By Sajida Pellegrini
Buying and Selling real estate is usually a very emotional process. As a REALTOR® I know part of my job is to remain objective and keep my clients on track. This is because people may not be thinking as clearly as they would like to during the process, which can lead to mistakes that can cost them.
Why do people make emotional mistakes in real estate?
Real estate transactions often coincide with important life events both happy and not so happy. For example having a baby can be an amazing joyful experience, however it is often accompanied by many stress factors. Parents are overwhelmed with so many important decisions about the baby, and now have to also think about logistical issues of perhaps needing more living space to raise a family. And can they afford to upgrade to a larger home?
Other emotional life events that often accompany a real estate transaction include divorce, a death in the family or moving to a new city.
Here are the 5 most common (emotionally triggered) mistakes I see people make:
Pricing your home incorrectly for the market
It’s hard to stay objective when pricing your own home. Your home is the largest investment you have likely made in your lifetime and you have put a lot of blood, sweat and tears into it. As a REALTOR® I want to see you get the maximum amount of money for your home and not a penny less.
However when pricing your home, it is important to stay objective.
What I like to do is sit down with all potential clients and show them exactly what other similar homes in the same neighbourhood are selling for. We actually look at MLS® together and go through all the comprable homes that have ACTUALLY SOLD in the last 90 days.
Together we come up with a price that makes sense and feels right to the seller. Buyers will shop around, so if they find a home that is similar to your home for much less, it’s unlikely they will pay more for yours. The first two weeks your home is on the market is crucial and when you will see the most activity. Being priced correctly right out the gate can give you a big edge in the market.
Renovating the home with a very specific taste.
Your home is your castle and who doesn’t want to make it their own? It’s important however to remember that the average person moves every 5 to 7 years. With that in mind think very hard about what renovations you want to do and whether they will help improve your home by adding value or if they will deter buyers from buying your home. If you are thinking you may move, you will want to consider which types of renovations to actually do.
For example, wall colour is easy to change. You may love those red walls -so go for it. However when you are ready to put your house on the market, budget for a painter to paint the walls with a neutral palate. Your house not only will likely sell faster but you will usually get 90% of what you paid the painter back.
But watch out for more permanent, unorthodox changes. For example you may think installing a hot tub in your living room is a fabulous idea! It’s likely the future inhabitants won’t!
Over improving your home for your neighbourhood.
Renovations can add value to your home but be careful about how much money you spend and on what. We all know kitchens and bathrooms sell houses, so these are good areas to improve.
Depending on your neighborhood, you may want to stay away from the exotic granite countertops and ultra-high end finishes. Although you will likely see some return on investment, if you “over improve” in a less desirable area, you may not get as much back as you expect.
When thinking about renovating also consider asking a REALTORS® opinion. This can even help you if you are working with a builder. A Realtor can not only help negotiate the price for you, but can also negotiate things like finishes, landscaping and appliances and tell you what is appropriate for the neighborhood and what type of return on investment you can expect if you sell.
Buying the wrong layout for your family
We have all done it. Gone to a show home and fallen in love! Or even fallen in love with a resale home that is staged amazingly well.
If you are a buyer, be cautious of all the pretty staging. Before you start looking, you should sit down with your REALTOR® to discuss your wish list. This should include things like “absolute must haves”, “like to haves” and what you “can live without”.
An experienced realtor can also guide you on what type of layout is better for a growing family and what might be okay for an adult-only lifestyle. Focus on the functionality of the home and watch for things like the entryway. Is it large enough? Is there enough closet space? How much counter and cupboard space does the kitchen have? How does the space flow? Every family is different so think about how you and your family live and use space.
Buying a home that your family cannot afford
The first thing you should do when thinking about purchasing a property is to sit down with a mortgage broker. A mortgage broker can take a look at your finances, calculate your debt to income ratio and tell you about any recent changes with mortgage rules.
Once you are pre-approved and your mortgage rate is locked in for 60-90 days you can move on to house shopping.
It’s important to also remember that just because you “qualify” for a mortgage at a certain level, does not mean you should necessarily maximize this amount. Think about things like do you plan on taking vacation? What other activities do you and your family partake in? What type of lifestyle do you want live? Buying your dream house is exciting until you realize you are house poor and cannot afford to do things you once loved. Your REALTOR® should be able to guide you, look at your budget and show you homes you can actually afford in a neighborhood that is right for you.
About Sajida Pellegrini
Houses are more than just land and buildings to be bought and sold. They are people’s homes that create the lifeblood of communities. It’s the spirit of the community that inspires my work as a REALTOR and as a volunteer. I love giving back to Edmonton in various ways including feeding those in need at the Hope Mission Centre, volunteering for my community’s events and through the greater good program at The Good Real Estate Company.
When I’m not helping my clients I spend time enjoying my own home and community with my family, drinking a Chai at my local Remedy cafe and connecting with friends over a glass of wine.
I’ve always had a knack for marketing and promotions. It’s truly what sets me apart as a REALTOR . I do not rely solely on traditional real estate marketing strategies. I love using social media in unique ways that will allow your property to shine. Using live stream videos, professional photographs and spending my marketing dollars on promoting your property, rather than promoting myself as a REALTOR® . I know if I do my job well my clients will recommend me to others, and in my opinion that is the best type of promotion.