Most home sellers dream of a stress-free sale where they simply list their house on the market, quickly find a qualified buyer, collect the cash, and hand over the keys. In reality, the process of selling a house ? especially if you?ve never done it before ? can be complicated, time-consuming, and emotional. Much like buying a first house or investment property, it?s easy for a first-time home seller to make mistakes. With a little know-how, however, you can avoid many pitfalls and win over buyers. This step-by-step guide for home sellers is designed to help you achieve just that. Keep reading as we break down the essential steps of the home selling process and provide more tips on how to sell your house quickly, for the highest price, and without losing your mind!
Step 1: Decide How You?re Going to Sell
Choosing how you?re going to sell dictates every other aspect of the process, from the marketing strategy to the cost of selling the home. In the digital age, sellers no longer need to list their homes with real estate agents and can opt to sell on their own. Still, it?s important to weigh the pros and cons to determine the best option for you.
#1. Real Estate Agent/Realtor
If this is your first time selling a property, the best thing to do is work with a real estate listing agent (or a realtor). A good agent will guide you through the home selling process and increase your odds of a quick sale. Agents will also help in most of the upcoming steps of selling real estate properties like marketing, setting a competitive price, communicating with the buyer?s agent, negotiating offers, preparing paperwork, etc.
For assisting you with the home sale, a listing agent will typically charge a commission of 5?6% of the sale price of your home (fee varies by location) which then gets split with the buyer?s agent. This is why some homeowners are tempted to avoid hiring a real estate agent and, instead, sell their home themselves to save on paying the commission. However, it?s probably ill-advised to try selling your home on your own, especially if you haven?t done it before.
Besides, a great agent will more than make up for the cost and help you get the most money for your home. So, don?t hire just any agent, but look for someone who?s a professional and has a track record of sales that proves they know how to sell your house fast. You can simply look up an agent?s sales history and learn more about them online. For example, you can find top performing agents in your city on Mashvisor?s Agent Directory. Interview several agents to ensure you?ve found the right one for you, your home, and your neighborhood.
#2. For Sale by Owner
As mentioned, you do have the option of selling your home on your own. This option (often called FSBO) is good for those who have experience in buying and selling properties, such as real estate investors, and are looking to save money and make a higher profit. However, the process of selling a house by owner can be overwhelming for first-time home sellers as they?ll be responsible for managing all aspects of the sale.
For example, you?ll have to handle tasks like list the property online, write a real estate listing description, schedule showings, etc. It?s also essential that you have sufficient knowledge of the local real estate market to accurately price the home. Therefore, while a for sale by owner can save money, it requires more time and effort on your part. For many property owners, saving money on the agent?s commission isn?t worth the extra effort of handling all aspects of for sale by owner transactions.
If you?re still interested in this option, read: How to Successfully Sell FSBO Homes: A Step-By-Step Guide.
Step 2: Get a Professional Home Inspection
Most home buyers know that it?s important to get a home inspection before making an offer. But did you know that?s it equally (if not more) important for sellers too? It?s true ? while a pre-sale inspection might cost a few hundred dollars, this is money well spent because it can help avoid costly surprises once the home is under contract. Furthermore, many states have disclosure rules, meaning you?ll have to disclose known problems about your home if buyers ask directly.
The only way for you to be aware of any problems is by having the house inspected. So, if you?re working with a real estate agent, request getting a pre-inspection before putting your home on the market. If you?re selling as FSBO, you?ll have to look for and contact a house inspector in your area. At the end of the inspection, you?ll get a detailed report about the property?s condition and any problem areas with recommendations for maintenance and repairs.
Another reason to have an inspection before selling a property is that it gives you the chance to make any necessary repairs before buyers walk through the door. Buyers will do their own home inspections later on in the process anyway. If they find any major problems, they?ll either demand big bucks during the negotiation phase or simply walk away from the sale. So, having an inspection will alert you in advance of any issues so you can fix them and have the house ready to sell by the time it hits the market. Meaning, you?ll be a few steps ahead of the buyer and have the ability to speed up the selling process!
Step 3: Make Repairs and Small Upgrades
Many real estate transactions can drag on when buyers and sellers are negotiating repairs. If you discover any problem with the property after the inspection, don?t try and hide it ? after all, it?ll be uncovered during the buyer?s inspection. Home sellers have to either fix the issue ahead of time, price the property below market value to account for the problem, or list the property at a normal price but offer the buyer a credit to fix the problem. If you want to sell your home fast, the best thing to do is to address and fix the problem yourself before listing the house for sale. This will increase the value of your home and attract more buyers as, typically, people prefer buying ready-to-move-in homes.
