When most people decide to sell their homes, they opt to work with a real estate agent to streamline the process and protect their best interests. However, some choose a different route—by selling their home privately, they avoid paying commissions to real estate agents on both sides. This may be beneficial to some, but it can also put you at risk for some expensive missteps. Learn more about common mistakes associated with private transactions so you can avoid them in your home sale.
Sale Price Mistakes
The sale price is where most people go wrong, and unfortunately, it’s one of the first decisions you make. People err in both directions. They may set the sale price too low if they are basing their numbers on old market conditions or are putting too much emphasis on a fast sale. This may lead to a quick sale but it also means leaving money on the table.
It is far more common to overprice a property and then watch it languish on the market. People may use their emotions and the memories they have of their home while pricing it, forgetting that potential buyers don’t have the same emotional attachments. A home that sits on the market for too long will be seen as a dud by potential buyers, which often means a lower selling price than if the seller had just priced it appropriately, to begin with.
Failing to Market Appropriately
Real estate agents don’t just handle offers and paperwork. They also know what it takes to market a property appropriately—that means hosting the right events, advertising in the right places, and knowing the target market for a property. An inexperienced seller may stick to one advertising method or refuse to use anything other than free options, which can limit their reach.
This includes staging. A well-staged and beautifully photographed home will make a better impression on potential buyers, leading to more walkthroughs and making it easier to get the home in front of the right people. Rushed photos can lead to a home getting passed over.
Delays in Paperwork or Incorrect Paperwork
There truly seems to be no end to the amount of paperwork generated in a home purchase. Every single one of these documents has a specific purpose and deadline, and each one has to be filed with the right parties. Private sellers may procrastinate on this paperwork, as they often underestimate just how long it takes to process all of this documentation. They may also miss important documents, use outdated versions of forms, or fail to include the necessary information.
Another common mistake is failing to get the proper legal advice. This documentation is legally binding—it is crucial to ensure that you are using the right forms and language. Without legal assistance, sellers risk ending up with contracts that are unclear or unenforceable. This can become a huge issue if the transaction goes south, as the faulty contract could leave the seller on the hook for substantial sums of money. Sorting the issue out in court is likely to cost more than the seller saved by not using an agent.
Getting Caught Up in Scams
Private sellers are often targeted by scammers. Scammers know that private sellers aren’t as familiar with the warning signs of a scam as someone who is experienced with real estate sales, so they’re often an easy mark. Wire fraud is a common issue—scammers may pretend to be title companies, inspectors, or real estate agents to convince sellers to send money via wire transfer. By the time the seller realizes that they have been scammed, the money is long gone.
On the buyer’s side, scammers often create fake home listings that are too good to be true. These listings lure people in, allow them to get their hopes up about the perfect home, and put them in the perfect position to be financially drained by the scammer.
Scammers may pose as potential buyers. By stringing the seller along, they may get the seller to send “inspection fees” or other fraudulent transfers to their “agent,” who is actually just the fraudulent buyer or their associate. By avoiding these mistakes, private sellers can give themselves a fair shot at successfully selling their property.