How to Sell a House
02/09/2018 Kristin Demshki
There are many specific tasks to complete as you prepare to sell your home, but a successful transaction starts with looking at the big picture. Before you take a single interior photo or begin painting your trim, it’s imperative to take a moment and assess your situation properly. Are you emotionally ready to sell your home? Will you use a real estate agent? Is it a good time for you to sell? Let’s examine the factors that go into answering these questions.
Am I Ready to Sell My House?
Whether you are sad to leave behind a family home full of memories, or can’t wait to get out and into your new upgrade, selling a home can often be an emotionally charged process. There are many considerations to take into account before you decide to sell, which should be done as dispassionately as possible.
Once you’re confident you truly want to sell your house, it’s still important to not be overly-swayed by the attachment to your home during the selling process. Homeowners should try to contain their emotions as much as possible and treat the process like any other business transaction in order to ensure a smooth and timely sale.
An important way to minimize your feelings as a factor in preparing to sell a home is by trying to see things from a prospective buyer’s point of view:
- What kind of person is most likely to buy your home?
- How can I make my home more desirable to them?
- What are their long term goals and concerns?
Aligning your home with their needs can help your home sell quickly and for a great price. But remember that other people don’t have the same attachment to the property as you do, so a fair market price may be lower than your perceived value of the house.
Timing is another factor to consider in order to sell your home successfully and for the most return. If possible, it is beneficial to list your home during the optimal times of year. Spring and summer are typically the best times to list, but the optimal selling season ultimately depends on your specific housing market. For example, communities popular with retirees in warm states like Florida or Arizona may see more action in the winter. A real estate agent can help you determine your area’s prime selling period, or you can do the research yourself. The same goes for conducting the sales process itself.
Real Estate Agents vs For Sale By Owner: Which Is Better?
If you have a timing plan and are ready to get your home on the market, one of the first decisions you need to make is whether to go it alone, or use a real estate agent. Both methods have their own pros and cons; let’s examine each option.
Using a Real Estate Agent to Sell Your Home
Real estate agents take a commission, usually 5 to 6% of the sale price of your home. The right agent will help you with everything from setting your selling price to negotiating with interested buyers. They are also there for you as a resource if any issues or questions arise during the selling process. They understand all of the required paperwork, and typically have contacts and other resources that can help you solve nearly any potential problems.
Working with a real estate agent can also help you through the home sale process in less concrete ways as well. They can provide a buffer between you and potential buyers, and save you time by helping with showings, and ensuring that you only talk with well-qualified buyers.
Selling Your House on Your Own Without a Real Estate Agent
Real estate agents can be extremely helpful but it is also possible to sell your home on your own, a process commonly known as “for sale by owner.” In order to sell your home yourself, you will need to:
- Do your own research in order to come up with a suitable selling price.
- Do your own marketing, including getting your home on the Multiple Listing Service (MLS).
- Show the house and interact with prospective buyers on your own.
- Negotiate the sale with the homebuyers and or the buyer's real estate agent.
- Ensure you have the proper documentation and that you adhere to all of the relevant laws and regulations.
If you are not going to use a real estate agent, it’s still wise to consider hiring some help in the form of a real estate attorney to make sure that the transaction goes smoothly, including setting up a real estate escrow account. If you are wondering why anyone would ever attempt to sell their home alone, consider that fact that selling a home yourself can save you thousands, even with the attorney fees and the real estate agent commissions included.
A Checklist for Selling Your Home
Now that you have determined which method you want to use to sell your home, it’s time to get to work. A smooth, successful home sale can be influenced by many factors, some large and some small. Fortunately, you can do many improvements yourself, with time and sweat being your biggest investments. Here are the steps you need to consider in order to get ready to sell your home.
Interior Updates and Curb Appeal Improvements
On the interior of your home, consider painting walls in contemporary, neutral colors and upgrading the lighting, even with small investments like additional lamps or upgraded light bulbs.
