Top Nine Houston Home Selling Mistakes You Should Avoid

SELLING A HOUSTON HOME?
AVOID THESE MISTAKES
Common Errors We Found After Analyzing 815,494 Houston Listings


Over the past decade, 815,494 homes have been listed for sale but only 517,751 homes have sold in Houston.

297,743 properties came on the market, inconvenienced their owners with stagings, photos, showings and the entire home sale process and didn’t sell (or haven’t sold).* (205,343 properties sat on the market for more than 120 days before terminating or expiring the listing.)

We analyzed the list price, sales price and days on market of all of them and found 9 mistakes you should avoid if you want to maximize your selling price.

Nearly 50% of listings have a mistake and over 75% of listings aren’t optimized for the Internet. Over 90% of buyers start their home search on the Internet.

Many of these tips are obvious (especially after you’ve read them).

However, here are a few concerning statistics:

  • 48% of Realtors have never ever even completed five transactions in their career.
  • 62% of Realtors do less than three transactions per year.
  • 57% of Realtors have less than 3 years of experience.
  • 84% of Realtors don’t have a managed CRM database of people to contact about listings.
  • ONLY 9% of Realtors are responsible for 86% of the volume of Houston real estate transactions.

“Paige helped our family buy and sell five different homes. She’s the best realtor in Houston because she’s extremely knowledgeable and very candid.  For the sellers, she has the best marketing of anyone we’ve ever seen. She also gives candid advice and consistent feedback. She is THE BEST Houston Realtor!”

Scott & Debi Gordon

With those numbers, it’s probably not too much of a surprise to realize that nearly 50% of listings have a mistake and over 75% of listings aren’t optimized for the Internet (which is where over 90% of buyers start looking).

Contact Paige Martin at Paige@HoustonProperties.com for a free report of your home’s value.

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Avoid Listing Errors

It should be obvious, right?

Your home is typically your single largest asset.

A sale process is important and it takes time and planning. You’d think that the licensed professional you hired to help you (your Realtor) shouldn’t make mistakes, but in the last 10 years nearly 50% of listings that didn’t sell had errors.

A few quick facts:

  • There are typically eight listing documents plus additional home documents which could include surveys, tax information, prior inspections, etc.
  • TEMPO listing forms are typically updated every few years. Agents need to pay for and subscribe (and then use) the most current forms to be accurate.
  • Most Realtors don’t even complete three transactions per year, so these annual subscription fees can be expensive and some agents don’t want to pay for the access.
  • Listing paperwork is typically 35 pages and requires at least 18 initials or signatures.
  • The Seller’s Disclosure includes over 190 questions.
  • The HAR Multiple Listing Service has 290 listing fields.
Listings with mistakes sold for 2.3% less on average and sat on the market for 47% longer than homes without mistakes. Interestingly, 87% of mistakes were committed by agents who did less than $4 million per year in production value.

While we didn’t have a consistent, quantitative method to confirm accuracy of every field on every listing, here’s what our team found by manually reviewing 300 examples:

  • 28% of listings had at least one (obvious) spelling mistakes in one of the two main property description fields.
  • 17% of the listings had one or more missing “critical data” fields (e.g. beds, bath, square footage, lot size)
  • 57% of listings had at least one or more missing values on at least one of the Interior Features values (features related to Energy Efficiency, HVAC systems, room sizes, etc)
  • 19% of listings had “critical data” fields that were inconsistent with HCAD values or prior listings of the same property (while it’s possible that houses added square footage, an extra bathroom, bedroom or lot size from the last time it was listed or what the tax authority has recorded, it’s likely that a good number of these are data input errors).

Listings with mistakes sold for 2.3% less on average and sat on the market for 47% longer than homes without mistakes.

Interestingly, 87% of mistakes were committed by agents who did less than $4 million per year in production value. In Houston, there are over 30,000 Realtors. Only about 10% of these agents were responsible for 90% of the transaction volume.

