Common seller mistakes to avoid (and what to do instead)

Written by Samantha SheltonNMLS 1647301Updated September 2026

This article is for informational purposes only and is not intended to provide legal, financial, or tax advice. Capital gains rules, disclosure duties and transfer tax treatment depend on your individual circumstances; consult a qualified tax professional or a licensed Michigan real estate attorney about your situation.

The costliest home seller mistakes are pricing off your loan payoff instead of the comparable sales, skipping the repairs that touch financing, treating disclosure as a marketing decision, negotiating from emotion, and budgeting only for commission. The last one is the easiest to put a figure on: a Michigan seller owes state and county real estate transfer tax of $8.60 per $1,000 of sale price, or $2,580 on a $300,000 sale, before commission, prorated taxes, payoff interest or a single buyer concession enters the math.¹

Each mistake is a place where your number and the market’s number diverge, and the market’s number wins anyway, just later. Three documents prevent nearly all of them: an analysis of closed comparable sales, a pre-listing inspection, and a written net sheet. Learn what each looks like and the fix for each, and start with our Selling A Home guide or the Selling Process hub.

Key takeaways:

• An appraiser decides the price argument, not a buyer: The lender sizes the loan against the lower of the contract price or the appraised value, and Fannie Mae expects at least 3 closed comparable sales, generally from the last 12 months.
• Disclosure is a statute, not a strategy: Michigan’s Seller Disclosure Act covers transfers of 1 to 4 residential dwelling units, and a statement delivered after a binding purchase agreement is signed gives your buyer 72 hours to terminate, or 120 hours by registered mail.
• Budget past the commission line: Michigan transfer tax alone runs $8.60 per $1,000 of sale price and recording is $30 per document, before prorated taxes, payoff interest, repairs and concessions.

The seller mistakes that cost the most, and the fix for each

Seven mistakes account for most of the money sellers leave on the table, each with one action that prevents it.

Mistake 1: Pricing from your payoff instead of the comparable sales

Overpricing is the mistake that funds all the others, and on a financed sale an appraiser settles it, not a buyer: the lender sizes the loan against the lower of the contract price or the current appraised value. A price the closed sales do not support does not become the market’s opinion because a buyer agreed to it; it becomes a financing gap someone fills in cash.

In practice the mistake is arithmetic that starts in the wrong place. Sellers build the list price out of the mortgage payoff, the moving budget and whatever the neighbor is asking. None of that is evidence. The evidence is knowable in advance: Fannie Mae requires a minimum of three closed comparable sales in the sales comparison approach, and directs that comparables closed within the last 12 months should be used. That is the file your price has to survive.

The fix: Ask for a comparative market analysis built from closed sales in a tight radius with similar square footage, then read the first two weeks of showing traffic as data, not as a verdict on your taste. Correcting early costs far less than correcting after the listing goes stale. Our guide to pricing your home in a competitive market covers setting the number, pricing for a quick sale covers correcting it, and what to do if your home doesn’t sell covers the late correction.

Mistake 2: Skipping the repairs that affect financing and the appraisal

Repairs split into two piles, and only one can end your deal. Safety, structural and systems items, meaning roof leaks, water intrusion, exposed wiring, a dead furnace, foundation movement, become leverage in an inspection report and can come back as an appraisal completed subject to repairs. Cosmetic items get negotiated, rarely walked over. The mistake is not deferring repairs; it is not knowing which pile each item is in until a buyer’s inspector tells you, at the moment you have the least leverage.

The fix: Order a pre-listing home inspection and sort the report yourself. Fix what touches safety, systems and structure, then price the rest in and disclose it. That converts a future surprise into a line item you control and gives you a written basis for negotiating repairs after a home inspection. Structural questions have their own playbook in selling a home with foundation issues.

Mistake 3: Spending on improvements the resale market never promised to repay

Know what published renovation return figures actually are before you write the check. The National Association of REALTORS publishes its Remodeling Impact Report with the National Association of the Remodeling Industry, and the 2025 edition expresses cost recovery as percentages estimated by surveyed REALTORS and NARI members, not measured resale outcomes.

Staging figures deserve the same reading. In NAR’s Profile of Home Staging, based on a February 2025 survey of its REALTOR members, 83% of buyers’ agents said staging made it easier for a buyer to visualize the property as a future home, while 26% said it affected most buyers’ view and 60% said it affected some buyers but not always. Those are agents reporting their own impressions: a reasonable argument for presentation, a poor basis for a renovation budget.