“Curb appeal” refers to the first impression buyers get of your home. Inexpensive exterior tasks such as pressure washing, painting trim, and small landscaping updates can make a big improvement in your home’s curb appeal and in a potential buyer’s willingness to engage and negotiate.
Clean and Stage Your Home
Thoroughly clean your home! A muddy hall, a messy man cave, or a dusty bedroom will only reduce its appeal. Keep rooms as orderly and as uncluttered as possible for all showing appointments. Use a storage unit to temporarily house extra or unsightly items if necessary—that old recliner may be quite comfy, but it could be a ratty eyesore as well. And don’t be afraid to ask a stylish friend or hire a professional to help you with organizing or decor. A second set of eyes is always helpful.
Provide Numerous High-Quality Photos
The right photos can make or break your listing. Most agents work with professional photographers, or you can hire one on your own. Ask a friend or neighbor for objective input when selecting pictures and don’t be afraid to speak up if you don’t like the photos used in your listing.
Set a Realistic Price
Setting a price for the home you are selling involves getting input from numerous sources. Start by checking area comps, or comparable sales, and get price suggestions from a couple of real estate agents. Consider all of these numbers, and add in the factors that make your home unique—in both positive and negative ways. Don't use a property tax assessment since that figure is typically much lower than the current market price.
Still not sure how to price your home? Appraisals will determine how much money a lender will lend, so you should get a professional appraisal before listing your home. Appraisals are not inexpensive, but in certain markets and situations they could save you a lot of time, and that easily translates into saved money.
Create a Plan to Accommodate Showings
It’s a bad idea to conduct ad hoc showings. For all intents and purposes, you’re putting on a sales presentation so you should want put your best foot forward. Having a plan means adequately preparing for your customers (i.e. the potential buyers), while also minimizing the chances something could go wrong during the showing. Some important points to consider when scheduling a showing:
- What amount of showing does your work schedule and family/personal life allow for?
- Do you have pets that you will need to remove from the home?
- How much lead time will you need from your agent to ensure that it is in showing-ready condition?
- If you have small children, how will you manage their needs throughout each showing?
- How will you deal with the unexpected, such as last minute viewing appointment changes, prospective buyers that show up early, or inclement weather concerns?
How to Sell Your House Fast
No one wants to have their house sit on the market forever, but if your move is being influenced by a time-sensitive factor like a job change, a family situation, or financial issues, you may need to sell your house as quickly as possible. Here are our best tips for speeding up the home sale process.
- Get your own home inspection: One part of the homebuying process that can drag on for a long time is addressing the findings of the buyer’s home inspection. Before you even list your home, you can hire an inspector yourself. Use their findings to create a to-do list, or factor the cost of any repairing any issues into your sale price. This will allow you to start one step ahead of your potential buyers’ negotiations.
- Accommodate (but also vet) potential buyers: Offer buyers whatever you can, whether it is showings on short notice or flexibility with their closing date. However, don’t act with too much in haste to sell and don’t sign contracts with unqualified buyers. Spending time in limbo with a buyer whose offer might fall through can waste valuable time and miss connections with more qualified buyers.
- Spread the word yourself: Ask for help from your friends, family, and other contacts. Share your listing on social media, carry flyers with you at all times and even consider hosting events like an open house party.
- Consider offering incentives: Paying all or part of your buyers’ closing costs, a home warranty and flexibility with closing are all ways that you can attract potential buyers.
- Consult with a lender: Knowing what financing options are available to potential buyers can help you market your home. For example, are there low down payment options available? Could a buyer’s payment cost less than renting something comparable in your area?
Ensuring a Successful Home Sale
Our final, and perhaps most important, tip for selling your home is to make sure that you prepare mentally and financially for the many possible offers and issues you may encounter. What if you don’t get the price that you want? If you are trying to sell your home fast, what if it sits on the market for a long time? If you can come up with contingency plans for these worst-case scenarios, you will be ready to handle anything that you encounter in the home selling process.
Being prepared is the key to success in the home sale process, from your first showing appointment to the closing of the deal. If you need additional insights into selling your home and the home loan process, contact a licensed PennyMac Loan Officer today!