Real estate sales mistakes – valuation too high, wrong buyers and burnt houses, hardly anyone has experience in selling houses and apartments. Even less, with land, forest land or even agricultural land. Already knew: Annually only about 271,000 real estates are sold in Germany. Hardly anyone has experience in the sale of real estate. Mistakes are made accordingly fast. And mistakes cost a lot of money, because even a 5% loss of the purchase price makes a lot of difference for a condominium for 200,000 euros, a whole 10,000 euros loss, painful for private individuals. It becomes even more violent with multi-family houses, for example after a sudden inheritance, what is such a MFH worth? How do you deal with tenants when it is sold? So what do you have to pay attention to when you want to sell your property? Whether it’s a plot of land, condominium, house, villa or apartment building – the 15 typical mistakes when selling real estate.
Dangers when selling: What to watch out for! Checklist
Before we get into the material errors, risk and dangers, importantly:
Sales and procedure: get to know step by step
Before the mistakes more basics?
In our great guide on the subject of selling property and selling real estate, we have already discussed many aspects that matter when selling a house, apartment, land & Co. Whether real estate or property, is a big difference. We have even more specific guides that deal explicitly with the house sale, apartment sale, land sale and even the sale of villa and apartment building.
Now it’s not about the process, it’s about the mistakes that occur in the process from preparation to the sales phase!
Everything begins, with many questions. And that’s a good thing! Because questions mean that you are not just superficially concerned with the process of selling real estate.
Price, marketing, documents & Co.
One tip in advance, always ask yourself questions like these. This is because you will quickly realize that selling real estate is not a simple and straightforward endeavor. Therefore, it is good that you inform yourself now, ideally, early about the sale of your property.
When should or must the sale be completed?
How do you value your property for a solid asking price?
Which marketing strategy is used?
How do you ensure your accessibility to prospects?
What information do you provide via email and on the phone?
How do you make sure the buyer’s financing is in place?
What documents do you need to have ready?
When will the purchase price be paid / the property handed over?
Questions upon questions, let’s go through the typical 15 mistakes step by step.
Too little time planned for sales
Little time? Pressure is already coming – mistake number 1: Many who sell their first property assume that everything will happen very quickly! After all, living space is scarce. Even if everything possible is done in the marketing, from newspaper ads to real estate portals, some properties are real slow sellers for years.
Quantity is not everything, quality is what counts.
In fact, real estate loses its attractiveness massively, especially due to mistakes. Too many portals, too many brokers, advertised too long – why? This is exactly the question prospective buyers ask themselves and quickly switch to the next offer. After all, they have the free choice. The price pressure begins. If time pressure comes into play because too little time was planned for the sale, many sellers have to accept losses.
Pressure from compulsory sale: relocation, new financing & Co.
If the time is short, for example when must be sold (!), by private or professional reasons, there is often only one way, a significantly lower purchase price. Accordingly, the losses, if the time pressure increases, are significant.
Tip: Always plan your real estate sale early, at least 2 months in advance
But pressure can also arise because other loans must be serviced by the sale. But perhaps the new property is already financed and accordingly the old property must be sold now, immediately, as described here in the article sell house fast.
Time pressure is never good and only brings disadvantages for real estate sellers.
The wrong time to sell
Error 2 – In principle, there are 2 parameters for the time factor.
Parameters 1) at what time of year is best to sell, so when are people looking for real estate? Also, many wait, because 2) after all, the value of the property increases every year.
Selling at a certain time of year
Selling after appreciation
But, when is actually the right time to sell a property? Many people know that the value of their own property, whether land, condominium, house or apartment building, will generally continue to rise. Due to economic factors (depreciation of money [inflation]) and of course because living space is scarce, especially in cities like Hamburg, Munich but also smaller ones like Kassel, Düsseldorf or Braunschweig. The population is growing due to immigration and people are drawn to the cities and prices rise accordingly, year after year.
Factors of permanent value enhancement:
Inflation (devaluation of money)
Population growth due to immigration
Urban exodus, many move to cities and away from the countryside
Statistics: House price development (example: Germany)
As can be seen here, the almost linear increase in house prices in Germany over the last 20 years. In the statistics or the diagram to see the development of house prices in Germany in the years from 2000 to 2020 (2015 = index 100).
In the stock market, this effect is called all-time high, which means that due to the typical economic developments, including fiscal policy, but also the increasing world population, the amount of money you get for your property increases. Just compare the real estate market with the DAX (German stock index).
So let’s look inside also the appreciation that happens every year is a good year (aside from crises like pandemics).
Seasons matter?