Statistically, these top 10% of agents were 72% less likely to have mistakes in their listings as compared to the other 90% of agents in Houston.

Takeaways:

  • Hire a professional Realtor (someone who consistently sells more than $4M of homes per year)
  • Double check the listing yourself for any inaccuracies.
Paige Martin’s Recent Awards:
– “One of America’s Best Real Estate Agents,” Real Trends
– Five Star Realtor Award, Multi-Year Winner
– “One of Houston’s Top 50 Realtors,” Houston Chronicle

Not Taking Quality Photos

BEFORE
AFTER

These are photos of the same living room. Note the difference in quality of the Before (untouched) and After (post-staging and taken by a professional photographer) pictures.

In real estate, people do judge a book by its cover . . . or in this case by the first photo of a listing.

We analyzed nearly 1,000 Houston real estate listings over the past year (9,532 photos) and determined quality photos matter.

For our analysis, here’s what we required for a “Quality Exterior Photo”:

  • The home had to be visible.
  • The weather had to be appropriate (no rainy shots, no storms, no inappropriate dark shots)
  • The photo cannot be at an unnatural angle (like taken from a running cell phone)
  • The colors should be clear and natural.

67% of listings led with an exterior photo and 33% of listings led with an interior photo.

Of the listings that led with an exterior photo, 73% were “Quality Exterior Photos” (27% were “Poor Quality Photos”). The listings with a Quality Exterior Photo sold for 2.3% more than listings that did not have a good exterior picture.

BAD
GOOD

For our analysis, here’s what we required for a “Quality Interior Photo”:

  • No obvious mess (e.g. no trash, spill, pet, human body part, tipped over plant, messy toys, unmade blanket, dirty pots & pans, ring around the tub, grime, etc . . . these are all real examples.)
  • The photo cannot be at an unnatural angle (like taken from a running cell phone).
  • The colors should be clear and natural.
  • There needed to be a reasonable amount of light.
  • The room should not be empty.
BEFORE
AFTER


These are pictures of the same dining room. Note the difference in quality of the Before (untouched) and After (post-staging and taken by a professional photographer) photos.

Of the listings that led with an interior photo, 68% were “Quality Interior Photos” (32% were “Poor Quality Photos”). The listings with a Quality Interior Photo sold for 3.4% more.

Our study didn’t have enough data yet to determine the impacts of HDR, touch ups, 3D room views or similar new technologies.

Takeaways:

  • Ensure your home is properly staged (your Realtor should work with a stager to do this for you).
  • Ensure your home is photographed by a professional photographer.
  • Ensure that the primary photo of your home is a “Wow!” photo.

Not Using An Exterior Photo As the #1 Image

According to a 2016 Google Advertising Study (which analyzed over 1 billion real estate images), people were over 25% more likely to click on an exterior photo of a home than an interior photo.

Over 90% of real estate buyers start their search online; and view more than 85 listings before deciding on a home. The primary goal of the #1 image is to get the user to click on your listing to read more about it.

Based on our analysis, 67% of Houston listings led with an exterior photo and 33% of listings led with an interior photo.

DO’s

  • DO: …get a great photo showcasing the property’s curb appeal. Homebuyers only spend seconds reviewing listings. An awesome photo taken from the curb allows them to get a “quick overview” of your house.
  • DO: …take good photos of the door / entrance. This gives off a “welcoming vibe” and encourages the user to continue looking at your photos.
  • DO: …consider taking a bird’s-eye view photo of the property. This is especially effective if the house has a large yard, is on a waterfront, or within a gated- and golf-community.

