What You Need to Know About Selling Your Home
Even though you may have mixed emotions about selling your home, you’ll have to overcome all that if you’re going to do a good job of preparing it so that other potential buyers can see it as a property which will fit their lifestyle and their dreams, as opposed to your own.
Whatever the reason is that you’re relocating to some other dwelling, the work required in order to do a great job of presenting your home to potential buyers is considerable, and you have to get your head into the game, then commit yourself to making a major physical effort as well.
There may actually be some repairs necessary on the premises, as well as some upgrades that will increase its value, and these are definitely areas you should address, if you expect to receive fair market value and above, for your home.
After the physical part, you’ll also need to be heavily involved with your chosen real estate agent, to do everything possible to increase the appeal of your home on the market. Below you’ll find a good thumbnail guide that you can use, in order to address the areas that require your attention when you’re preparing to sell your home.
How long does it take to sell?
There are number of factors which influence the time it takes to actually sell your house, for instance status of the current market, your home’s physical condition, and how quickly you can reach potential buyers. The preparation process itself can be fairly lengthy, depending on just how much work will be necessary to improve your home, to the point where it’s ready to sell on the market.
If you’ve kept the house in good order, it’s possible that very little work is necessary, and you can go right to market, but if you haven’t been maintaining it regularly, you can expect weeks if not months to be added to preparation time. Once you get your home to the point where it looks presentable, and you don’t think it can be enhanced anymore without significant investment, it’s time to do a good thorough cleaning of the place, and take photos of all the key areas.
When the house hits the market, there are some additional factors which come into play, such as the neighborhood, your asking price, the availability of other homes in the area, and the demand for housing nearby.
Once you have a deal in place with potential buyers, you can tack on an additional month before closing time, while the house gets inspected, and a mortgage loan can be approved. Once you’ve resolved to sell your house, you should sit down make a time estimate of how long you think all these factors and processes will take.
Is it a seller’s market?
In a number of places throughout the country, there is actually a shortage of housing available for prospective buyers, which means it’s a seller’s market in those locations. In locations such as San Francisco and Seattle, the competition for choice housing can act actually evolve into something like a bidding war, with owners receiving multiple offers for their homes, and enjoying the luxury of being able to increase selling prices.
Admittedly, this scenario doesn’t play out all that often in the housing market, and you certainly can’t count on it when you’re ready to sell your home. However, there are some things you can do to improve your selling chances. Spring and fall are the ideal time to put your home up on the market, because those times of year are when more prospective buyers are searching for housing.
There are fewer people searching for housing in the summertime, because they prefer to use those times for vacation, while winter creates problems of its own with moving, and is generally avoided because of the long holiday season. To really cash in on the most opportune selling time, try and list your home several weeks before the arrival of springtime, for instance in late February.
This coincides with the time when many people get restless from having been cooped up all winter, and are anxious to start looking around. It’s entirely possible however, that circumstances will dictate you having to sell your home at some time other than the ideal times, but this certainly won’t mean the end of the world for your selling chances. If you do everything else right with the selling process, you’ll still probably be just fine.
Are you ready to sell and move?
It’s worth giving a little thought to the question of whether or not you are actually prepared to sell and move, because there are some circumstances which may intervene and influence that side of the selling process as well. For instance, would you be able to time the selling of your home with the period where your children finish school, and can prepare for registering at a new school in some other location?
There’s also the possibility of you or your spouse being transferred to some other location because your job requires it. When something like this happens, it may override almost all other factors, and force you to list your home immediately, because the job transfer is effective either immediately or in the very near future.
In any case, once you have your home listed, make sure that you are actually prepared to move on a moment’s notice, because it very well may happen just that way, especially if you live in a neighborhood where housing typically sells quickly.
Getting your home ready to be sold
Obviously, there’s a little more involved in getting ready to sell your home beside simply declaring that to be the case. Before you actually put your home on the market here are some of the things you need to take care of.
Choose an agent
Choosing the right real estate agent is a very important process, and you should handle it the same way you would an important job interview, i.e. by making sure that any individual or team you choose to work with, has the right temperament to represent your home to best advantage. You should also be able to communicate freely with them, and make sure they are always available to discuss any issues which might come up.
You can determine a great deal of this by consulting with friends and neighbors who may have listed with specific agents before, and when talking with candidates. Make sure they know the area very well, and have a clear idea about how they will represent your property.