Spring, summer, autumn and winter, does it make a difference when selling real estate? When it comes to the seasonal factor, you might think that more people move in the spring and summer and that more properties are bought accordingly. But in fact, renters look for homes relatively spontaneously, while buyers go through a longer-winded process. Some look for not just weeks, but months and years. After all, the real estate is not “only” about a yield property for renting, for a large part of private buyers, the condominium, the terraced or single-family house is the retirement provision. It must therefore please, because one will stay here for a long time.
Due to the relatively long property search cycle, the time of year factor does not play a major role with buyers.
A small one though, a very small one. If you are absolutely looking for an answer, then I would recommend the autumn for the sale of your property. Over spring and summer people make new plans, which then have to be realized in late summer / autumn at the latest, before winter comes.
Inaccurate description of the property
Mistake 3 – The exposé is written unprofessionally – The more inaccurate the property description, the fewer prospective buyers your property will attract. Instead of a long description, here are the most important key data that a good property description or a complete real estate advertisement must contain:
An object description should at least contain this information:
Meaningful title
Address, or location and district
Living space
Footprint
Apartment type / House type
Available from when
Number of rooms
Bedroom
Bathroom
Garage / Parking space
Internet
Features and Extras:
Building fabric & energy certificate
Year of manufacture
Modernisation/refurbishment
Object state
Equipment
Heating type
Energy source
Energy certificate
Documents in the first step:
Floor plan
We as investors are no different!
A practical example: When we are offered real estate (condominiums to apartment buildings), one would think that sellers send important information. In reality, however, it is usually only a concise sentence: “I want to sell”. No photo, nothing. Accordingly, people don’t even take the time to answer such offers. Why? If there are 10 offers, 9 are easily accessible and with information (floor space, living area, room layout, for example). This is also how buyers act. There are many offers in the city, which one is appealing and attractive at first sight, so it is opened / read and which one is not?
Complete and comprehensive information is the A&O. Therefore, you must always pay attention to an accurate object description, the second important factors exposé, the photos!
Error 4 – Just like Exposé, by bad photos the demand sinks – We come first to the very most important, the photo and pictorial material of your real estate! It doesn’t matter if it’s a luxurious villa, a condo in the city center or a single-family home on the outskirts of town. Here I want to show you a few standard mistakes with examples.
Villa from the outside: Error picture detail
Villa from outside: Error image noise
Detached house from the outside: blurred and overexposed
Condo from the inside: Detail and color
Condo from the inside: Poor exposure
Here you can see the first, simple example. Just look on portals like Ebay, there you will see many of these photos. Here the mansion from the outside with errors in the image detail. In addition, the camera did not have a good resolution. In the after example, you can see the difference immediately.
Condo before.
Condo after.
Only when information and visual stimuli come together does real interest in the object develop.
The other 4 before / after example can be found here:
Mistake 5 – The term target group is otherwise known from marketing. A target group describes a group of people for whom a certain offer is of particular interest. But why is the target group so important?
Every person who needs to know about a real estate listing takes time, so it costs cash.
Many who sell their property privately, put it immediately on eBay and other portals. For small units, e.g. condominium with 70, 80 square meters absolutely okay, if someone really wants to sell on their own from (and risk). But everything costs time and thus again money.
Two practical examples directly: For example, if a new building with student apartments is to be advertised, the classic newspaper would probably not be the best choice. Likewise, an exclusive villa is out of place in a real estate portal, everyone can see details of the villa, save pictures and videos of the premises. Which buyer of a luxury real estate wants that the own villa is still somewhere findable later? Think above all of the security aspect, security is very important to sellers and buyers, in this segment. When real estate is sold anonymously, it is called off market real estate.
The target group address begins with:
Broker selection: Buyer groups and expertise
Marketing strategy: offensive or off market
Channel choice (media): newspaper to social media
Object description: Especially the title
Here’s another little overview of how different the marketing of different types of houses and apartments can be.
Marketing strategy basics in comparison:
Apartments for students
Condominium for young couples
Terraced house for the family with child
Detached house for families
Loft apartment in the city centre
Villa for entrepreneur in the suburb
Apartment house as investment property
Building plots for project developers
Properties in need of renovation with 50+ units
Forest land or agricultural land
Properties are as different as their owners. Accordingly, the marketing strategy must also be chosen individually, from the classic newsprint to the modern campaign in social marketing. Tip: Read more about social media marketing for real estate here (external). So every type of property needs the right marketing strategy, from absolutely anonymous and sales to high-reach marketing on portals.
