By Daniel Akerman, Listing Specialist with the Queens & Manhattan Home Team at Keller Williams Realty. Need Help? Contact Dan at (646) 844-5770
Selling a home anywhere is a stressful process under the best of circumstances. A quick search on Google for “most stressful life events” will return page after page after page of results from health organizations and publications that list moving or changing homes in the top 5 most stressful life events a person can go through. Therefore, making it as easy as possible and avoiding any pitfalls or problems becomes essential to avoid making an already stressful event even more stressful. We’ve compiled a list of some of the biggest pitfalls in selling a NYC property so that you as a homeowner can better prepare and avoid these common mistakes. It may not remove all the stress of selling and moving in NYC, but it will certainly keep things as smooth as possible!
Pricing Too High
This is the #1 pitfall in selling your home, and the biggest mistake homeowners selling a home in NYC make – especially in Manhattan. Pricing too high will result in your home sitting on the market longer than necessary, resulting in greater costs to you, as well as fewer offers and less negotiating power. That triple-whammy ultimately means less money in your pocket and lots more stress!
Remember that it doesn’t matter what you think your property is worth if buyers don’t agree. Your property is only worth what a buyer is willing to pay for it. Not a penny less or a penny more. Just as with any product being sold, if buyers don’t see the value, they aren’t going to buy, and rather than make an offer on it, they will likely just pass it on by for something else.
It can be useful to think of your home sale as an auction, and the list price as the opening bid. If an item at auction is priced too high for the bidders to see value, we all know what happens: it gets no bids and the auction house is forced to lower the price until they get someone to bite. And even then the auction may be slow and get few bids. But if an auction house lists an item with an attractive opening bid, the bids will start flowing in and run the price up to whatever the market will bear. The latter is always preferable in a home sale. Not only does it allow the seller to get the highest price, but it also gives the seller the power to negotiate the most favorable or desirable terms.
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A good agent will walk you through the proper pricing of your property, but remember that you want to base your list price primarily on similar properties that have actually sold, rather than ones that are actively listed. Similar properties that actually sold tell you what buyers were willing to pay. Active listings only tell you what sellers are hoping to get. Also remember that, in most sales, a loan will be involved, which means there will be an appraisal. And the appraisal is based entirely on closed sales.
Assuming your home is being properly and fully marketed, if it’s priced right it should get inquiries and activity right away, and should stay on the market no longer than 30-60 days or so. If it stays on the market longer than that or isn’t getting a lot of activity, it’s a sure sign it’s priced too high. Most of our team’s listings get activity right away and are under contract in under 60 days, netting our sellers more money in the process.
Not Having Professional, Well-Lit Photographs
According to “The Conversion Code” by Chris Smith, in today’s online world we have less than 8 seconds to capture the attention of a consumer. When you think of the habits of consumers today who are constantly scrolling through various feeds on Instagram, Facebook, as well as real estate websites, the truth is we probably have significantly less than that! So, when selling your NYC apartment or home, visuals are everything. Potential home-buyers aren’t reading every listing. They’re only clicking and reading about the homes for sale that catch their attention. And you’re only going to get their attention if your home is featured in professional, well-lit photographs.
Think, also, about the buyer agents who will be helping homebuyers. The listings they present to their client will be a reflection of their professionalism and attentiveness – even though they aren’t the ones who listed the property and had it photographed. No buyer’s agent wants to present their buyer with a listing featuring awful, dark photographs and risk having their client think “why is my agent even showing me this?”
Make sure your listing agent hires a professional photographer to photograph your property and make sure to review the photos before the listing goes live. If you see something you don’t like, speak up about it and make sure your home or apartment is presented in the best light possible (pun intended). All of our team’s listings feature professional photography and we always share the photos with our clients upon request and allow them a say in which photos to use. And we will even have a property re-photographed in the event a client isn’t happy with the first batch.
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Getting A Buyer Turned Down By The Co-op Board
You put up your NYC co-op apartment for sale. After some time on the market, it gets some offers, you negotiate the best one, and get it under contract 8 weeks after listing. The buyer completes their application package and sends it directly to the management company another 30 days later. A week or two later, the board reviews it, and you get the bad news that the board has REJECTED the buyer. Now, after roughly 3 months, you have to start all over again. Not only have you lost all that time and effort, but buyers now see your apartment is back on the market and that it was originally listed 3 months ago. The first question all of them will be asking is, “what’s wrong with this apartment?”