DON’T’s

  • DON’T: …take curb photos at a weird angle. Make sure the roof line is parallel to the picture’s frame. The last thing you want is to make viewers tilt their head while looking at the photo. It also gives the impression that the property is on a bad plane.
  • DON’T: …add pictures of the interior with bad lighting. Unless the property has good natural lighting, consider asking the photographer to stage the photos with great lighting.
  • DON’T: …take photos using your smartphone. Aside from the lower resolution and less editing options, a listing using pictures from a phone comes across as “cheap”.
BAD
GOOD

Takeaways:

  • Ensure the exterior of your home looks good (power wash, clean, paint and trim) before listing.
  • Take the most flattering possible picture of the exterior of your home.
  • Ensure this picture is taken with good lighting (no shadows, no rain, no storms) and presents the home well.
  • If possible, use this as your lead in photo.
People are 25% more likely to click on an exterior photo of a home than an interior photo.

Don’t Overprice Your House (This is Costly)

Our analysis showed that this was the #1 most common issue that ultimately led to the largest loss in value.

Empirically, over the last decade, our analysis of 815,494 Houston home sales showed (without a doubt) that the value of the average home drops the longer it stays on the market.

On average, a home that sat on the Houston real market for more than 90 days sold for 1.3% LESS than the median sale price in the average, DESPITE THE FACT that these homes were priced 2.2% higher when they originally listed.

While there wasn’t any scientific data to explain the exact culprit, our experience in selling over $250,000,000 of Houston real estate teaches us several factors are at work:

  • The “largest market” for your property is the existing pool of buyers that are looking for a property. These buyers have been building up over months (or in some cases years). You never get a 2nd chance to make a first impression with this group. If you’re dramatically overpriced, they’ll ignore you and often won’t consider you again.
  • Every day, new buyers both enter and leave the market. The longer your home remains “active for sale” you do several things:
    • Lose potential buyers who purchase another property.
    • Gain new potential buyers who start their home search.
  • Depending on the trends in the market, the ratio of new buyers may be smaller or larger than the ratio of buyers who found a home.
  • However, for nearly all buyers the longer you stay on the market the “less desirable” you become. This leads to several things:
    • Buyers assume if someone hasn’t purchased a property, that there must be something wrong with it, and will discount it.
    • Realtors, in an effort to be helpful, will set up filters that screen out any properties that have been on the market longer than 90 or 120 days as a way to reduce the number of properties they need to screen.
    • Deal shoppers set up searches to only screen for homes that have been on the market for longer periods of time and they will work to send in low-ball offers.

A property attracts the most excitement and interest when it is first listed. Much of this attention is lost when a home is overpriced.

We found that there were two optimum pricing strategies, based on the current absorption rates of that property type.

First, in a seller’s market (like 2012 – early 2015), where there is low available inventory and high demand, the best strategy was to UNDERPRICE the home by 2-4% of the market.

While this may seem like an unnatural strategy to sell for the highest price, it works with the following steps:

  • List the home for sale on the market, at an “attractive price.”
  • Not allow showings for the first few days.
  • This builds up the backlog of activity and frenzy with people rushing to get in as more and more potential buyers notice the home and want to see it.
  • Have a “1st available showing date” (sometimes accompanied with an open house).
  • Provide a reasonable delay (1-2 days) on responding to offers (e.g. “Please send me your offers, but know in advance the seller is out of town and won’t be responding to offers until [date].”
  • Take the best offers to a “best and final auction.”
  • Typically this not only results in the highest price, but also great terms for the seller.

The other effective strategy, especially during slower times, is to price the home at or just above market value (within 3-5%).

Typically, this results in shorter days on market, efficient contract terms and an expedited process.

Properties that did the worst, started by overpricing their home by 10% or more. These homes stayed on the market, swapped around marketing strategies and agents and ultimately sold for less per square foot (on average) than comparable homes in the area who listed around the same time as their original list date.

On average, a home on the Houston real market for more than 90 days sold for 1.3% LESS than the median sale price in the average, DESPITE THE FACT that these homes were priced 2.2% higher when they originally listed.

Not Using At Least 15 Photos In Your Listing

The HAR MLS listing service allows every listing to have a maximum of 32 photos.