We specialize in the anonymous brokerage of real estate, directly to family offices, real estate investors, construction companies and developers. Read more about our purchase profile here.
Value of the property is incorrectly assessed
Mistake 6 – If the price is too high, your property will not find interested parties – Hardly anyone has experience in selling a property and when the first visit to the real estate agent is due, most make this typical mistake, which later leads again to the property not being sold promptly or not at the desired asking price. Important:
An offer price is not a selling price!
What is the error, the incorrect valuation of a property, in the specific case?
As already described, only a little over 271,000 properties are sold in Germany each year. Accordingly, it takes a long time until all 83.7 million inhabitants have had the experience of how the sale proceeds. Conversely, it means hardly anyone has experience with the sale of apartments and houses. Calculated briefly:
Inhabitants / sold properties = years until everyone has the experience from the sale
83.700.000 / 271.000 = 308.85, so round about 309 years (impossible)
So when it comes to real estate appraisals by real estate agents, there is only one thing left to do: trust.
Danger. The real estate valuation is too high
Comparison offers – so that you do not trust the first real estate agent, you get several comparison offers. A very good idea, but also a deceptive trap. Let’s take a look at why:
Broker A values your property at 980,000
Broker B values your property at 945,000
Broker C values her property at 1.15 million
Which real estate agent do you think will win the bid to sell your property? A large proportion of sellers will now opt for estate agent C, with the large offer of 1.15 million euros. This effect is all too human, after all, there is at least + 170,000 more than the comparison offers, so over 10% more on the sale.
Now the vicious circle begins, the property has too high an offer price. Of course, the real estate agent advertises it on all possible portals so that the deal somehow comes about at the stated price. But it will not, if the offer price differs from a realistic market value. A little room for negotiation is of course always ok, but as soon as the sums are too high, interested parties jump off after a few seconds. This means you don’t get an inquiry – accordingly, many don’t recognize the underlying error: the offer price is too high. Here we come back to the exact object description, which also includes a solid, well-founded offer price.
Notice:
Realistic sales prices (market value) accelerate the sale
If you want to sell your property, don’t just look for a “high price”, get involved with estate agents who also see critical aspects of your property and don’t just promise you the moon in order to get the contract.
Dangerous, because many owners also see a high emotional value in their property. The potential buyer, however, has no emotional attachment to the offer.
Trust in real estate agents who also take into account critical aspects in the calculation.
Tips on the subject of real estate valuation can be found here, among other places:
Error 7 – Documents are not available – e.g. floor plan, living space calculation or the extract from the land register). The extract from the land register is important, for example, because it is direct proof that you are the owner of the property for sale. As soon as the first, solid prospective buyer comes knocking, you need these (following) documents. Here is a simple and clear checklist of the documents and papers you need when selling a property:
In addition, there are the photos of the property, as already described above.
For condominiums there are a few special features, as you (usually) do not own all the condominiums in the property. If you are the owner of several condominiums and want to sell them, take a look at our purchase profile for real estate!
Documents for condominiums
For condos, you’ll need to get a few more documents.
Partition plan (showing special and common property)
Common rules of the community of owners
Minutes of the owners’ meetings
Service charge statements
Amount of the maintenance reserve
Property is not prepared for viewings
Mistake 8 – The eye eats with you! Not only with the previously described real estate photos, as a visual, first impression, also at the viewing everything should be prepared for the visit. Here we are again with the two sales factors: numbers and emotions. The numbers have usually already convinced before the visit, through data sheets, exposés and other, direct information exchange. Now it’s a matter of presenting the property visually and haptically.
It’s a bit like business meetings, a suit expresses that you’re making an effort and paying attention to detail. If you show up to a meeting in sweatpants and sneakers, you usually lead a casual life. Along the lines of, “So if something breaks, no problem, you can do it later.” For first time sellers maybe this comparison from everyday life, on average car sales are 23% higher if the car has had a thorough cleaning beforehand, outside, inside and engine bay.
Details such as order, daylight & Co – It is the same with the inspection of house and apartment, as well as properties, here everything should be prepared, tidy and neat. Cleanliness is a point, but also the smell plays a role. For me personally also very important, fresh air in the rooms, even if the properties are in need of renovation. Also important: daylight! As with the real estate photos, daylight has a very special factor, light and brightness are always good selling points.
Viewing always only during daylight
Professional cleaning – The day before the first viewing, it is also advisable to hire a professional cleaning team, so to speak, for the basic cleaning. If the appointments are well timed, it is also profitable to hire a cleaning team that goes into detail once. With only 3 or 4 hours of work, a lot is already done in a house. This in turn has a positive effect on the purchase price to be achieved. For further viewings then a quick check is sufficient whether everything is still tidy. When the value of a car can be increased by up to 23% so easily, it quickly becomes apparent how effective preparation for the viewing can be.
