The Ten Biggest Mistakes When Selling Oahu Real Estate
  By Albert Joy

These are the ten biggest mistakes I have seen happen consistently, and some suggestions to help avoid making them yourself.

1. The Seller hired a friend or relative because of familiarity, not ability

If you hire a good agent, you will probably never notice how good they are. If you hire a bad agent, you will not notice until after you have hired them, and after they have made a costly error. An ounce of prevention is worth a pound of cure. This decision will greatly impact your life, and the lives of your loved ones for years to come. Interview your agent before you make such a huge step as hiring an agent.

2. Without determining needs, decided to wait for a "good time to sell"

Most real estate transactions involve two sides, 1)selling existing property, and 2) replacing that property with one of equal or greater value. There are exceptions. But by taking such a short-sighted approach to solving a situation, the Seller may make more money from the sale of their home, but also the replacement property will be that much more expensive, or worse, no longer available. We have developed a simple needs and equity analysis system that helps property owners improve their perspective on making positive moves with real estate. Time is money, and many times, hanging on to a property that is not achieving your financial objectives is more hurtful than helpful.

3. Put the home in competition with other homes that would not sell

Many times Sellers will compare their property to others that they have seen available. The problem is that the properties that are available are not sold, and are not a true indicator of market value. A good market analysis will include not only active competition, but recent comparable solds, trends within your specific market segment, and at least an overview of other factors affecting the sale of your property, such as financing, property condition and access issues. Some agents refuse to give sellers a price for fear of losing the business by offending the Seller. Our market analysis gives you a value with a margin of error of 1.5%, unless your market area is extremely soft or your property is significantly unique or over-improved.

4. Would not listen to an objective agent.

In a perfect world, people would all have a personal, family agent that they can talk to, ask questions about, and receive advice without fear of ulterior motive. 50% to 75% of listings that go on the market fail to sell, because of inadequate consultation. I would rather that those hopeful Sellers had a good agent that told them, "now is not the time to sell for you, come back to me when you are ready to compete with fair market values". Many Sellers hire their agent after they have already decided to sell, without considering whether it is advantageous to make a move now.

5. Setting a minimum price that you would accept, without regard to market value

"I won't take a penny less than xxx!" In a soft market like this one, setting a price before you see what buyers have recently paid will only ensure that you will be on the market for a long time, if you sell at all. Typically, there is 24 months' worth of inventory, and there are motivated sellers within that inventory. Your Realtor’s first objectives should be to let you know if you are competitive with the market or not. If not, they should be strong enough to tell you now. Even in this market, your property should not be on the market longer than six months.

6. Making and enticing informal offers

"Ask him what he'll take for it". There is a difference between getting Buyer feedback and taking the formality out of legitimate negotiations. By discussing price informally, important details are easily overlooked, can cause miscommunication, and ultimately may can be quite costly for all parties. To the Seller it may mean killing a deal before it was struck. To the Buyer, it can mean obligating yourself to buy a property that falls short of your expectations. Leave the formalities to the professionals. Even I hire someone else to sell my property, because I know an agent will have an objective opinion. And if they’re good, their service is well worth the cost.

7. Failed to maximize exposure to your target market

Who is your target market? Who would be interested in purchasing? What would be the most effective medium to reach them? Selling your home is not a good time to experiment with the method of marketing your property. The best, most qualified and motivated buyer will probably be within the first thirty days of your home coming available. Have you prepared your home properly? Have you hit the qualified buyers with the best, strongest message possible? First impressions are important, and it’s critical that you market the home properly the first time around. They can't buy what they haven't seen.

8. Putting too much weight on the CMA, or appraisal, adjusting too slowly, not listening to feedback from people who were potential purchasers.

So your agent spent three hours preparing your market analysis, and you even paid $600 for an appraisal, but still no Buyers at what you thought was a more than fair price? This is not uncommon, and is best explained like this: in a soft or downward moving market, sales are historical, yet movement is lower than history. So even the best appraisal may not take into account what an actual buyer would be willing to pay. You should have an agent with a sound, consistent system for tracking Buyer's responses. And you should be willing and flexible to listen to their responses. Buyer showings per week should average a minimum of two to three showings. If not, there’s a problem with the marketing efforts.

9. Eliminating options before you decide if it can work for you.

"I absolutely will not help the Buyer with financing, or move out before I'm good and ready". Having choices is a great freedom guaranteed us by our constitution. But for every freedom there is a price. Every time the Seller says I can't do this, or can't do that, it makes it that much more difficult for the Buyer, ultimately driving the value of the property down. For example, just by saying you can not afford to move a tenant out, may easily mean an additional six months on the market. How much lost opportunity occurs in that time period? How much less is your property worth during that marketing time? How many good, qualified Buyers will you lose by not accommodating their busy schedules for a showing? Given the time value of money, how much have you lost in those extra six months?

10. Went with an agent that depends on discounted commissions to get the deal, or tried to sell the property themselves.

In this age of litigation, I still believe that deals are done on a hand shake. However, not everyone feels the same way. Existing, nominal contracts are now twelve pages long, not including any addendums. Typical complete contracts are now 15-17 pages long. We have to hire termite inspectors, professional home inspectors, attorneys, contracted repairmen, disclose everything under the sun, develop relationships and communicate with escrow officers that have proven they can do the job, exchange facilitators, pay for assistants and staff, and invest in high-tech marketing to get top exposure, and proper professional service from proven people for you. All of that, and it takes 90-180 days for a real estate agent to get paid. Would you do that work for the pay? That is a lot of hats to wear.

Beware the agent who is quick to reduce their commissions. They will be even quicker to cut back on service and performance. Beware the person selling or looking to Buy without a Realtor. The Seller may be unnecessarily exposing themselves to litigation if they haven't made the proper representations and disclosures. The Buyer, who normally doesn't pay any fees has little reason to deal with Homeowners directly. One major reason a buyer wouldn’t use an agent? They are not capable of qualifying for a property to begin with. No Realtor worth his salt would show an unqualified Buyer property. Don't haggle on commission. It is difficult as it is for an agent to provide good service, and run their office in a profitable mode when charging the normal percentages, much less when charging a discounted commission. Don’t skimp when it comes time for professional representation on one of the largest transactions in your lifetime.