You might also opt to forget about using an agent to represent your home, and do all that work yourself. However, you should be aware that some prospective homebuyers are a little uncomfortable with properties that are For Sale by Owner, so there’s a certain drawback there.
Tackle home improvements and repairs
If you have chosen a real estate agent to represent your home, it might be a good idea to have that person inspect your home, and point out areas which need attention and should be addressed before you actually list the home. A professional eye is better in this regard, because they will have an understanding of what homebuyers are looking for, and what kind of repairs they expect to see.
This might also be a good time to determine whether or not you’re going to do some enhancements like painting or flooring that will add to the house’s value. Whatever you do, don’t overlook those views which are important to homebuyers, for instance how the home looks from the street.
That’s the very first glimpse any potential buyer will have of your home, and while it won’t make a sale for you, it definitely could scuttle a sale. This is where some painting could add good value, and planting flowers, and keeping the lawn attractive could add tremendous curb appeal for prospective buyers. Most buyers will also be entering through the front door, so make sure that the entire front is very presentable and appealing.
If it would be too costly to engage in all the repairs and enhancements needed to really bring the house up to snuff, you have the option of listing the house ‘as is’, which would shift all the responsibility of those improvements to the buyer. Obviously, listing a home ‘as is’ will have a major impact on its sale price, because everything that a prospective buyer sees which requires some kind of repair or improvement, will add to the total amount of money subtracted from the sale price. They might even add in extra money on that total, because they are anticipating some unseen repairs will be necessary, as well as what is visible.
Calculate your asking price
Once you’ve addressed all the repairs and enhancements that you intend to make before listing, you’ll be able to formulate an asking price, generally in consultation with the real estate agent. The asking price should be in line with what other similar houses in the neighborhood have sold for, with any differences being added or subtracted, based on features unique to your own home.
Homes within a quarter-mile radius of your own should all be considered in terms of any recent sales, and then you can factor in what makes your own home better or worse than those others. After having formulated an asking price, you might want to consider staging the home, which means doing some preliminary de-cluttering of furniture, or even selling some prior to making your move.
If it won’t impact the appearance of your house too severely, you might even want to store much of the furniture off-site for a month or two. The whole idea behind staging the home is to help prospective buyers see the actual house itself, rather than all your furniture and what makes it your home. Selling time is the time to have prospective buyers visualize the house as their own, and removing much of your personal furniture and other items will help with that process.
Getting Your Home Listed
In a majority of cases, prospective buyers and real estate agents working on their behalf, will generally encounter your listing online before anywhere else. That makes it to your advantage to somehow cause your house listing to stand out and generate additional appeal, compared to what may be a large number of other homes in the same area.
Of course, this means using the most advantageous photos possible, but it also means writing accompanying text which avoids generalized words that appear in every other listing online. Instead, use your own words to describe the best features of the home, and what makes it unique among all others.
Words like ‘luxury’, ‘updated’, and ‘cozy’ appear in virtually every ad, so avoid using those specific words and others just like them. It might be a good idea to describe the advantages of the neighborhood itself, and the amenities available to occupants of the house nearby.
Your open house weekend
If you have prepared a good unique listing, you should have generated some considerable appeal from prospective buyers, and all that remains now is providing an opportunity for them to give it a good look. One of the best ways to accomplish this is to arrange for an open house, so that a number of buyers can all examine the premises on the same weekend.
This saves your time, and exposes the home to a number of potentially interested buyers all in a very short time frame. Keep in mind that it isn’t just potential homebuyers who attend these open house weekends, but real estate agents also do walk-throughs, in order to obtain information for their clients.
In addition to the open house weekends you schedule, you’ll have to be open to individual tours from people who have missed the open house, but have discovered your listing and are interested in viewing the home.
Once you have your home on the market, you should always keep it in a very presentable condition, because you may have to show it at a moment’s notice, and you simply won’t have time to do another major housecleaning. By the same token, if your real estate agent has arranged for a viewing, you should be prepared to leave the house very quickly, since many prospective buyers feel awkward with having the owner present.
Once Your Home has a pending sale
The uncertainties of home buying and home selling are such that you might very well receive an offer on that first open house weekend, or on the very first day that you make the home available for viewing. On the other hand, it may take several months before you even get a nibble from a prospective buyer, but once you do have a serious offer in place, things can happen very quickly indeed.