The day before the visit: Cleaning to a high gloss
Psychology also plays a role – In addition, there are many subtleties and also small, psychological details that you can apply depending on the target group. A very general tip is: smile! Who provides a positive environment or ambience, creates a good mood and thus increases the probability of the sale. Going even deeper that just mentioned in passing, a warm drink! The one who offers cool drinks creates a cool atmosphere. A coffee, a tea or a hot chocolate, creates directly a completely different ambience.
Here is one last important tip, you always have to get involved with the buyer’s side. If the buyer is e.g. very experienced in the subject of real estate, I hold myself back as a consultant. If the buyer is inexperienced, I take him or her along, step by step, in the process of selling real estate. Sometimes, however, a very active person may need an active counterpart. Now this is explained very briefly and simply, it just means that the more negotiations the seller has already conducted, the more secure and profitable the sale of a house, apartment, apartment building or land will be.
To recap:
Cleaning of the interior and exterior surfaces
Professional support on the day before the first viewing (high gloss)
Daylight during the tour
Friendly greeting, smile at the beginning
Drinks and snacks for the small appetite (also for small talk)
Responding to the buyer personality
PS: Also think about defects! If these can be repaired in advance, this increases the purchase price. The costs and (!) Effort are omitted for the buyer.
Underestimated effort of the sales process: Inquiries
Mistake 9 – Many first time sellers assume that one or two people will call, come right over for a viewing and a week later the house or condo is sold. However, the sales process is not that simple, as communication times in particular are extremely long and involved. By the underestimation of the expenditure of the sales process, many get under pressure, bspw. if the new real estate is already financed. Time pressure is extremely bad, as already described in mistake 1 “Too little time planned for the sale”. Therefore, it is important that you do not underestimate the effort of the sales process of a property.
This is also where we come back to the mistake of being on many portals at once. Imagine your ad is on Ebay today and you have calculated the price too low. Tomorrow you already have 100 emails in your inbox. Which of them are really interested in the property, really interested? You can’t possibly send 100 replies and then answer queries, make phone calls, all before the very first viewing.
Especially this selection of inquiries in the first communication is a very time-consuming factor in the whole sales process. Finding the few, serious buyers requires a lot of experience and usually a good team in the background.
Negotiation in the sales process: leading the conversation
Mistake 10 – After the underestimated first communication and the very many inquiries, comes another step, which is even more important for the selling price: The negotiation(s)! Who is not well prepared here, which will meet in particular with experienced real estate buyers quickly on people who have a lot to criticize and already the price is in the cellar.
For this very mistake, the entire article is generally written. If you think of the process of selling a property as simple, you are making a big mistake. Just take a look at the table of contents and the various headings we cover here from “Too little time planned for the sale” to “Unflattering photos in the exposé” to “Property is not prepared for viewings”.
Of course, you can acquire knowledge through books, learn how to do it. But this costs time and often works in the first, second and third sale according to the principle “trial and error”. That is, you will usually pay apprenticeship money, by mistakes you make as a beginner.
Prospects stall you too long
Mistake 11 – After the inspection and the initial discussions, or the first negotiation, the detailed negotiations (via email, phone, document exchange) follow. Now comes the next source of danger: Prospective buyers stall too long! Valuable time is lost, the property is burned by long listing time. The big question:
How many viewings do you want to do before the property is sold?
Just as a great deal of time is wasted in the first communication, that is, in the first inquiries, for half-hearted inquiries, just as much time is wasted in conversations.
From the first visit to the exchange of documents and documents, the second appointment, especially for larger properties and objects, a lot of time passes. Some buyers then also put the gun to private individuals, please during the time of negotiations, not to talk to anyone else. This can make perfect sense if you are talking to a very solid buyer, but how can you tell as a private individual?
If then 1, 2 months are negotiated back and forth, with personal appointments, e-mails and on the phone, but then no sale is made, the frustration is great.
You generally notice, a big mistake in most cases:
Sales phase is designed alone
Mistake 12 – Selling privately without a broker and expertise – A private sale always sounds great at first, after all you don’t have to pay the broker!
Did you know that in Germany over 65% of properties are sold with an estate agent? Especially in the big cities the number is much higher, in Berlin for example 80%. There are many reasons to hire a real estate agent, for wealthy people it is mainly the time and anonymity. How time-consuming the process is, we have discussed in detail in the last sources of error. For individuals who have no experience in selling houses and apartments, there are various aspects, e.g. the credit check of the buyers, the initial communication at the beginning of the sale and the selection of interested parties, up to the purchase contract and the errors and pitfalls, which we will discuss later.
