Everyone strives for perfection, but attaining it can be an elusive pursuit, especially when it comes to real estate. Finding the perfect property, creating the perfect staging, setting the perfect asking price, making the perfect offer…no matter the effort, missteps happen along the way, among both buyers and sellers. Our roundtable of experts and insiders share their insights into common mistakes made on both sides of the table and offer their keys to avoiding them, to the benefit of all parties.
“The real estate market is all about supply and demand. A listing will be dormant for months, but the moment you have an offer, you seem to have three. Buyers and sellers can get the most out of the market by avoiding a few common mistakes. Most commonly, sellers overprice their homes. They take pride in their properties and believe it is worth more than market value. Secondly, sellers often turn down their first offer and consider it as a starting point; however, these tend to be the highest offers. On the contrary, buyers sometimes underestimate how eager a seller is, based on their asking price. I encourage the customer to make an offer, even if it is a bit out of their comfort zone—the seller might be willing to negotiate in your favor after all.”
“Three common missteps buyers make: One, not having the money to buy or the knowledge that they qualify for a loan. It’s so important to have your financial ducks in order. That’s why speaking to a financial adviser who can tell you your budget parameters is an asset. Secondly, finding the home you love. Thirdly, that only comes when you connect with a professional buyer’s agent. Someone who ‘gets you.’ A professional who listens. There’s no need to look at three bedroom homes when you specifically asked for a four-bedroom.
“The biggest mistakes for sellers is overpricing and leaving too much ‘room to negotiate.’ There’s a lot on the market and you need to price to sell, so your listing gets shown. With buyers, once they find something that they like, they continuing to look for something better or for prices to come down. If you find something, especially in this market, make an offer. There’s a lot of inventory and prices are good.”
“Buyers and sellers sometimes have the notion that they know as much [as real estate pros] about the local market from what they have been able to glean from the internet. The reality is that there’s no substitute for a good real estate agent. Internet listings show only a small part of the total picture, and do not take into account complex zoning issues, the various qualities of different locations and myriad factors that impact smart buying and selling. The bottom line—a good real estate agent will save a buyer or a seller money and guide them in buying or selling the right property for the right price and terms. I have seen many a buyer lose out on a perfect property because they second-guessed their agent’s advice in bidding. Conversely, I have seen many a seller lose a great buyer placing a bid and end up having to accept a lower price because again, they second-guessed their agent’s advice on how to response to bids.”
After correct price positioning, sellers need to realize the importance of home-staging services when listing their home and selecting an agent, especially in the East End market. Such an extremely important aspect, but often overlooked, staging and high quality professional photos create first impressions. Buyers often discount a home solely based on the online photos. Particularly on the East End, many buyers are coming from out of the area, sometimes unaware of distinct property values or locations. Likewise, many buyers offer full asking price for properties that are professionally staged, over other properties where location is sometimes much more valuable. Sellers need to recognize that creating the best online presentation of the home is a crucial factor to create interest and increase the volume of showings to obtain a premium sales price.
“Sellers should go into the selling process with the understanding that what they paid, what they put into upgrading their home, and what they want for a selling price may not match what buyers will give them in the current marketplace. If a house has been on the market for a while with no accepted offers, it often means ‘the market is speaking’ and the seller may need to adjust their selling price expectations. Buyers should realize that, unless they have a sky-is-the-limit budget, they may not get every item on their wish list—otherwise they may end up house-hunting for years and still not find their ‘perfect’ house. Every home has pros and cons. They should focus on buying the best house they can afford in the best neighborhood. Buyers should speak to a good mortgage banker before starting their home search to determine their budget and financing options. Taxes play a huge role in monthly payments. Pre-approval letters hold more weight than pre-qualification letters. Buyers also need to factor in closing costs, including the 2% Peconic Transfer Tax and the 1% Mansion tax on homes over the $1 million mark.”
“One mistake a seller can make is to significantly overprice their home. Buyers will not even attempt to make an offer unless they feel the seller is motivated to sell. If a seller does not accept the advice of their real estate agent on pricing their home, I recommend the seller have an appraisal done. The appraisal can save the seller time and money in the long run. One mistake a buyer can make is not to take the time to get a preapproval prior to making an offer. The buyer falls in love with a home to only delay the signing of contracts to confirm what they can afford. This delay can put a buyer at risk of losing the home to another buyer. A preapproval can also spot a problem with a credit report which may be fixable in helping the buyer to get a lower interest rate.”
“‘Don’t wait to buy East End real estate, buy real estate and wait!’ It’s an oldie but a goodie. Some prospective buyers sit on the sidelines and then jump in making unrealistic offers blaming a soft market or an unpredictable economy. Properties priced right by sellers and logical offers presented by buyers will result in a win/win for all! In the Hamptons, where cash purchases are quite common, if a buyer offers cash and a seller accepts that as a condition of price...stay the course! Buyers then fiip-flopping to attain financing can cause discord in the transaction and open up some unexpected doors resulting in delays and possibly a dead deal! Choose your attorney wisely. East End real estate differs from other areas, hence buyers and sellers should carefully consider using a local attorney to represent them. And accepted terms and conditions between buyers and sellers prior to the attorney’s drafting actual contracts should be translated as agreed. A deal can truly ‘go sideways’ if those contracts present a different picture than previously agreed upon.”
“Allowing oneself to be influenced by one’s emotions is one of the greatest missteps that, not only buyers and sellers experience, but people in general. The comparatives speak volumes and loudly and clearly. Buyers and sellers who don’t want to look at the actual ‘comps’ when coming to a valuation of the property they are either selling or buying, is often the biggest misstep I see here in the Hamptons. Judgments are often clouded by what the person wants to believe is the value and not the actual established value through market analysis and appraisal. Not establishing one’s credit limitations clearly is a misstep that I see many buyers make and it forces the buyer to purchase a property on a bank contingency basis, which puts them at a disadvantage over the cash buyer. This can easily be avoided by approaching the financial institutions prior to home shopping and establishing exact parameters for what the buyer can spend. Knowing the market well enough to have confidence in the valuation of the property will further help to avoid shooting too high to actually get a mortgage approved. In the end, if you are borrowing, establish your credit limit with your bank and shop within that limit. Try to force your lender to give you a commitment contingent on the property, appraising for the value that you have placed on it. Sellers often don’t want to use all the tools in their arsenal to help them sell their homes. I have seen many sellers resist the opportunity to put a sign that says ‘For Sale’ in front of their house, for whatever personal reasons they may have. The kind of exposure and conveyance of availability that a sign brings is of enormous benefit to a home seller, and I find that many people do not wish to understand this concept.”