CHAPTER 11 Learn from Others’ Mistakes
To avoid selling your house for less than it’s worth and leaving money on the table, it’s helpful to find out what other people have done wrong. These are examples of costly mistakes, including mistakes made by banks. The final story demonstrates how pricing your home right the first time is crucial in a changing market. UNDERPRICING: THE EASIEST WAY TO LOSE MONEY ON YOUR HOME SALE The #1 reason people lose money on their home sale (as in, not getting all the money they could) is underpricing. They think their home is worth “x” dollars without researching the value. They put their house on the market, sell it for less than it’s worth, and never realize their mistake. That is why it’s so important that you have a real understanding of the value of your home in today’s market. A perfect example is the sellers who sold three acres—worth about $300,000—for only $80,000. They lived about 30 miles away and didn’t realize the development potential the property had. They hired an agent who was unfamiliar with the area, who also didn’t realize the development potential. Their buyer was knowledgeable and experienced with developments. He researched the zoning and discovered the three acres were zoned for high-density condos. The sellers did not know about the zoning, nor did they know the county was planning to build a new road bordering their property. You can see where this one went. In the end, the sellers were not aware they left $200,000-plus on the table until condo- building began.
BANK ERROR
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