You can sell privately, but not the first property. Mistakes quickly cost you 10%, 15% of the purchase price, to put it simply.
In the case of a poor property valuation (see Error 6: “Value of the property is incorrectly assessed”) even much more.
My tip for all first time sellers, work with someone who has experience dealing in real estate. If by some lucky circumstance you later sell a second, third property, you may be a little more in the game. Once you sell your fourth, fifth property, you may be able to go the distance on your own.
Ultimately, the professional cooperation with an experienced real estate agent 1) brings more time and brings 2) more money. It is not for nothing that two thirds of the properties in Germany are sold with an estate agent. Half of the broker’s commission is paid by the buyer anyway (in the case of private properties). In addition, there are the properties that were not officially made with the help of real estate agents, but e.g. with family offices like us, who also mediate, but only in a very small, private circle.
Proof of financing (creditworthiness of the buyer)
Mistake 13 – Buyer’s credit rating not checked – how do you know if a prospective buyer can really afford your property?
In modern business transactions, it is no longer possible to imagine life without checking creditworthiness. The reliability in payment matters is already checked with every purchase with a credit card. Even the purchase by instalment in the electronics market, for example, only works for the customer if the creditworthiness is checked immediately. The classic institution for creditworthiness information of all kinds is Schufa. Since 1927, this private credit agency, which is organised as a public limited company, has been keeping track of people’s reliability in terms of their ability and willingness to pay.
Credit rating a new topic for you? Learn a few basics here:
Error 14 – Rights but also deadlines, this aspect around law and laws in the sale of real estate, or in the contract of sale, the property to be sold, I will discuss only very briefly. In case of doubt, you should consult a notary or a real estate lawyer in advance for everything.
Here is just a small example from the German Civil Code (BGB), on possible material defects that you as the first seller may not even have on the screen. If you do not explicitly exclude them in the purchase contract, you remain responsible for subsequent performance.
Example:
Remedy of material defect, exclusion in the purchase contract: Example
This example is from §§ 437 No. 1, 439 BGB and states:
If, for example, there is a material defect in the existing property to be sold and the rights of the buyer due to this defect were not effectively excluded in the purchase contract by you, the buyer can always, in principle, first demand immediate supplementary performance (i.e. rectification of the defect).
When such a material defect exists in a specific case is also regulated by the BGB, more precisely § 434. According to the law, it exists in the following cases: “A material defect exists if the purchased item does not have the agreed quality at the time of transfer of risk.
Burn property: Special for apartment building +
Mistake 15 – Large or exclusive properties in mass portals – Exclusive properties such as villas, large properties such as new buildings, special projects such as land, forest land, agricultural land & Co. – In this article we talk about the mistake, or risk and danger of private sales of larger properties and projects, or land or properties in need of renovation over 30, 40 or 50 residential units.
Comparison of buyer types
Let’s first look at the different types of buyers and how they review and value properties. The word “ETW” stands for condominium. We look at 4 groups of buyers:
Group: ETW / house 80sqm ~ 200.000 rather indifferent; means also the buyer side is mostly inexperienced, it is less examined
Group: 150sqm ~ 900.000 / critical buyer
Group: 200sqm ~ 1.200.000 / researching buyers
Group: 250sqm and over 1.5 M / examining buyer
Group: large properties, new construction, agricultural land, etc. – special real estate / very experienced buyers, mostly with their own real estate office
Group 1-3, i.e. properties up to 200sqm, are mostly in the regular property market, in which “only” private individuals are interested. The typical marketing strategy here is: A lot, helps a lot. Often 2, 3 brokers are commissioned and the property is already in 4, 5 portals, newspapers, maybe even on social media networks.
Group 4 buys properties over 200 sqm, but still private. Who buys in this segment, is usually already experienced and knows, with building fabric, appraisers and so on. At the latest here it needs the help of a broker in negotiations.
Group 5 buys properties in the flow. 50 units (i.e. apartments) a quarter or even a month. Some investors buy 1,000 units directly, whether in A-location, B-location or even C-location. Properties in need of renovation, former hotels that are converted into condominiums or even forest land, agricultural land, old prefabricated buildings, etc.
Rule number 2, from group 5:
Time is (usually) more important than money
Group 4 and 5 need exclusive intermediaries, anonymous real estate sales, instead of “broad” mass and marketing, with direct line to investors, real estate funds and family offices.
