Biggest Mistakes Home Buyers & Sellers Make

Beth DeCarbo at The Wall Street Journal writes about the top five mistakes both home buyers and sellers make in today’s market… (Wall Street Journal)

First for buyers…

Location, location, location. Far too often people may fall in love with a house, and forgive it for the company it keeps. However, Dina Goldentayer, executive director of sales at Douglas Elliman Real Estate in Miami Beach., says this is a mistake. “You can change your floor plan. You can always add a bathroom. You can never change your view exposure or your placement on a street.”

HOA Q&A. If you are prepared to be told what color to paint your house, where to park your car or how often to mow your lawn then you will be fine with most HOA. However, if you are a no, any community controlled by a homeowners association you need to make sure to review the association’s regulations and restrictions thoroughly.

Read the other top 3 mistakes buyers make when buying a home.

For sellers…

Home bias. People are so in love with their own homes that they sometimes can’t its flaws. But buyers do. John Manning of Re/Max On Market in Seattle. “We’re emotional creatures. When we walk into an untidy house, we don’t see the house. We see the stuff—dirty laundry, uncleaned Kitty Litter, dishes in the sink.” This could lead to lower offers.

Capital gains. If the sellers’ home has appreciated in value, the profit could be subject to capital-gains taxes. The profit exceeded the IRS’s capital-gains exemption of $250,000 for individuals and $500,000 for married couples. With prices appreciating at record levels, more people could hit this threshold than most realize.

Read the other top 3 mistakes sellers make when selling their home.