The fix: Spend on presentation, not on projects. Cleaning, decluttering, paint, light and photography are cheap, fast and reversible; a pre-sale kitchen remodel is none of those. See the NAR Profile of Home Staging, then declutter before selling and read up on staging’s effect on sale price. Weighing a real project? Renovation ideas that boost home value sorts them.

Mistake 4: Treating the disclosure statement as a marketing decision

In Michigan, disclosure is not a strategy. The Seller Disclosure Act applies to the transfer of any interest in real estate consisting of not less than 1 or more than 4 residential dwelling units.² Selling “as is” changes what you agree to repair. It does not switch off the duty to disclose what you know.

• Timing is where careful sellers get hurt: The statement must be delivered before you execute a binding purchase agreement. If a disclosure or amendment lands after that, your buyer may terminate by written notice within 72 hours of in-person delivery, or 120 hours by registered mail. A late disclosure hands a wavering buyer a clean exit.
• Known conditions are the duty: A seller is not liable for an error outside their personal knowledge, and it is not a violation to miss something discoverable only by inspecting inaccessible portions of the property or by an expert. Foundation movement you have watched for three winters is not in that category.
• Some transfers are exempt: Court-ordered and foreclosure transfers, transfers by a nonoccupant fiduciary administering an estate or trust, co-tenant and close-family transfers, and government transfers fall outside the requirements.
• Pre-1978 homes carry a separate federal duty: The federal lead-based paint rule requires you to give the buyer the EPA pamphlet Protect Your Family From Lead in Your Home, disclose known lead-based paint and hazards, hand over available records and reports, attach a Lead Warning Statement to the contract, and allow a 10-day period for a paint inspection or risk assessment.

The fix: Fill the statement out yourself, early, from what you know, and deliver it before signatures. Read the EPA’s real estate disclosure rules if your home predates 1978, and use our walkthrough of how to handle seller disclosures. Radon, mold and underground tanks are covered in selling a home with environmental issues.

Mistake 5: Negotiating from emotion instead of from a net number

Sellers who take offense at a first offer often accept less than that offer three weeks later. The renovations you loved and the years you spent here are real, and none of them appear in the closed comparable sales an appraiser will pull. Two structural facts should shape how you negotiate, and both are recent enough that many sellers work from old assumptions:

• Commission is negotiable and has no standard rate: Under the practice changes effective August 17, 2024, offers of compensation to a buyer’s broker may not be communicated through the MLS, and agents working with buyers must have a written agreement before touring homes. Ask what you are paying and what it buys before you sign a listing agreement.
• A low appraisal is a financing problem first: If the appraisal lands under the contract price, the loan is sized to the lower number, leaving a gap to close with cash or a renegotiation. That is not automatic proof your price was wrong, and it is not something your side can lobby away: federal rules bar covered persons in the transaction, including lenders, brokers and real estate agents, from attempting to influence an appraiser’s value through coercion, inducement or intimidation.

The fix: Before the first offer arrives, write down the net proceeds figure you will accept and the terms you will trade for price: closing date, occupancy after closing, a repair credit. Then judge every offer against that number, not against your feelings about the buyer. Negotiating offers as a seller covers the trade space, and selling a home with a low appraisal plus what to do if your home doesn’t appraise cover the gap.

Mistake 6: Budgeting only for commission

Sellers who plan around one number, the commission, get surprised by five others on the settlement statement. Several are set by statute and knowable to the dollar months ahead. Beyond the commission you negotiate, a Michigan seller is looking at:

• Real estate transfer tax, $8.60 per $1,000 of sale price: Michigan levies state transfer tax at $3.75 per $500 of value and county transfer tax at 55 cents per $500 in a county under 2,000,000 population. On a $300,000 sale that is $2,250 to the state and $330 to the county, $2,580 combined, and state law makes the seller or grantor liable, payable to the county treasurer within 15 days of delivery of the deed.
• Recording fees, $30 per document: A Michigan register of deeds charges $30 to enter and record a document regardless of page count.
• Mortgage payoff interest through the closing date: Your payoff is not your statement balance. It includes interest accrued to the day funds are received, which is why payoff quotes expire.
• Prorated property taxes: Michigan bills summer and winter taxes on separate cycles, so where your closing date falls decides how much of the year you carry.
• Repairs, concessions and title: Repair credits, buyer closing-cost concessions, and the owner’s title policy where custom puts it on the seller.

The fix: Ask for a written net sheet before you sign the listing agreement, and an updated one with every offer. It turns an argument about price into arithmetic about proceeds. If a buyer asks you to cover part of their costs, seller-paid closing costs explains what loan programs allow, and our closing cost guide shows the buyer’s side. First-time sellers start with tips for first-time home sellers.

