Is it your first time selling real property? Selling your home can be as emotional as the first time you bought one. If this is your first time entering the real estate market on the seller's side, I’ve got some tips for you.
It is best to ask the pros to handle a job. More specifically, partnering with a real estate agent who has experience and knowledge of both the current market trends and the neighborhood you are in is highly recommended.
A trusted agent can guide you through what repairs and upgrades you can do to your property before it even goes on the market, help you with marketing strategies that can sell your home faster at the best possible price, and be your go-between during negotiations and closing.
A lot of sellers think they’ll be able to get more profit by selling their properties themselves (FSBO–For Sale By Owner), but getting an agent not only helps you with the process, they are also connected to potential buyers ready and waiting to see your home. Plus, agent fees are usually just 5% to 6% of the selling price. A few thousand dollars could be worth it, considering the tasks and stress you would be shouldering on your own otherwise.
There are a lot of preparations you need to make before putting your home up for sale. Set aside enough time to get these things done (usually about two to three months before going up on the listing).
A pre-sale home inspection helps you identify structural and mechanical problems that might crop up during the sale. You need enough time to schedule necessary repairs.
A lot of sellers think they need to make big upgrades so that they can sell their homes at a higher price. That’s not always the case. In fact, big renovations might cost so much that you’ll only break even (or even lose profit) after the sale. Repairs are more practical and more likely to pay off. Some fresh paint, cleaning curtains, replacing door handles, cabinetry, leaky faucets, etc. are the most common repairs you might need to make.
Take away all personal belongings and throw out, give away, or sell the stuff you no longer want, need, or use. Deep cleaning is also necessary because people will come in and look at the house–dirt, dust, and grime won’t make it appealing. Depersonalizing the house and putting in the bare minimum and basic accents to decorate helps buyers imagine how they want to decorate the place if they buy it.
Storage space is one of the most important, and also often overlooked, aspects of the house that homebuyers look at. Leave half of your items in the closets and organize them neatly to give buyers an idea of how much storage space they’ll have available.
Ask your real estate agent if they know any professional home stagers that can stage your home for you. You can also DIY the staging if you’ve got an eye for aesthetics and are trying to save money. If your home furniture is still workable and in style for staging, that can save you some money as well.
According to NAR, staging the kitchen, living room, and primary bedroom has the most impact on home sales. Remodeling your kitchen is also recommended, as it tends to increase the price of your property if the kitchen is updated. Cabinetry in neutral shades, and buying one piece of fancy stainless steel appliance helps. It gives the vibe that everything in the kitchen is high-end and gives it an updated look.
Let as much natural light in as possible. Change your lampshades and increase the wattage of the bulbs in the house. A well-lit room has a positive effect on the impression buyers get when viewing the home. Plus, it is easier to take good pictures for your online marketing in well-lit rooms.
Focusing on the exterior of your home is as important as the interior. Put on a fresh coat of paint, and fix anything that needs fixing on the property’s facade. A good impression starts from the outside.
It might cost a few bucks to get a professional photographer to take photos of your home for the listing, but real pros know the right angles to show and tricks on how to make a room look bigger in the picture. Your online appeal is as important as your curb appeal.
Once the pre-sale preparations are taken care of, it is time to put your house on the market. Where you list is important too, because not all listings are made equal. Ask your real estate agent for help in listing your property.
Even if it is a strong seller’s market, don’t put up too high of an asking price. Your agent can advise you on the price points in your area (“comps”) and you can use those prices as a basis for your asking price. Try not to go too low, either. Price your home to sell, and put some room for negotiation there as well.
Always have your property available for viewing. And when buyers come, have your agent represent you. Having the owner present during the viewing can make it a bit awkward for the buyers. They find it hard to ask questions and make comments about the property when you are there.
Once your property is listed, you’ll receive some offers. If your area is a hot market, you might even get multiple offers. You have three options: to accept an offer, reject it, or give a counteroffer. If you get multiple offers, it might be tempting to just accept the highest bid, but take into account the form of payment, type of financing, down payment amount, contingency clauses stated, requests for credit or personal property, and proposed closing date in the offers.
When writing a counteroffer, have a short timeframe for buyers to respond. The usual is 48 hours.
The negotiation part is when your agent comes in handy. They can handle the negotiations on your behalf.
Both homebuyers and sellers have to shoulder closing costs. Sellers usually have to pay the agent’s commission (around 5% to 6% of the home sale price), government transfer tax, recording fees, outstanding liens, and attorney fees.
Moreover, if you agreed with the buyer to pay credits at closing for repairs or closing costs, you’ll pay those too.
You also have to prepare for taxes. The good news is that if you’ve stayed in that home for more than two years, you are exempt from taxes for up to $250,000 of profit if you are single, and $500,000 if you are married. If you sell your home for more than that, you need to report it to the IRS on your tax return as capital gains.
Once negotiations are over, it is time to close the deal, sign some papers, and hand over the keys to its new owner. Make sure to read all documents carefully before signing on the dotted line.
Organize all the documents you need for a home sale. These include your home’s original purchase contract, property survey, certificate of occupancy, certificates of compliance with local codes, mortgage documents, tax records, appraisal, homeowners' insurance, and home inspection reports (if any).
Some states require a real estate attorney during the closing. Even if they are not required, it might be worth it to hire one to protect you during a large transaction.
Having an attorney also helps in reviewing the paperwork, contracts, and other documents, and can advise you on any potential issues that may arise during the sale.
I hope these tips help you prepare to sell your home. When in doubt, call in the pros—they'll do a better job than you.