As a homeowner getting ready to sell your property, it can be tough to separate your emotional attachment to the house you made memories in from the need to help potential buyers picture themselves making the space their own.
The Guide to Selling Your Home
From the point you decide to move to the closing table, here’s what you need to know about selling your home.
Even if you’ve already gotten over the emotional hump of selling your home, the pressure to price the house correctly and attract the right buyers can be its own obstacle. You may find yourself taking a note from past generations and burying a statue of St. Joseph in the yard or scouring online listings at all hours to see how competing homes on the market are priced.
Whether you’re ready to move into a bigger house for your growing family, downsize to a smaller place or relocate to a different part of the country for work, the process of selling a house is one that requires work – maybe more work than you anticipated.
The more work you do, including finding an agent to list your home, making necessary repairs and keeping your property in pristine condition so it’s ready for potential buyers to tour on short notice, the more you’ll increase your chances of attracting serious buyers willing to pay top dollar for your house.
Here’s a breakdown of how to sell your house.
Timing Your Home Sale
The time it takes you to sell your house can vary widely based on a few factors: the current market, the condition of your home and how well you’re able to reach the right potential buyers.
Barb Pepoon, a broker with Coldwell Banker Residential Brokerage in Northbrook, Illinois, says the preparation process can be lengthy, depending on the amount of work the house needs to achieve the right price. That’s the case for one house she’s getting ready for the market. “That’s been taking about, maybe almost six weeks to get that one ready,” she says.
A house that’s ready for the market may need just a week for cleaning and photos to be taken. On the opposite end, you may need a few weeks to repaint the interior, freshen up the landscape and have a leak in the roof repaired. The time on market depends on the condition of your house, its value and the area you live in, but once you’re under contract, expect the closing date to be set for roughly a month later, giving the buyer a chance to have the house inspected and the buyer’s lender an opportunity to appraise the property and underwrite and approve the loan.
Before you list your home, consider how the total timeline can be affected by both external factors and your personal needs.
Is It a Good Time to Sell?
Many markets throughout the U.S. are experiencing inventory shortages – meaning there aren’t enough houses on the market to meet buyer demand. In places like Seattle and San Francisco, this often leads to competitive bidding wars, with multiple offers coming in at the same time and driving up prices.
But even if you don’t live in one of the hottest markets in the country, as a seller you can benefit from listing your house at the right time of year. Traditionally, spring and fall are the peak times to put your home on the market, as that’s when most buyers are looking, says Gary Malin, president of Citi Habitats, a real estate brokerage in New York City.
Summer sees fewer buyers because they’re on vacation, and in winter people get tied up with the holidays, then opt to stay inside because it’s cold out in most of the country.
But that doesn’t mean there aren’t buyers during the off-season. You may even find that those fewer buyers touring homes in the dead of winter are more serious about putting an offer in when they find a house they like.
While there may be popular times to sell a house during the year, don’t stress if you need to list your home in the middle of July or the start of November. “In the end, you can never perfectly time a market and circumstances – your situation – they dictate that you need to put your home on the market now for whatever your reasons are,” Malin says. “So, ideally spring and fall would be helpful, but if not, I wouldn’t worry about it so much.”
Is It a Good Time for You to Sell?
Your ability to prepare your house for the market and move when it sells is also a determining factor. Many parents wait until school is out to avoid forcing their kids to change schools in the middle of the year or to make it easier to pack everything up to move a few streets over.
You may also need to move sooner rather than later. For example, if you’re being transferred to a new state for work, listing your home shortly after you get the news can free up the equity in your home to make it easier to buy a house in your next hometown.
Once you’ve listed, you also need to be willing and able to move. If you live in a popular neighborhood where houses sell fast, don’t view listing your home as a six-month process.
“What happens if this house sells quickly – [ask yourself], ‘What position am I in to make this happen?’” Malin says.
Preparing Your Home for Sale
There’s more to preparing to sell your home than simply declaring that you’re ready to move. Here’s what you need to do before your house goes on the market.