Mistake 7: Ignoring the tax rules and the mortgage on the other side

The federal home sale exclusion is generous and conditional in equal measure: you may exclude up to $250,000 of gain from your income, or up to $500,000 on a joint return, if you owned the home and used it as your main home for at least 24 months out of the 5 years leading up to the date of sale.³ It is also rationed: you are not eligible if you excluded gain on another home during the two-year period before this sale. Sellers who move twice inside two years, or who converted a home to a rental and lost the use test, learn this after closing.

The other half of the mistake is treating the sale as the finish line. For most sellers the proceeds are the down payment on the next house, which makes the sale and the purchase one decision with two closings. Sequencing is the real question: sell first and rent, buy first and briefly carry two payments, or bridge the gap.

The fix: Confirm your exclusion eligibility with a tax professional, and structure your next mortgage while the home is still on the market. Start with the IRS guidance on the sale of your home and our walkthrough of capital gains tax exemptions. On the financing side, bridge loans covers buying before you sell, our guide to selling your house ties the two closings together, and buying a second home covers how underwriting changes when the next property is not a primary residence.

What Michigan sellers should know

Three Michigan rules decide money that never appears in a listing presentation, and all three are knowable before you sign anything.

• The state’s $3.75 per $500 may be refundable: If you claimed the principal residence exemption and the property’s state equalized value at sale is equal to or less than its SEV when you acquired it, and the sale was arm’s length, the state portion of the transfer tax is exempt. That is $2,250 of the $2,580 on a $300,000 sale. Ask your title company before closing, or request a refund from Treasury on Form 2796 if you already paid.
• Your tax bill is not the buyer’s tax bill: Taxable value uncaps to state equalized value the calendar year after a transfer of ownership, so a long-held home under the principal residence exemption, worth up to 18 mills of local school operating tax, can hand the next owner a much larger bill. Say so plainly rather than letting a buyer assume your numbers carry over. Our explainer on how property tax assessments work covers the mechanics.
• Disclosure has a deadline, not just a form: The written statement is due before you execute a binding purchase agreement. Deliver it late and the buyer may terminate within 72 hours of in-person delivery or 120 hours by registered mail. Build both the tax and disclosure items into the seller’s net sheet you ask for before the listing agreement.

FAQ: Common home seller mistakes

Here are answers to common questions about seller mistakes.

What is the biggest mistake home sellers make?

Overpricing. Buyers shop in price bands, so a home listed above its band is invisible to the people most likely to buy it, and stale listings attract lower offers rather than higher ones. Price from recent closed sales, not from your mortgage balance or your neighbor’s asking price. See pricing your home in a competitive market for how to build that number.

Should I make repairs before listing my home?

Make the ones that affect safety, financing or the appraisal: roof leaks, electrical hazards, furnace failures, structural movement. Skip most cosmetic upgrades, since published return percentages are professional estimates rather than measured resale outcomes. A pre-listing home inspection tells you which category each item falls into.

How do I avoid pricing my home too high?

Use closed sales, not active listings, because asking prices reflect hope rather than results. Ask for a comparative market analysis built from sales that closed in the last three to six months within a tight radius. Then watch the first two weeks of showing traffic: low traffic means the price is wrong, and correcting early costs far less than correcting late.

What do sellers forget to budget for?

Transfer taxes, recording fees, prorated property taxes, payoff interest through the closing date, pre-list repairs, buyer concessions and moving costs. In Michigan the transfer tax alone runs $8.60 per $1,000 of sale price. Together these push total costs well past the commission figure most sellers plan around, which is why a net sheet and an understanding of seller-paid closing costs belong in front of the listing agreement.

The bottom line on avoiding seller mistakes

The seller mistakes that cost real money are pricing from your payoff instead of the comparable sales, skipping repairs that touch financing, renovating for a return nobody measured, treating disclosure as a marketing decision, negotiating from emotion, budgeting only for commission, and forgetting the tax rules and the next mortgage. Michigan transfer tax alone is $8.60 per $1,000 of sale price, or $2,580 on a $300,000 sale, and the appraiser deciding your price argument works from at least three closed comparable sales from the last 12 months. Three documents prevent nearly all of it: a comparative market analysis, a pre-listing inspection, and a written net sheet.

If you’re ready to sell and buy again, talk to Align Lending. We’ll shop your next mortgage across our lender network, show you the offers side by side, and tell you what your proceeds actually support. Call 248-506-5727 or start online today.

Footnotes:

1. Example figures in this article are hypothetical and for educational purposes only; they do not constitute an advertisement of credit terms or a rate quote under federal or state lending laws. Your actual selling costs depend on your sale price, county, closing date, loan payoff, negotiated commission and contract terms, and will be itemized on your settlement statement. Return to text.