Having a buyer rejected by the board is one of the biggest gut-punches a seller of a NYC co-op can experience. Worse still, the board can reject a buyer for any reason and doesn’t have to disclose anything to anybody as far as why they did.
While a seller has limited control over what a co-op board decides, they CAN take steps to minimize the chances of this ever happening to them. First of all, long before selling, it helps to be friendly with the board and its members. Secondly, when it comes time to sell, it’s absolutely ESSENTIAL that you as the seller, as well as your agent, thoroughly understand the purchase requirement and application process in your co-op. One of the primary reasons buyers get rejected is because they fail to meet the requirements to purchase in the building, or because of a poorly prepared application and board package – something that could easily be caught by a thorough, prepared agent. All the offers you receive should be written offers, accompanied by a pre-approval. Once you have an offer you like, your agent should also be receiving all of the main financial documents the board will be asking for: taxes, W2s, pay stubs, account statements and credit report. Your agent should be preparing a detailed financial analysis of the offer, including the buyer’s debt-to-income ratio and average income. This is something we do for all our NYC co-op seller clients. Third, your listing agent should be reviewing the buyer’s application package before it’s submitted to the management company to scan for errors, inconsistencies, or other things that a board might flag. Lastly, if, after all this, you happen to be unlucky enough to have a board reject what appeared to be a fully qualified buyer, it’s important you have an agent that is experienced, creative, and persistent who can help you navigate the situation, and potentially negotiate with the management company or the board on your behalf to get clarity or movement on their part.
Not Being Kept Up-To-Date By Your Agent
Your agent should be in constant communication with you regarding showings, feedback from those showings, market activity, and changes to the market. Remember that your agent isn’t the one making the decisions – you are. Your agent is there to consult you, give you expert advice, and keep you informed. But he or she can’t make any decisions for you. If you aren’t getting regular communication from your agent on how the sale is progressing, and what activity it’s getting, you’re flying blind and unable to make the decisions you need to make in order to get it sold. When selling your NYC condo, co-op or house, you should expect at least weekly check-ins from your agent to keep you updated on activity on the listing, showings, feedback from those showings, steps they are taking to get it the best exposure possible, and market activity such as new listings or listings that recently went into contract.
It’s also important to make sure your agent backs up all of this with documentation for you to look over. It’s one thing to be told there was a showing and the feedback was good, and it’s another thing entirely to actually see that feedback from the buyer or buyer’s agent directly. A great agent will have tools in place to collect this information and then share with you so that you have full transparency – often in real time – on how your sale is progressing.
Not Being Clear On Terms
Be clear on the terms you need in order to avoid issues down the road. A good agent will sit with you during the initial consultation and discuss some of this, and will continue to communicate with you regarding your needs throughout the process in order to best understand what terms to negotiate on your behalf. Timeline, for example, is one of the basic terms to any offer, and this can be especially important if you are relocating and need time to purchase, or if you have tenants that need to relocate. Not being clear on this from the beginning can lead to negotiation breakdowns or tons of unneeded stress during the closing. Remember that your agent is your fiduciary and MUST hold your life details and personal circumstances in the strictest confidence. Just as with an attorney, it’s important to share this information with your agent so they can properly represent you and know how best to negotiate in your favor.
Being able to get the best terms is also inextricably linked to pricing. Having priced correctly from the beginning will afford you the ability to dictate terms, if needed, that are more favorable to you and your particular circumstances.
Not Making Sure Everything That Needs To Be In The Contract Actually IS In The Contract
Similar to above, make sure that everything that needs to be in the contract IS in the contract to avoid messy negotiations at the closing table. Ask lots of questions of your agent and attorney, and make sure they are asking many questions of you. Assume nothing and don’t take anything for granted. At the end of the day, it doesn’t matter what anyone says if it’s not actually in the contract. The contract is the only enforceable agreement you have if any issues should arise, so make sure if you want something in there, it goes in there. Want to make sure you get to keep that fancy chandelier you installed, or take the custom window treatments with you? Make sure it’s in the contract. Want to be able to take that fancy Sub-Zero refrigerator or Wolf range when you move? Make sure it’s in the contract. Want to make sure the buyer knows you’re leaving the tools and supplies behind? Make sure it’s in the contract. Be precise and be specific. Otherwise, you’re likely to run into major hassles and headaches at closing and possibly beyond.