Choose a listing agent. Treat your real estate agent selection process like you would any job interview: Make sure the person or team you work with is the right fit not only for your house, but also for you in terms of communication, temperament and availability.
Get referrals from friends or neighbors, interview more than one agent and pay attention to the agent’s knowledge of the immediate area, responsiveness and how he or she plans to market your property.
“How many homes have they sold – specifically how many in that area that that homeowner lives in – and what do they know about that area,” Morales says. “What’s the employment like, amenities, what’s the plan for development? [Knowledge of] infrastructure is important.”
You do have the option to forego a listing agent and market your home as for sale by owner. But the nuances of a real estate transaction can make a FSBO property less appealing to many buyers and their agents. “You need to be willing to commit the time, the effort, the attention and the resources to it,” Malin says. “And you need to understand market value, and you need to put all your ducks in a row and need to be committed to it.”
Make necessary repairs and updates. Early on, an experienced real estate professional will take a close look at your home and point out minor fixes you can make to keep potential buyers from getting hung up on a dent in the wall or a broken cabinet door. You may also benefit from small renovations, such as refinished floors or new paint on the walls, that can keep buyers from viewing your home as dated.
But make sure you’re not casting a blind eye to the way the front of your house looks. Morales says she tells her clients to start entering their homes through the front door: “A lot of us enter our house through the garage, and we don’t know how bad sometimes that front door and the mulch, and so forth, looks as a first impression.”
If you don’t have the money or the time to make the necessary repairs or updates, there’s always the option to list your home for sale “as is,” meaning the buyer can expect to take on any necessary repairs, renovations or maintenance tasks.
But be aware that a home listed as is will see the difference in the sale price – if a buyer knows she’ll need to replace the water heater and roof and repair an aging deck, don’t expect to get the same amount of money your neighbor did for a move-in ready property.
With sea-level rise accelerating, waterfront real estate values could be revalued sooner than you think.
Determine the asking price. With updates and fixes made – or not – you and your real estate agent can more specifically address the asking price for the property. Rather than what you think the house is worth or what an online calculator like Zillow’s Zestimate guesses, the asking price should be based on what similar houses nearby have recently sold for and what makes your home stand out compared to them.
“If you’re under time constraints, the thing that’s going to make the house sell is a proper price,” Malin says.
Stage your home. A final step before making your home visible to the public is staging the property. This process may involve moving your own furniture to storage and renting simpler pieces, or it may simply mean moving a few chairs around and decluttering.
The point of staging your home is to help the key rooms – kitchen, living room, master bedroom and master bathroom – appeal to as many potential buyers as possible, rather than reflect your own style.
“You want people, when they walk into your house, to envision themselves living there, not envision you living there,” Malin says. That means removing family photos, keeping counters clear and making sure each room is easy to navigate through without having to dodge furniture.
Putting Your Home on the Market
Marketing your house online. The first place most potential buyers and their agents will see your home for sale is online. Agents will post the property information and photos on the local multiple listing service, which is accessible to real estate professionals.
You’ll also likely see your house appear on consumer-facing sites such as Zillow, Trulia, Redfin and realtor.com, which are either posted by your agent individually or pulled from the MLS.
A key part of online marketing is making the house stand out compared to the dozens of others for sale nearby, so avoid overused words like cozy and updated, and aim to highlight unique aspects of the house or neighborhood that will actually draw people to your property.
Instead of thinking of new granite countertops and a soaking tub in the master bathroom as luxurious features, Huffstickler says people looking for the high-end lifestyle want to hear about the amenities available to them, like a clubhouse for the neighborhood or concierge services in a condo building.
Holding an open house. If you market your home well, your online info will attract prospective buyers, but they’ll also need opportunities to see it. A traditional open house can be an excellent way to get people in the door and talking about your property, even if they’re not serious buyers quite yet.