2. Descriptions of the Michigan Seller Disclosure Act and of federal lead-based paint disclosure requirements are provided for general information only and are not legal advice. Statutory requirements, exemptions and deadlines change and apply differently to individual transactions; consult a qualified Michigan real estate attorney about your situation. Return to text.

3. This is general information, not tax advice. Eligibility for the exclusion of gain on the sale of a main home depends on your individual circumstances, including ownership, use, filing status, prior exclusions, periods of non-qualified use and any depreciation claimed. Consult a qualified tax professional about your situation. Return to text.

Sources: Property value used for the loan-to-value ratio on a purchase money transaction is the lower of the sales price or the current appraised value, Fannie Mae Selling Guide B2-1.2-01. Minimum of three closed comparable sales in the sales comparison approach and the expectation that comparable sales closed within the last 12 months be used, Fannie Mae Selling Guide B4-1.3-08. Michigan Seller Disclosure Act, 1993 PA 92: applicability to transfers of not less than 1 or more than 4 residential dwelling units, MCL 565.952; exempt transfers including court-ordered transfers, foreclosure sales, nonoccupant fiduciary transfers, co-tenant transfers, specified family transfers and transfers to or from a governmental entity, MCL 565.953; delivery before execution of a binding purchase agreement and the 72-hour and 120-hour termination rights for late delivery, MCL 565.954; limits on transferor liability for information outside personal knowledge or discoverable only through inaccessible portions or expert knowledge, MCL 565.955. Federal lead-based paint disclosure for target housing built before 1978, including the Protect Your Family From Lead in Your Home pamphlet, disclosure of known lead-based paint and hazards, available records and reports, the Lead Warning Statement, and the 10-day inspection or risk assessment period adjustable by mutual written agreement, Section 1018 of Title X (Residential Lead-Based Paint Hazard Reduction Act of 1992, 42 U.S.C. 4852d) and the U.S. Environmental Protection Agency. Exclusion of up to $250,000 of gain, or up to $500,000 on a joint return, the ownership and use test of at least 24 months out of the 5 years leading up to the date of sale, and ineligibility where gain was excluded on another home during the two-year period before the sale, Internal Revenue Service, Topic No. 701, Sale of Your Home. Practice changes effective August 17, 2024, prohibiting offers of compensation from being communicated through an MLS and requiring written agreements with buyers before touring homes, National Association of REALTORS settlement FAQs. Prohibition on covered persons, including creditors, mortgage brokers, appraisers, appraisal management companies and real estate agents, causing or attempting to cause the value assigned to a consumer’s principal dwelling to be based on any factor other than the independent judgment of the person preparing the valuation, through coercion, extortion, inducement, bribery or intimidation, 12 CFR § 1026.42(b)(1) and (c)(1). Cost recovery percentages reported as estimates by surveyed REALTORS and National Association of the Remodeling Industry members, NAR and NARI, 2025 Remodeling Impact Report. Staging figures of 83%, 60% and 26%, drawn from a February 2025 survey of REALTOR members and reflecting surveyed agents’ impressions rather than measured sale outcomes, National Association of REALTORS, Profile of Home Staging. Michigan state real estate transfer tax of $3.75 per $500 of value, MCL 207.525; Michigan county real estate transfer tax of 55 cents per $500 in a county with a population of less than 2,000,000, MCL 207.504; seller or grantor liability and payment to the county treasurer within 15 days of delivery of the instrument, MCL 207.523. Register of deeds fee of $30 for entering and recording a document regardless of the number of pages, and $3 for each additional instrument assigned or discharged, MCL 600.2567. State real estate transfer tax exemption for a principal residence claimed under MCL 211.7cc where the state equalized valuation at sale is equal to or less than the state equalized valuation at acquisition and the transaction was at arm’s length, MCL 207.526(u), with refund requests made on Michigan Department of Treasury Form 2796. Taxable value uncapping to state equalized valuation in the calendar year following a transfer of ownership, MCL 211.27a(3). Principal residence exemption from local school operating tax, MCL 211.7cc(1), to the extent of the not-more-than-18-mill levy authorized by MCL 380.1211(1).

This article is for informational purposes only and is not intended to provide legal, financial, or tax advice. Selling costs, transfer taxes, recording fees, disclosure obligations and tax rules change and vary by property, county and transaction; confirm your figures on your settlement statement and consult a qualified professional about your situation. Figures shown are illustrative, are not a rate quote or an offer of credit, and are subject to change. Align Lending is an independent Michigan mortgage broker, NMLS #2041154, and does not list homes for sale.

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