97% of home buyers use the internet for their search. Not surprisingly, potential home buyers like to look at multiple photos of a property, so they can evaluate it before they want to see it in person.

Among buyers who used the internet during their home search, 89% found photos and 85% found detailed information about properties for sale very useful.

What is surprising is the amount of listings that included less than 10 photos.

We analyzed 16,083 Houston homes for sale. These were all listed for sale with 20 minutes of downtown Houston at or above $300,000 within the last 24 months. Here’s are some fascinating findings:

 ALL HOMESHOMES WITH LESS THAN 8 MONTHSHOMES WITH 15+ PHOTOS
Average Days On Market11213496
Average Selling Price / Listing Price96.4%95.7%96.9%

82.1% of the homes that had less than 8 photos were listed by agents that did less than $3.7M in annual production.

Takeaways:

  • Hire a professional agent (someone who consistently sells more than $3.7M of homes per year).
  • Ensure your home is photographed by a professional photographer.
  • Ensure that your listing has >15 photos.
  • Your agent should manage this for you, but best practices are to include photos of: exterior photos, interior photos of all rooms, yard / common area photos, and then neighborhood or “lifestyle” shots of some of the top amenities in your area, extolling the benefits of living in that building, neighborhood, community or area.
Among buyers who used the internet during their home search, 89% found photos and 85% found detailed information about properties for sale very useful.

Using Listing Photos With No Captions

The HAR MLS listing service includes a “Photo description” field that is a maximum of 250 characters that can be included with each and every photo.

Listings that had photo descriptions, on average, sold 6% faster and for 0.8% more than listings with photos, but without photo descriptions.

74% of the listings without photo descriptions were listed by agents that did less than $3.7M in annual production.

SAMPLES OF GOOD PHOTO DESCRIPTIONSSAMPLES OF POOR QUALITY PHOTO DESCRIPTIONS (THESE ARE REAL!)
Centered on a 1.6+ acre lot, this 1953 home was custom designed and backs to the River Oaks Country Club golf course. Gracious entry foyer and suspended staircase flows to formal and elegant informal rooms. Open areas with views to several custom designed gardens.quite bed room facing the back yard
The SUNROOM (13′ x 18′): The Sunroom has new Pella floor to ceiling windows overlooking the front yard and the enclosed garden courtyard, brick walls, ornamental acanthus leaf crown molding, recessed lighting, ceiling fan and hardwood floors.THIS IS A GREAT DEAL. BIG DEAL. GREAT DEAL TO BUY NOW!
This covered outdoor Living Space features a wood burning, gas assist fireplace, full Summer Kitchen, Mosquito Misting System and privacy galore. The home is also covered by a full house back-up generator.Welcome home! This is a slid home with good bones
This custom-built traditional home is sited across Buffalo Bayou from the River Oaks Country Club golf course, behind security gates in a small and prestigious private subdivision in one of the most secluded locations inside The Loop.Green! makes you smile.
74% of the listings without photo descriptions were listed by agents that did less than $3.7M in annual production.

Not Including A Great Text Description

In the Houston MLS, there is a “description” field that is a maximum 500 characters. This is the first “executive summary” that anyone will read about your home.

Of the 1,000 homes we manually analyzed, 11.2% homes had a blank description. These homes, on average, sold 65% SLOWER than all homes on the market, in addition, they sold, on average for 2.7% less.

98.2% of the homes that had a blank description were listed by agents that did less than $3.7M in annual production.

While we didn’t have a quantitative method to evaluate the description of every home for sale, we believe the following examples highlight the problem.