Dealing with multiple offers
Circumstances may be such that you receive multiple offers in a short period of time once your house is on the market, perhaps due to high demand in your neighborhood, or possibly a very reasonable asking price on your part. If this does turn out to be the case, you should consider the merits of each offer, rather than simply accepting the highest bidder without any further consideration.
For instance, if one prospective buyer were to offer you cash for the home, that might trump all other considerations, even if another buyer offered you significantly more for the home. The closing process will be much simpler when there’s a cash offer on the table, as opposed to when financing is necessary.
There won’t be any lost time waiting for approval from a lender, and there won’t be any possibility of the deal falling through because financing can’t be arranged at the last minute. This all works heavily to your advantage, because it can set the closing date at just a few days forward, rather than weeks or even months when financing has to be arranged.
Negotiating on offers
Sometimes you’ll receive serious offers from prospective buyers that are close to what you had in mind, but you would prefer to have a few tweaks made to the details. In situations like this, negotiating may work out in your favor, and it’s something you should give some thought to even if you don’t feel particularly adept at negotiating yourself.
Your real estate agent can act as your stand-in for such negotiations, and help to bring the deal closer to what you’d like to see. It could be that you do receive a fairly serious offer from a buyer, but they stipulate that they want you to carry out some specific repairs before they formally commit. Situations like these should be discussed quickly with your spouse and real estate agent, so that a buyer is not kept waiting, but at the same time, you should express how you genuinely feel about their offer and any stipulations.
When you’re under contract
After you have accepted an offer and any conditions have been agreed to, you can consider yourself to be under contract with a prospective homebuyer. Now you enter a due diligence period for something like 10 days after the contract signing, wherein the house will be formally inspected, and appraisers will do their thing.
At this point, your house is off the market, but that doesn’t mean you can let it slide and ignore it forevermore. You can expect that the new homebuyer will want to attend the formal inspection of the property, so you should make a point of having best foot forward on that day, and really right up until the time a new owner takes possession.
You certainly should not take any umbrage over plans that you hear of for complete renovations or total makeovers, because the home is no longer yours, so there’s no reason for you to be offended by anything that the new owner has planned.
Either one day before, or on the final day of closing, the buyer and real estate agent will probably conduct a final walk-through of your vacated home, so they can ensure that everything is still intact, and that you haven’t ravaged the place to take away features they had intended to keep.
There should be no debris or clutter laying about on this day, and certainly no unexpected damage to the premises. The closing process will require that you sign a whole slew of documents such as the deed and the transfer of ownership.
In many cases, you will not be required as seller to be physically present at the closing, but can instead sign all documents beforehand, and have them brought to the closing session. Ideally, your real estate agent or attorney should handle all that for you, without you being present, and you should just be on standby, where you can be reached by your representatives if need be.
What it costs to sell a home
Selling your home is not a cheap proposition, and from beginning to end, you can probably expect to spend a considerable amount of money in order to successfully transfer ownership to a new buyer. There are any number of expenses which can factor into the total cost, such as the cost of staging, any necessary repairs, updates that will add to your homes appeal, paying your real estate broker, and even getting the home listed.
What all this means is that you should be prepared financially to go through the process of selling your home, because if you aren’t, the entire process will almost certainly drag out and take much longer than you anticipated, and in the end, it will probably end up even costing you more.
Here is a short checklist of expenses that you can expect to run into during the process of selling your home:
- early payoff fee to your mortgage lender
- commission for your agent, which is usually about 6% of the sale price
- professional photos for marketing
- home repairs
- professional cleaning
- transfer tax
- buyer’s closing cost
- repairs after inspection
- attorney fees
- any minor updates necessary
- improvements requested by buyer
Depending on where you live in the country, the final cost of selling your home could vary tremendously, especially when you add in other factors like what kind of market activity there is in your area, and how much you’re willing to invest in upgrading the property.
At the present time, the average cost to a homeowner for all expenses associated with the sale of a home hovers in the area of $18,000, which is a very impressive figure. If it’s any consolation to you, you probably won’t have to pay the taxes on any profits made from the sale of your home.
This is because the capital gains exclusion rule allows for you to be tax-exempt when selling your home up to a sale price of $250,000 as a single, or up to $500,000 as couple. The only stipulation to this is that you must have used the home as your primary residence, for two or more years during the last five that you held ownership of the house.