In a world where Pinterest, online videos and specialty blogs encourage you to try any number of projects, it’s easy to think you’re up to any do-it-yourself challenge. While some projects are low-risk, like trying a new recipe, others, like shingling your roof, can cause serious problems if done without the proper expertise.
Buying and selling a home are activities that fall into the latter category. Without the experience of a real estate agent who knows your neighborhood, you risk losing thousands of dollars. Or you could find yourself in a lawsuit because you didn’t understand your legal responsibilities.
Here are just a few of the costly mistakes that “do-it-yourselfers” risk making:
Buyers
Paying too much
Just because a seller has a house listed at a certain price, doesn’t mean it’s worth that much. Without knowing the sales price of comparable homes in the neighborhood, it would be easy to make an offer that’s too high.
You might also miss out on potential deals because you don’t know if the housing market in your area is getting hotter or cooling down. Or you might pay too much because you didn’t know homes in a certain neighborhood sell for less than those in surrounding neighborhoods.
Experienced real estate agents are familiar with all these factors. They can help you make an offer that takes into account the house’s location, condition, size, amenities and demand from other buyers.
Failing to research the house
In Utah, the law tells buyers to beware. That means it’s your responsibility to determine the house’s condition. It means studying structural issues like the roof, stucco, soil stability and foundation. It means investigating the home’s appliances, plumbing and electrical systems. It means testing for hazards like meth, radon and mold.
But that’s not all. Buyers also need to research the neighborhood. Does the zoning allow you to do what you want with the property? Does the easement in the backyard allow you to build what you want? Are there restrictions from the HOA or city that would prevent you from renting the property? What are the future plans for the empty lot next to the house?
These are just a few of the many items buyers should investigate. I once heard the story of a buyer who bought a home without a home inspection. Not long after the purchase, the new owner needed to come up with $70,000 because the house was sinking.
It’s critical that you thoroughly research any property you want to buy. Unfortunately, many buyers don’t even think about looking into these issues without having an expert point them out.
Sellers
Pricing your home too low
Without knowledge of local real estate conditions, it’s easy to incorrectly price your home. While many automatic valuation models and websites claim to tell you what your home is worth, there is no substitute for working with an expert.
An agent sees firsthand the demand for properties. An agent knows whether a market is headed up or down. An agent also knows how to adjust for the unique aspects of your home.
Recently, a Salt Lake Realtor was telling the story of a seller who used an automatic valuation on his home that told him to sell for a certain price. In actuality, the price from the model was $25,000 less than what the home was really worth.
Research from the National Association of Realtors recently found that those who sold without an agent received 24 percent less than those who used an agent.
Forgetting about important disclosures
When you sell a home in Utah, you are required to provide information about any “material defects.” That means telling the buyer beforehand about any problems you’ve had with the house that aren’t readily discoverable.
For example, if you’ve had a leaky roof or shower, you need to disclose that in the transaction. Otherwise, the buyers may sue you after the sale if they find problems you should have told them about.
As you can see, there are many potential pitfalls involved in a real estate transaction. Fortunately, you can avoid many of these problems when you work with a professional and properly investigate a home.
It is my pleasure this year to provide this column to share tips, trends and information about the real estate process. To learn more and to find a local Realtor, visit NWAOR.com.
Sonya Smithing
2017 President, Northern Wasatch Association of REALTORS®