EXAMPLE HOME DESCRIPTIONS OF $500k+ LISTINGS THAT SOLD IN THE TOP 10% PERCENTILEEXAMPLE HOME DESCRIPTIONS OF $500k+ LISTINGS THAT SOLD IN THE BOTTOM 10% PERCENTILE
The quintessential West University brick manor! Expansive foyer w/ central barrel hall beckons you into the home. Gracious formals, library, full bath, sprawling den, kitchen w/upgraded appliances, fabulous cabinetry (featuring wonderful pull outs & finger touch glides) & breakfast area. Wall of French windows & doors lead out onto the comfortable covered patio, overlooking the backyard. Upstairs offers an over-sized master, separate study & 3 guest rooms (all with en-suite baths).THIS IS A MAGNIFICANT [SIC] HOME THAT IS ONLY OF A KIND EVER. IT’S FABULOUS. ALL DETAILS IN ALL ROOMS. SCHEDULE TO SEE NOW.
Elegance, sophistication & luxury define this coveted residence, located in the Premier Estate side of 2727 Kirby. Breathtaking Downtown Skyline & Medical Center views! Your semi-private elevator opens into an inviting foyer & expansive living room. The flawless open floor plan showcases the expansive views. Carrera marble slab island kitchen, counter tops & backsplash are set off by Gaggenau appliances. The master suite boasts marble details with a shower, tub, custom-designed closet & vanity.Show today.
Stunning French inspired architecture designed by Joy Homes. 5 bedrooms, 5 full & 2 half baths. Fabulous floor plan with study, formal dining, gourmet kitchen with Wolf 6 burner gas stove, Aleutian Marble island, French lime Stone flooring in kitchen, SubZero refrigerator, antiqued beamed ceiling, stunning family room with fireplace & antiqued hard wood flooring throughout. Master suite & guest room down. Game room, media room & 3 guest suites up. Outdoor kitchen with fabulous pool and spa.Great deal! You need to see! Close Proximity to Major Freeways & Downtown*Large Living Area*Huge Entertainment Room Down*Spacious Kitchen*You Must See!

Takeaways:

  • Hire a professional agent (someone who consistently sells more than $3.7M of homes per year).
  • Ensure that the listing description is well written (and double check it for inaccuracies).
Of the 1,000 homes we manually analyzed, 11.2% homes had a blank description. These homes, on average, sold 65% SLOWER than all homes on the market, in addition, they sold, on average for 2.7% less.

Not Having A (Correctly Completed) Seller’s Disclosure

A seller’s disclosure is a document with a series of questions about the home and the seller’s experience while residing there.

A readily available and well documented seller’s disclosure sends a message to the buyer that the owner took good care of the property.

It is the buyer’s opportunity to learn as much as they can about the intricacies of the property, its condition, as well as the state of the neighborhood it’s in and its immediate surroundings.

It also serves to protect the sellers from possible future legal action. A full seller’s disclosure should reveal anything that can negatively affect the home’s value.

A good seller’s disclosure includes:

  • All improvements, renovations or upgrades done by sellers. Aside from noting which renovations had permits, ideally this also includes the specific “change” it had over the original condition of the property.
  • The existence of pets, termite problems, neighborhood nuisances, any history of property line disputes, and defects or malfunctions with major systems or appliances.
  • Documented communication (between neighbors, previous owners, the seller or the agents) about a substantial defect or item that could have an adverse impact on value.
A readily available, concise, and well documented seller’s disclosure sends a message to the buyer that the owner took good care of the property.

Not Playing To The Market’s Timing (If Possible)

If you don’t have any flexibility for when you have to sell your house (e.g. relocation, divorce, death in the family) you can just ignore this section.

If you can decide when you list and sell, it’s important to take seasonality into effect.

The Houston real estate market is cyclical. Most homes close either in the last summer (so parents can get their kids into schools before schools start) or at the end of the year (so buyers can get their homestead exemption).

MONTHLY CLOSINGS OF CLOSE IN HOUSTON HOMES

The above graphic shows Close In Houston sales, distributed by month.

