is then liable for so-called hidden defects for 5 years from the sale… Overall, it can be clearly stated that ignorance of your obligations can make the sale of the property more expensive, or on the contrary, you may be forced by the buyer to provide a discount for defective performance.
For more information on this topic, please see the article Seller’s Obligations on the Sale of Property.
Weak business experience
Selling a property is primarily a business where a lot of money is at stake. Often a lifetime of savings. And as with any other deal, the selling party wants to make as much money as possible, while the buyer tries to negotiate the biggest discount. If the buyer is an experienced salesperson or has commissioned an experienced real estate agent to buy, they have an informational and psychological advantage over you, namely that they can use any mistake to their advantage without you realizing it.
Namely, it may be a situation where you need to sell quickly. This is usually through financial hardship, or because you have inherited a property far from your home and do not have the capacity to look after it. Basically, it becomes more of a burden for you to maintain so that it doesn’t deteriorate, but that also cuts into your budget, which is not always unlimited. However, if you mention to a business-savvy buyer or broker that you are in a hurry to sell, they will immediately sense an opportunity and start negotiating a discount with you. This is because if the seller is under pressure (financial/time or emotional), or, for example, is not in a hurry to sell the property or does not have the energy to do so, such a person is more inclined to negotiate a discount than a seller who is not in a hurry to sell and is not bothered or even enjoying the sale.
In addition, often a business-savvy buyer can even read between the lines. Body language will give you a clue as to the situation you are in, or, of course, they will also find out a lot through the questions they ask you indirectly. Gesticulation, eye contact or voice intonation will often give away the inexperienced seller, so the buyer is not afraid to ask for a discount and often gets it.
So don’t waste your time making wrong and unnecessarily costly decisions.
Where to next?
Do you want to know the value of your property? Feel free to contact me anytime.