Home Selling Guide
If you are thinking of selling your home, you are not alone. In 2019, around 5.3 million homes were sold in the US. While selling a home is a common occurrence, it is also a fairly detailed transaction, and the right approach can help you optimize your selling price and the terms of the sale.
Deciding to Sell your Home
People list their homes for sale for many reasons. They may be moving for a job, needing a larger home, having trouble affording their home, or a multitude of other functional and personal reasons. Consider the following factors as you navigate your selling decision:
Local Housing Market Details
The housing market in the US is highly changeable, and you can glean a lot of valuable insights from watching your local real estate market. These insights can help you see when the best time to sell would be. It can also highlight what home features are particularly sought after, such as central AC in a region that gets very hot, or a large fenced yard in a family-friendly neighborhood. If certain home features are hard to come by in your area, such as gas heat or an attached garage, having these features can give you more power to price your property higher.
Specific metrics to pay attention to include:
- Average number of days on the market – this will signify how fast homes sell in your area
- Average price per square foot
- Whether price reductions are common occurrences
Your Financial Position
It is important to know how strong of a financial position you are in as it relates to your home. How much equity do you have in the property? How much do you still owe the bank? What are your totals assets versus your liabilities? Answering these questions can help you determine how much room you have to work with when it comes to your sale price. If you owe more on the loan than the property is worth in the current market, you are at a highly unfavorable position and may want to wait to sell until the real estate market recovers.
Your Future Residence Plans
Consider what your plan is for after the sale. Do you need to purchase another home? If so, you may choose to list your home for sale with the contingency that you must find an acceptable residence to purchase in order for the sale to finalize. Homes with contingencies can be harder to sell, so if you are looking to buy in a market with a rich inventory of homes, you could opt to take your chances. If you are looking to rent or have a property into which you plan to move, this consideration becomes a non-factor.
Steps to Take when you are Ready to Sell
Once you have made a decision to list your home for sale, there are a number of steps you should take to get the process started:
- Step 1Reach out to real estate agents in your area and set up appointments with a few to come out and see your property.
- Step 2Gather the necessary paperwork about your property, such as:
- A copy of you deed
- Paperwork from when you bought the home (this should include your inspection report)
- Your mortgage documents
- Your tax statements
- Your home insurance information
- Step 3Meet with the agents and review any documentation they have – this might include references, records of recent sales they have made, and a market analysis of your property that suggests what a good selling price could be.
- Step 4Decide on one agent and sign a listing agreement with them. This agreement will bind you to working only with them for a period of time – usually 90 days, and specify the commission rate they will receive upon the sale of the house. Commission rates usually range between 3% and 6%.
- Step 5Decide with the help of your agent how to price the house. Here are metrics you will want to consider:
- The recent selling prices of similar properties in your area.
- Your town’s appraisal of your property.
- The level of buyer demand versus available housing inventory in your area.
- How quickly you need to sell.
- Step 6Allow your agent to take photos of your house and advise you about quick improvements that could help you sell, such as staging or landscaping.
- Step 7Your agent will post your property details and photos on broker databases and start advertising it. Advertising usually includes a sign in front of the house, newspaper or online ads, and social media ads.
- Step 8Allow your agent to show the home at open houses, and scheduled showing appointments. You will need to leave your home during these times, and it is ideal if your home is clean and orderly during showings.
- Step 9Consider offers that come in and communicate with your realtor during negotiations.
- Step 10Accept an offer that meets your needs. Consider the price offered, as well as the terms of the sale, such as whether it involves financing or is a cash offer.
- Step 11Review the results of the home inspection that is conducted on your property. Your buyer may ask you to make some additional fixes or provide a discount to cover any repairs that are recommended by the inspector.
- Step 12Sign the purchase and sale agreement – your realtor and closing attorney can help you navigate this step.
- Step 13Attend your closing and sign the appropriate documentation to finalize the sale.
Additional Selling Steps
In some cases, you may need to consider additional items in the process of selling your home:
- Step 1Lowering the price: If your home does not get a lot of action for over 60 days, your realtor may advise you to lower your price. Consider this carefully – it looks very bad to have a property sit on the market for a long time, and this could hurt your long-term potential of selling your home.
- Step 2Serious Issues Uncovered During Inspection: In most cases, inspections shine a light on minor issues that can be fixed quickly and easily, and without too much of an expense. Occasionally, they can uncover issues that could serve as deal breakers. These could include mold, insect infestations, foundation cracks, and others. It could be that the cost of repairing these, or the time it requires, makes the deal fall apart and forces the seller to take care of the issue before the home can be sold. Another option in these scenarios could be to drastically lower the price so the buyer can make the necessary repairs.
Selling a home is fairly complex as a process, but with the right help, you can achieve your goals around the sale of your home. You could secure a strong profit, pay off your loan, and enjoy the excitement of moving into a new home. Be patient as you go through the necessary steps, and keep in mind that millions of Americans successfully sell their homes every year.