You've decided to sell your Baltimore home. You are focused on doing all the right things to sell your home for top dollar. But, are you aware of the costly mistakes that could negatively impact your bottom line on settlement day?
I've been in the Baltimore real estate industry since 2008. Prior to becoming a full-time realtor, I spent eight years operating a large rental portfolio consisting of more than 700 single-family homes in the Baltimore area. During this time I learned what it really meant to operate real estate, how to boost income and limit expenses to see the most profit possible. When I meet sellers in the Baltimore area now, they are aware of at least some actions needed to generate the highest sales price possible. But frequently they aren't aware of the common pitfalls to avoid that would otherwise eat up their profit.
Selling Your Home In Baltimore? Don't Just Aim To Sell For the Highest Price Possible
Recently, I went to meet two new clients at their home in Federal Hill in Baltimore City. They stated their goal was “To sell our house for the highest price possible.” This started an all-too-familiar dialogue. I explained to the sellers that we would aim to sell the house for the highest price possible, but we also needed to focus on limiting expenses so they could achieve the most profit on settlement day. Our conversation was a reminder to me that many sellers fall subject to pitfalls during the selling process; they just aren’t aware of common (and costly) mistakes that can diminish their profit on settlement day. What are the common mistakes when selling a Baltimore home? Below I have identified the top four.
Baltimore Home Selling Mistake #1 - The buyer is not qualified and cannot actually close on the purchase of the property
Often overlooked, this is my number one pitfall to avoid when selling a home in Baltimore. Every offer to purchase your home should include either a proof of funds from a bank (if the buyer is purchasing the house solely with cash) or a preapproval letter for a loan from either a bank or mortgage company. Neither should ever be taken at face value. In the Greater Baltimore area, I have found that the spectrum of criteria required for a buyer to get a preapproval letter is extremely broad. Some providers will generate a preapproval letter based solely on data entered by a prospective buyer on an online form - as if a loan is based on the honor system. On the other end of the spectrum, a financial institution may require a slew of documentation regarding income, assets, etc from a prospective buyer to determine the maximum purchase price for that particular buyer, for that particular property, with today’s interest rates taken into consideration. I call every lender and dig into the details of how that preapproval was generated. If this step is missed, you are more at risk of the contract falling through, in which case you have to list the property all over again. Time is money and you don't want to waste it.
Baltimore Home Selling Mistake #2 - Poor real estate contract management
To reiterate from Mistake #1, time is money and you don't want to waste it. Poor real estate contract management is my #2 pitfall to avoid when selling your home in Baltimore.
The MAR (Maryland Association of Realtors) contract is commonly used for real estate transactions in Maryland, and almost always used in the Greater Baltimore Area. Did you know that the standard MAR Contract of Sale has 10 deadlines built into it? This doesn’t include common addenda that are added to a real estate contract for inspections, circulation of HOA documents, etc. I track and meet each of your deadlines and also track the buyer’s deadlines. Missed deadlines cause delays and time is money.
Baltimore Home Selling Mistake #3 - Lack of knowledge regarding the home repair process
Expenses regarding home repairs are one of the most commonly discussed pitfalls when selling a home in Baltimore. It should be no surprise then that I've included this home selling mistake on my list.
A seller can incur expenses at various points between accepting an offer and signing at settlement. The inspection phase is one of those points. Do you know that the course for obtaining a Maryland real estate license does not include any training on home systems or repairs? You read that right. You need a realtor that understands home systems, the nuance of Baltimore-area homes, knows the limitations on the scope of repairs buyers can ask for (a buyer cannot require you to upgrade a working air conditioning unit, for example), is a fierce negotiator, and also has relationships with contractors. Failure to understand the scope of the inspection process and how to tackle repair requests can be one of the most costly pitfalls in a Baltimore home sale.
Before I became a full-time realtor, I spent the eight years immediately prior in the property management field. I oversaw a team of individuals and together we managed more than 700 single-family rental properties in Baltimore City. One of my responsibilities was to oversee the Maintenance Department, where we incurred an average of 10 new work orders daily. I dealt with home repairs in the Baltimore area day-in and day-out. I have worked hard to find contractors and build relationships for my sellers’ benefit. I am well-versed on the limitations on the scope of repairs buyers can ask for. I am not intimidated by repairs and am confident navigating my sellers through the repair process, while keeping their bottom line at top of mind.
Baltimore Home Selling Mistake #4 - Failure to negotiate closing costs
Mistake #4 when selling a home in the Greater Baltimore Area is failure to negotiate closing costs. While the least detrimental to your bottom line of the pitfalls included on this list, don't miss this opportunity to save money.
In every real estate transaction, there are closing costs. Some closing costs, like transfer and recordation costs, are not negotiable – they are based on a percentage of the sales price and charged by the county and state. Other closing costs, like title fees are negotiable and vary company-by-company throughout Baltimore. I include language in every contract that limits the expenses that will be charged to my sellers upfront, well in advance of when the title costs are typically presented to the seller. Title costs are the least impactful of the pitfalls on this list, yet I have on many occasions saved my clients several hundreds of dollars in this area alone.
See my post on title fees.
Selling in Baltimore : Avoid These Pitfalls to Minimize Costs
When you sell your home in Baltimore, the goal is two-part : sell the house for the highest price possible and minimize expenses every step of the way. The combination of the two will earn you the most profit on settlement day. And you deserve to get the absolute most out of your investment!