However, it?s important that you don?t go overboard with repairs. Instead, focus on small upgrades that leave buyers with a great first impression. In addition, updates to kitchens and bathrooms are where you?d generally see the highest return on investment. So, make sure to handle critical issues like a cracked ceiling, damaged roof, or an outdated HVAC system first. Then, make a list of things in your home that could use a little polish or need replacing. For example, a fresh coat of paint, new carpet, light fixtures, and a spruced-up landscape are low-cost ways to transform your space.
This is where a good real estate agent can help. Agents know what buyers in the local real estate market are looking for in a house and can help you plan upgrades accordingly. So, consult with your agent before you invest time and money on needless projects. For more ideas of upgrades that?ll increase the value of your investment property when it?s time to sell, read: Property Renovation 101: What Improvements to Make for High ROI.
Step 4: Determine Your Asking Price
Whether you?re looking for how to sell a house with a realtor or on your own, setting the right asking price is key. Pricing too high can backfire and cause the house to sit on the market for a long time and force you to sell for less. Alternatively, underestimating the property?s value might cause you to leave money on the table. To avoid these scenarios, it?s vital to price your house right from the start. This requires a balance between personal expectations and market conditions. Meaning, you need to think objectively about your home?s value.
If you?ve have lived in your home long enough to make memories, those sentimental ties will most likely cloud your judgment. To sell fast and make profits, you need to stick to the facts as much as possible when you estimate your asking price. Thus, the best thing to do is to run a comparative market analysis (CMA). Buyers will do this to determine a fair offering price, so sellers should also do this to determine a fair asking price and be one step ahead of them.
If you?re working with an agent, he/she will run a CMA and give you the final report for free. But if you?re selling your house on your own, here?s a quick breakdown of the comparative market analysis. Basically, what you need to do is find houses in your neighborhood that are similar in size, features, are currently on the market, or have recently been sold. These are known as real estate comps (or comparable properties), and by viewing how much are they selling for, you can accurately predict what buyers will pay for your home and set an asking price accordingly.
If you?re not using an agent, check real estate listing websites and online tools to get an estimation of how similar properties in the area are priced. Mashvisor, for example, uses both historical and predictive data to analyze investment properties in your city and neighborhood of choice. Based on these analytics, you can easily find comparable properties along with their information in a matter of minutes. This will help you find the right asking price for your home to attract a wide pool of buyers from the start!
To learn more about Mashvisor and how we?ll help you make faster and smarter real estate investment decisions, click here.
Step 5: Clean and Stage the House for Sale
Once repairs are done and your home is in good working order, it?s time to show off its best features. That starts with deep cleaning. Buyers will examine every room, surface, and shelf with a magnifying glass, so you need to prepare for their judgment. Plus, at this step, you need to stop thinking of the house as yours and start looking at it from a visitor?s perspective. Decluttering, cleaning thoroughly, and getting rid of any odors will make the real estate property feel welcoming, spacious, and ready for new owners. If you can afford to, consider hiring a professional home cleaning service.
Once you have a clean home, you can begin to stage. The goal of home staging is to make it easier for potential buyers to see themselves in your home, rather than seeing signs of your personality everywhere. Doing this can decrease your time on the market and help sell your home for more money. The key rooms to stage in a house for sale are the kitchen, living room, master bedroom, and master bathroom. You can hire a stager who?ll bring in furniture and design pieces. This is especially important if you?ve already moved out as an empty house is more difficult to sell.
Sellers who do not clean and stage their homes are throwing money down the drain. Remember, the goal in this step is to create an inviting space that lets buyers see your house as theirs. So, failing to do this will not only reduce your sale price but may also prevent you from getting a sale at all. With guidance from your real estate agent, cleaning and staging don?t have to cost a fortune. Plus, this will also get your home picture-perfect so your photographer can capture it in the best possible condition for the listing.
Step 6: Gather Information & Draft Your Listing
Moving forward to the next step of how to sell a house is to prepare your property listing. Important information that you need to gather to create a real estate listing includes simple data and facts about the home. This includes quantitative information such as year built, finished interior square footage, lot size, number of bedrooms and bathrooms, and asking price. Other details to mention include the neighborhood and address, heating and cooling configuration, and any parking arrangements.
