Five Mistakes Homesellers Make

The real estate market may be slowing, but that does not mean you need to be savvy and not fall prey to the common mistakes that home sellers often make. Here are five to avoid:

1. Asking Too Much - The single biggest mistake folks make is setting their asking price too high. In a softening market, homeowners need to price conservatively or they risk turning off potential buyers.

How should you set the price? Gone are the days when you can expect to sell your home for more than your neighbor did last year. Single family home prices have fallen for three consecutive quarters and are now down 6.5% from their peak in 2006, according to the National Association of Realtors. So rather than looking at how much homes in your area sold for six to 12 months ago, compare prices for similar properties currently on the market. If you see a listing for a house that is just sitting unsold for a few months, chances are the sellers are asking too much and you will want to set your price a bit lower.

2. Questioning the First Offer - Too many sellers say no to their first offer, even if it close to or at full asking price. Holding out for more money is a strategy that rarely works, especially at a time when interest rates on mortgages are in flux and a potential buyer's purchasing power could decrease.

The reality is that in any market a home's first offer is often its best. That is because educated buyers will pounce on a property they like - with a competitive bid - as soon as it comes onto the market. And do not forget that the longer a home sits unsold, the greater chance a seller will have to reduce his/her price to sell.

3. Not Responding to All Offers - What if you get an offer that is simply too low? Many homeowners will reject it outright. But it is a mistake not to respond to all offers. Here is why. First, you can not blame someone for testing the market - after all in today's market many buyers are confident that they have the upper hand. Second, just entering into negotiations with one party gives you leverage with other potential buyers. Most importantly, it allows you to tell brokers that your property is in play and sends a message that if someone is interested he had better act quickly and present a very competitive bid.

4. Using a Home Stager - Talk with your real estate professional to determine if this is a necessary expense and if it would truly benefit your home selling efforts. There are a number of free or inexpensive things you can do on your own to get your house into show condition. Most importantly, paint the walls. Nothing does more to brighten up a home. Next, get rid of all the clutter, excess furniture and family knickknacks. Finally, make all the necessary repairs before your first open house. If a buyer sees a small problem, say a leaky faucet, he/she is likely to wonder about larger issues.

5. Picking the Wrong Buyer - Now more than ever, sellers need to select their buyers carefully. Thanks to all the defaults in the sub-prime market, lenders are tightening their lending practices, making it more difficult for consumers to qualify for mortgages. So it is critical to find a buyer who is pre-qualified for a loan.

Next, watch out for buyers who need to add contingencies to the contract, including a clause stating that the deal will not close until they sell their own home. A better bet is to look for cash-flush first-time home buyers or someone who has already unloaded his/her existing house. In a slowing market it is difficult to estimate how long it could take your buyer to find someone to purchase his/her dwelling. And if that property doesn not go for as much as he expected, that person may no longer be able to afford your agreed-upon price.