Mistakes to Avoid When Selling Your Home

What Are the Biggest Home-Selling Mistakes?

Here are nine of the biggest home-selling mistakes, what each one can cost you, and what to do instead.

How Do You Know if You Can Afford Your Next Home?

Before you even think about listing, make sure you’re ready to buy your next home. You can afford your next home if you can put at least 20% down and keep your monthly payment on a 15-year fixed-rate mortgage at no more than 25% of your take-home pay. That payment includes principal, interest, taxes, homeowners insurance and HOA fees. Normally, we tell you to include private mortgage insurance (PMI) in that limit. But putting at least 20% down will let you skip PMI.

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If you can’t meet those guidelines yet, stay put and focus on building equity before you sell.

If you’re buying and selling around the same time—even if you’re downsizing into a lower-cost home—sell first to avoid getting stuck paying two mortgages.

What Home-Selling Costs Should You Plan For?

The most common home-selling costs are agent commissions, repairs, closing costs, staging and moving.

If you have equity in your home, your sale proceeds will usually cover many of these costs at closing. But some expenses, like repairs, staging and moving, may come up before the sale is final—so make sure you plan ahead.

• Agent commissions: Agent compensation is negotiable and should be discussed before you sign a listing agreement. Depending on your market and the terms of the sale, you may also choose to offer compensation to the buyer’s agent.
• Closing costs: These costs could include taxes, a title transfer fee, attorney fees, and a fee from the title company or lawyer handling the final transaction on closing day.
• Staging costs: The cost to stage a home varies widely based on factors like where you live, the size of your home, how many rooms you want to stage, whether you’ll be renting décor, and what the staging company charges (if you use one). You also may want to give some rooms a fresh coat of paint and touch up your home’s landscaping, so you’ll need to factor that into your home-selling costs.
• Home inspection: You should get a home inspection before you list your house. You might not necessarily fix any problems that pop up, but you at least want to know about them ahead of time so you can be transparent with buyers and avoid having any unfortunate surprises down the road. If you decide to make repairs, you’ll need to budget for those too.
• Seller concessions: This is when a seller sweetens the deal by offering buyers some icing on the cake—like throwing in the washer and dryer or paying some (or all) of the buyer’s closing costs. Depending on your housing market, this could be a good idea.
• Moving expenses: The cost to move will depend on a lot of factors, like how far you’re going and whether you recruit the help of your friends or hire a moving company.

These costs can add up quickly, but an experienced real estate agent can help you plan for them. Track each one in EveryDollar, our budgeting app, so you know how much margin you’ll have left after the sale and the move.

Why Is Selling Without an Experienced Agent a Mistake?

Without an experienced agent, you risk a lower sale price and have to manage pricing, marketing, paperwork, showings and negotiations on your own. The median For Sale by Owner (FSBO) home sold for $360,000, compared to $425,000 for a home sold by an agent. That’s a $65,000 difference.¹

Save yourself the hassle of handling everything on your own and hire an agent. But you don’t just want to hire any agent. You want to work with a really good one.

Helping out a friend or family member by letting them sell your house might seem like a nice thing to do, but it’s a mistake to put your biggest asset in the hands of an amateur. You need a seasoned pro with several years of full-time experience who’s an expert in your local market, not your third cousin twice-removed who just got his license so he can start a side hustle.

What Happens When You Price Your Home Wrong?

If you price your home too low, you could miss out on thousands of dollars in profit. Price it too high, and serious buyers may overlook it. Your home could sit for weeks or months, forcing you to reduce the price later.

Don’t trust the internet or your emotions. Ask your agent for a comparative market analysis that shows you what similar homes in your area are selling for. Setting the right price from the start can make all the difference in how quickly you sell your home and how much money ends up in your pocket at the closing table.

Is It Illegal to Hide Major Problems When Selling a House?

It can be. Disclosure laws vary by state, but sellers are generally required to disclose known material defects. Failing to do so could jeopardize the sale or leave you legally liable. Plus, hiding major problems is a low-character, zero-integrity move. It won’t work because buyers are going to find out. If you think they won’t wind up noticing that roof leak or bug problem, think again. Your buyer will likely get a home inspection after you accept their offer, and any problems you’ve hidden from them will pop up.

Just be honest from the start and save everyone, including yourself, time and headaches.

Is Staging Your Home Worth It?

Yes. Skimping on staging is a huge home-selling mistake because staging your home can help it sell faster and for more money. Last year, 19% of sellers’ agents said staging increased the dollar value buyers offered by 1–5%, while 10% reported a 6–10% increase.²

So, don’t show an empty, cluttered or poorly lit house to potential buyers. Instead, keep your furniture in place (and arrange it nicely), clear the clutter, and make sure every room is well lit. If you don’t have any furniture to show off, rent some from a staging company to give buyers an idea of what your house would look like if it became their home.

And while you’re at it, slap a fresh coat of paint on rooms that might need it. Yes, your daughter wanted a purple bedroom, but a buyer might not be a big fan of bold colors. Paying to have some painting done—or getting your hands dirty and doing it yourself—is a small investment that could translate into thousands of extra dollars on the sale price.