Tips for Selling Your Home
Before you put that “For Sale” sign in your front yard, check out these tips for selling your home. They may help you get top dollar for your home and avoid common mistakes home sellers make.
Know what kind of housing market you’re in
There are two types of real estate markets: a seller’s market and a buyer’s market.
Seller’s market
In a seller’s market there are more buyers than homes for sale, which could result in more profit when your home sells. Seller’s markets normally last 15 to 16 years, according to research by the late Homer Hoyt, a prominent housing economist.
You’ll typically have plenty of offers to choose from, and won’t have to provide a lot of concessions to find a ready, willing and able buyer. The current seller’s market may taper off in 2022, and a stronger job market will help aspiring homebuyers afford continued price increases.
Buyer’s market
Buyer’s markets usually last about two to three years when the number of homes for sale is greater than the pool of buyers. In this type of market, buyers can demand more repairs and upgrades, and ask the seller to pay closing costs if they’re taking out a mortgage. Sellers need to do more to attract buyers and may have to settle for a lower price or wait longer to find a buyer.
Know where you’re going after you sell
This might seem obvious, but it’s important to have a rough plan for where you’ll live after your home sells, especially if you’re planning to use the money from your home sale to buy another home. Timing the purchase of a new home with the sale of an old one can be tricky, so be sure you have a plan that includes:
- Temporary housing if your current home sells before your new home purchase is completed
- Bridge or piggyback financing if your new home doesn’t sell before your new home purchase closes
- Paying rent to the buyer of your home for a set time
Get your home ready to sell
Even in a seller’s market, your home is often competing against other homes staged as if they were just built. If you want to get the highest price possible, make sure your home is in tip-top shape for potential homebuyers by taking the following steps:
Declutter your space. Clear out as much space so prospective buyers get an idea of how they want to fill it. The home will feel smaller if it’s packed with your stuff, and knock your home out of the running.
Depersonalize your walls. That pink, blue and yellow-colored room may be jarring to a potential buyer. The same is true of sports memorabilia or any other items that might keep buyers from seeing the home as their own. Stick to neutral paint colors and wall decor throughout the house, and pack away knickknacks.
Have someone do a smell test. You may have learned to live with smells in your home, but buyers expect it to have that new-construction smell. Fresh paint, clean carpets and a dehumidifier for a musty basement may help keep homebuyers’ noses happy when they visit your home.
Maximize your curb appeal. Buyers may not even come through the door of a house with a faded paint job, dirty windows and overgrown weeds. Or if they do make an offer, it may be lower if they assume the inside of your home has been maintained as poorly as the outside.
Light up the area. Opening windows and turning on lights makes rooms seem larger, and helps buyers picture how their stuff would fit in the home if it was theirs. Burned-out light bulbs may be a red flag that the home hasn’t been taken care of.
Consider a staging service. Staging may not only help you make more money on your sale, but could even help you sell your home faster. Buyers’ agents surveyed in the National Association of Realtors’ (NAR) 2021 Profile of Home Staging said staged home prices were 1% to 5% higher, and decreased the time the house sat on the market.
Get a home inspection. A home inspection gives you a detailed look at both the seen and unseen components of your home. Besides repairing obvious things like broken door handles, stains on the carpet or nail holes in the wall, you’ll want to know if there are any looming issues with the air conditioning, water heater, roof and other working parts.
THINGS NOT TO DO
Don’t over-improve your home. Before you tackle a major kitchen or bathroom renovation, check out the latest Remodeling Cost Versus Value Report. Focus on repairing the essential day-to-day components, like water heaters and appliances.
Find the right real estate agent
The right real estate agent can help manage the complicated home-selling process, and recent data bears that out: 90% of sellers in 2020 sold their home with the help of a real estate agent, according to the 2021 NAR® Profile of Homebuyers and Sellers.
An experienced agent stays current on unique features of different neighborhoods, and often networks with other real estate agents to find qualified buyers for your home.
Real estate agents also understand the complex legal language of purchase contracts and know how to track all the moving parts involved in selling your home, including:
- Helping you set a competitive price
- Scheduling home staging and showings
- Reviewing purchase offers and making counteroffers
- Negotiating who pays for any requested repairs
- Communicating with the buyer’s agent
- Checking on timelines for home appraisals, buyer mortgage approvals and closing
THINGS NOT TO DO
Don’t hide problems with your home from your real estate agent. Most states have strict seller disclosure laws with stiff penalties for selling a home with a known defect.
Where to look for a real estate agent
According to the 2021 NAR Profile of Homebuyers and Sellers, 68% of sellers who used a real estate agent chose them based on a referral from a family member or friend in 2020. You can also interview agents that have homes listed in your area to get an idea of their experience with home sales in your neighborhood. Besides experience, make sure you are comfortable with the agent’s personality and communication skills. Selling a home can be stressful and may take months, so being comfortable with your agent’s personality is especially important.
Is ‘For Sale by Owner’ worth considering?
Some home sellers try to avoid the 5% to 6% normally paid to real estate agents to sell a home, and give the for sale by owner (FSBO) process a shot. While it may be tempting, you need to make sure you have the time to market your home properly, follow up on buyer leads and negotiate any offers in accordance with your local home-selling regulations.
The FSBO strategy didn’t pay off for sellers from June 2020 to June 2021. FSBO homes sold at a $260,000 median price compared to $318,000 for agent-assisted sales — a more than 18% difference — according to NAR data. However, profit may have not been the primary goal of these sales, considering 57% of FSBO sales were between a buyer and seller that knew each other.
Make sure your home price is right
Your home’s price tells buyers more than you might realize. Price it too high and buyers may not even bother looking at your home. Price it too low and buyers may avoid your home thinking there’s something wrong with it.
Real estate agents seem to have the experience and a pulse on local housing markets to help you set a competitive price. Homebuyers that employed a real estate agent to sell their home ended up getting a median 99% of their asking price, according to the NAR.
Your agent can prepare a comparative market analysis (CMA) that analyzes recent sales of nearby properties with features similar to yours. A “comparable” home is usually one that:
- Is located close to your home in a similar neighborhood
- Was listed or sold within the last three months
- Is roughly the same age as your home
- Has square footage equal to or close to your home
- Has similar features as yours (upgrades like countertops and flooring or a pool)
Decide on your showing plan
While open houses are making a comeback since the coronavirus pandemic, the lack of available inventory is leading buyers to online house viewings, with many preferring to tour the house through photographs and videos before scheduling an in-person showing. Buyers are most likely to find your home on the internet, so make sure your online listing shows all the bells and whistles your home offers.
Review offers carefully
Deciding on the “best” offer may not necessarily be all about price. An all-cash offer could translate to a faster closing than a financed offer, even if the buyer is preapproved for a mortgage.
However, avoid the temptation to “hold out for a higher offer” if you get a full-priced offer. Rejecting a fair offer for a counteroffer above your listing price could discourage a solid buyer, resulting in a longer wait to sell your home as you anticipate another offer.
Understand how long it can take to sell a home
If you find a cash buyer, you may be able to complete a home sale in one to two weeks. It’ll take longer to close if your buyer needs a mortgage. According to ICE Mortgage Technology’s September 2021 Origination Insight Report, it took:
- 52 days for an FHA loan to close
- 46 days for a conventional loan to close
- 53 days for a VA loan to close
The report is updated monthly, and you can find the most recent report here.