Not Paying Your Agent Enough Commission
We know… right now you’re thinking “of course a real estate agent would say that!” But here is the plain truth: being a good agent, and marketing homes well, is expensive. Out of the commission you pay, a good agent running a successful business will typically pay out a total of about 80% of it in expenses, fees and incentives to buyer agents. Your commission enables the agent to pay for the systems, staff, photography, videography, and all the marketing power that a good agent brings to the table. Skimp here, and that agent won’t be able to deliver the same service. So-called discount agents or brokerages can only keep that business model by offering less service, or by passing on some of the other expenses to you in the form of transactional fees.
Additionally, as alluded to above, a good agent is also going to pay a significant part (usually half) of their commission to outside agents who may have qualified buyers for your home. Pay too little commission, and that listing agent cannot pay out enough to buyer agents while still being able to deliver you great service and stay in business. Traffic to your sale suffers as a result, and probably your ultimate sale price will, too.
Not Making Showings As Easy As Possible
Showing a property for sale in NYC – especially in Manhattan, is already inherently difficult. Traffic, the absence of parking, the vertical nature of the market, doormen, security systems – all of these things contribute to make showings more difficult in NYC than they are in most other cities. And the harder it is to show a property, the harder it is to sell it. So, with all the inherent difficulties in showing properties and selling them in NYC, a seller needs to do everything in their power to make it as easy as possible and remove any “friction points.”
Technology can be a big help here. Savvy, tech-enabled agents have all the latest systems and tech tools available to allow touchless showings, virtual showings, electronic access to properties, automatic bookings, 24-hour scheduling and more, and to do so in a way that ensures not only security, but also maximum feedback from everyone who sees the property. Our team uses these tools extensively to ensure the maximum amount of flexibility as well as accountability to our clients.
Being Too Hands-Off In The Selling Process
An agent’s job is to take care of the heavy lifting of getting your home sold and make your life easier. After all, as with any other service provider, you’re primarily paying for expertise and convenience. However, there is such a thing as being too hands-off in the process. In order to make sure you are getting the best service, and getting your money’s worth, it’s important you be somewhat involved in the process – at least to the extent of making sure the agent is delivering you top-notch service. Make sure you take a look at the listing ad and the photos. Make sure they meet with your approval. Make sure the copy on the ad is complete, accurate, and free of errors. Make sure you’re getting regular updates and reports from your agent. Don’t feel the need to micromanage – after all, you didn’t hire someone just for you to have to manage each little step – but do make sure you’re getting what you need. And if you’re not, bring it up!
Overselling Or Using Hyperbole
“Diamond!” “Mint!” “Excellent condition!” “Great views!” – fanciful terms you often see in listings of properties for sale that often fall far short in reality. Don’t oversell your property. Remember that buyers will see reality the moment they walk in the door, and you don’t want a buyer to feel like they got a nasty surprise. Point up the benefits and good things about your property, but don’t represent it as something it’s not or be hyperbolic when describing it. Don’t call that 2nd bedroom a “huge bedroom” when it’s a modest 8’x10’ room (the minimum legal size for a bedroom in NYC, fyi). Don’t say you have great views when your view is mainly a wall of the neighboring building and a sliver of sky. We all can feel in our bones when we’re being hyped on something, and buyers – just like all of us – don’t take kindly to “snake-oil salesmen.” If the property needs work, say so. At least then the buyers you get will know exactly what to expect and are likely to be serious buyers. Be honest and accurate. A great description is important, but ultimatley you sell your property best by the presentation and the pricing, not by how much you play it up in your description. Referring back to not being too hands-off, make sure you review your agent’s property description and make sure that it’s accurate and positive without being outlandish and leading to unnecessary questions from buyers.
Moving may always be stressful, but by avoiding these common pitfalls and mistakes you can remove a lot of the unnecessary stress from the sale process, and ensure the smoothest, fastest, most pain-free process possible. Expert help is key to helping identify and avoid your potential pitfalls.
To speak directly to Daniel Akerman– our listing specialist and Manhattan and Brooklyn specialist, make sure to contact him at 646-844-5770.