Since the typical contract period is about 30 days, and buyers look at houses for about 45 days before going under contract, the optimum times to list a Houston property for sale usually are:

  • Mid-to-late February (after the Super Bowl) as the Spring Selling Season starts up to catch early buyers.
  • During the Spring (March – April) busy season.
  • Mid-to-late September when people return from summer vacation.
  • October / November (before the holidays start).

There is typically no good way to “time a market.” You only know a market’s high point after the fact. Your goal is to sell when you want to / need to sell and set your property’s marketing strategy in line with the season and trends in your neighborhood.

Goal: Sell when you want to / need to sell and set your property’s marketing strategy in line with the season and trends in your neighborhood.

What you are looking to do is “avoid bad listing times.”

Listing a property immediately before a holiday is typically one of the worst times to “go live.” Buyers are focused on their family and holiday plans, and typically listings will rack up days on market.

Following are usually some of the worst periods for new listing (if you have the luxury of avoiding them):

  • Christmas / New Year’s holiday time (from about the 18th of December until about the 2nd week in January).
  • The days leading up to the Super Bowl.
  • Just before Memorial Day
  • The 4th of July weekend
  • Late August through mid-September (First, Houston is usually VERY hot and buyers aren’t out. Second, most people are focused on getting back to school and the interest in new listings go way down)
  • Days around the Thanksgiving holiday.

It is especially important to take into account the specifics of your market demographic. For example, if you’re selling in the suburbs, you’re going to want to follow school schedules. By contrast, if you’re selling a luxury condo, much of your buyer’s market is going to be traveling for the summer and major holidays.

For specific trends on your neighborhood, contact Paige Martin – Houston’s top ranked Realtor.

Tip: Open Houses Do NOT Work

A recent analysis from the National Association of Realtors showed that Open Houses are over 10 times more effective in getting leads for the listing Realtor than selling the home. The breakdown goes:

  • Internet: 51%
  • Real estate agent: 34%
  • Yard sign/open house sign: 8%
  • Friend, relative or neighbor: 4%
  • Home builder or their agent: 2%
  • Directly from sellers/Knew the sellers: 1%
  • Print newspaper advertisement: 1%

The same study also showed that 86% of homebuyers found online websites as their most useful source of information.

  • Online website: 86%
  • Real estate agent: 79%
  • Mobile or tablet search device: 77%
  • Online video site: 53%
  • Home builder: 45%
  • Yard sign: 33%
  • Billboard: 24%
  • Television: 24%
  • Print newspaper ad: 17%
  • Magazines: 16%
“Paige Martin is the best realtor in Houston. She will tell you the ‘bad’ and ‘ugly’ of a property and help you make a good purchase.”
“As first time buyers in the US, we are delighted to have worked with Paige. She is a delight to work with, and I would recommend anyone to enlist her help if you’re looking to either buy or sell a property.”
44% of recent buyers also said that the first step they took was look online for properties; only 6% drove by neighborhoods looking for available homes and only 3% went directly to Open Houses.

FIRST STEP TAKEN DURING THE HOME BUYING PROCESS, BY AGE

ALL BUYERSAGE OF HOMEBUYER
18 to 24
AGE OF HOMEBUYER
25 to 44
AGE OF HOMEBUYER
45 to 64
AGE OF HOMEBUYER
65 or older
Looked online for properties for sale44%32%42%51%33%
Contacted a real state agent1711131526
Looked online for information about the home buying process13211688
Contacted a bank or mortgage lender714864
Drove-by homes/neighborhoods65489
Talked with a friend or relative about home buying process614935
Visited open houses31346
Looked up information about different neighborhoods or areas (schools, local lifestyle/nightlife, parks, public transportation)1*111
Contacted builder/visited builder models1*134
Attended a home buying seminar121**
Contacted a home seller directly1*113
Looked in newspapers, magazines, or home buying guides1*1*2
Read books or guides about the home buying process**1**
Other1*111

Source: National Association of Realtors: 2016 Profile of Home Buyers And Sellers

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