“It’s really important to not only have open houses to the public, but open houses to the brokerage community,” Malin says. A broker’s open house brings agents to the house to discuss the price, view the home and think about clients who would be interested in it.
Keeping your home ready for tours. An open house isn’t the only time you’ll be getting would-be buyers touring your house, which means you have to keep the place pristine while it’s on the market.
Even before your first open house, Pepoon says you might find buyers chomping at the bit to see the property. “Most of the best buyers don’t wait for a Sunday open house to see it,” Pepoon says.
As soon as your house is on the market, never leave home without tidying up – clear the floor of laundry, make the beds, vacuum daily and keep the sink clear of dishes.
You may get an offer on the home’s first day on the market or it may take a couple months to find the right buyer, but once you do, the sale process will feel like it’s moving even faster.
How to handle multiple offers on your property. If your house’s price range is in high demand or your neighborhood is particularly popular, you may receive multiple offers. Be sure to consider all aspects of each offer, not just whichever bid has the highest price.
A cash offer over one with financing, even if the price is lower, might be the best option because it can make closing much easier. You won’t have to wait for a lender to approve of the agreed-upon price, the deal is less likely to fall through as a result of a financing issue and the closing date can be set for just a few days in advance if desired.
If you need to remain in the home until a certain date, another buyer may offer to close before you move out and lease the house back to you for the needed period of time. Another might be willing to waive the inspection or have preapproval for a mortgage versus only prequalification.
How to negotiate an offer. An offer you receive may have aspects that make you hopeful the buyers are serious, but you can also negotiate to help the deal work in your favor.
A counteroffer isn’t always about the sale price, and can also include taking on closing costs for the other party, making some repairs or adhering to other needs of the buyer. Don’t drag out negotiations too long, as you could scare away the buyer, but most parties involved are open to some tweaking to make a deal work.
While your home is no longer actively for sale, don’t think that means you can start neglecting it. Malin recommends keeping the property in the same state because the buyer will likely attend the inspection as well, and you don’t want him to start feeling buyer’s remorse.
Also, keep in mind that the buyer is planning to make the home his own, so don’t be offended by plans for renovations or a fresh interior design.
“They might want to bring a decorator in, they might want to bring a contractor in, they might want to bring a landscaper in,” Malin says. “You should try to be accommodating just to make everything go smoothly.”
What to know for closing. Typically the day of closing or the day before, the buyer and agent will do a final walk-through of the vacant house to ensure the fixtures and shelves that are supposed to remain are there, there’s no debris and there is no surprise damage. You’ll need to sign a series of documents including the deed and others regarding the transfer of ownership of the property, but in many cases the seller does not have to physically be at the table on the closing date. Malin recommends letting your real estate attorney take the lead during the closing process and being available as needed.
From start to end, you will need to spend money to successfully sell your home. Whether it’s the cost to rent furniture for staging, steam clean the carpet, replace broken cabinet doors or pay the brokers’ commission, you’ll need to be financially prepared to pay up throughout the listing period and transaction.
Here are some costs you may be expected to cover leading up to the sale of your home:
- Repairs on the home prior to listing
- Minor updates
- Professional cleaning
- Professional photos for marketing
- Repairs following inspection
- Fee for your attorney
- Commission for both listing and buyer agents – typically between 4 and 6 percent of the sale price
- Possible early payoff fee to your lender
- Portion of buyer’s closing costs if part of contract to purchase
- Transfer tax
The total cost varies greatly depending on where you live, the house you have, activity on the market and how much money you’re able to put in toward a successful sale. Zillow reported in March 2018 that the average homeowner pays $18,342 in hidden costs, primarily made up of agent commissions, followed by the cost to prep the home and transfer taxes.
One major benefit of selling your home: You most likely won’t have to pay taxes on the profits. The capital gains exclusion rule allows people who have sold their home to profit up to $250,000 individually, or $500,000 filing together as a married couple, without paying taxes, as long as they used the property as a primary residence for at least two of the last five years.