Next up is photos. Today?s buyers start their property search online and pictures are the first thing that attracts their eyes on search result pages. As a result, when listing a property for sale online, photos can determine whether someone will call and make an appointment, or click on the next property listing. This is why real estate agents recommend hiring a professional who specializes in real estate photography to take high-quality photos for your listing. It?s recommended that you have at least one shot of every room and hallway, plus multiple exterior photos.
Pro Tip: On top of images, consider paying for drone videos or 3-D virtual tours to give potential buyers a realistic feel for the property and a stronger first impression.
And of course, no listing is complete or has a chance of attracting potential buyers without a description. While amazing photos draw buyers in, your real estate listing description should give emphasis to your home?s selling points. A real estate agent will help in writing a creative description that convinces buyers that your house is the most desirable choice. One tip to make your property stand out from the competition is to avoid overused words in your listing description like cozy and update. Instead, aim to highlight unique aspects of the house or neighborhood that will actually draw people to your property.
Related: Real Estate Ads: Use These Words to Sell Your Property Fast
Step 7: List and Market the Property
If you?re working with a real estate listing agent, he/she is in charge of listing your real estate property and marketing it to find potential buyers. Since the internet is the first place most buyers and their agents will see listings of homes for sale, you can be sure that your agent will upload the listing to the MLS. You?ll also likely see your house appear on sites like Zillow, Trulia, and Mashvisor, which are either posted by your agent individually or pulled from the MLS. You can also expect your listing agent to market your property for sale through:
- Social Media: Share your MLS real estate property listing across social media channels including Facebook, Twitter, Instagram and Pinterest with stunning photos and strategic hashtags
- Host Virtual Tours: As mentioned, 3-D tours give buyers a realistic feel for the property with virtual walkthroughs. In today?s advanced market, some consider this marketing strategy a must
- Reach Out to Other Agents: Your listing agent will network with buyer?s agents whom he/she knows in the area to bring home hunters looking in your neighborhood to the table
- For Sale Signs: The old-fashioned way of marketing a home for sale by sticking a ?For Sale? sign in the front yard still captures the attention of passersby who could be potential buyers
- Traditional Marketing Strategies: Finally, agents still advertise homes using traditional methods like print media, including newspapers, magazines, and local flyers to reach more buyers
If you?re here to learn how to sell your house without an agent, you can also market your property using the above methods (though they will cost you). Do your research and find real estate listing websites that allow you to post homes for sale online. Such sites come with a flat fee, but others are free and popular among home sellers and buyers. For example, you can list your property for sale on the Mashvisor Property Marketplace for free where it will be viewed by thousands of potential buyers.
Also, spread the word that you?re selling your home on your social media accounts or by sending the listing to family, friends, and neighbors. You never know where a great offer will come from. So, the more people who know about your sale, the more likely you are to find a potential buyer.
Step 8: Hold an Open House and Private Showings
If you market your home well, you?re bound to attract prospective buyers. However, buyers also want to see the house in person before making any kind of commitment. A traditional open house is an excellent way to get people in the door even if they?re not serious buyers yet. Buyers will ask their agent to book a tour through your listing agent, so you don?t have to worry about managing communication or scheduling with buyers directly. A good real estate agent will help manage the showings with your schedule.
You do, however, need to be present and prepared for the duration of your open house. So, make sure to dress professionally, devote your attention to everyone, and answer questions patiently and thoroughly. While some sellers print out their MLS listing, consider going the extra mile by creating a glossy sales sheet and making a few dozen copies. Also, the best time to schedule your open house is on a weekend for 2?3 hours (feel free to go longer if you want). Assuming the property is already cleaned and staged, your primary goal now is to give a positive first impression of your home.
Furthermore, serious buyers will often request private showings. These are the people who will most likely make an offer. During these private showings, be sure to keep your house extra clean so potential buyers can tour without distraction.
Step 9: Receive and Negotiate Purchase Offers
And now the offers start rolling in. Offers are submitted by the buyer?s agent to your agent, or directly to you if you?re selling a home on your own. If you?re lucky, you?ll receive multiple offers and trigger a bidding war. But, if you?re not so lucky, you may receive offers below your asking price. This step of the home selling process is where your agent (or attorney for FSBO) is your best friend as he/she will review offers, weigh the strength of each one, and walk you through which offer you should choose.
Also, when you get an offer, you have a few choices: either accept the offer as it is, make a counteroffer, or reject the offer. A counter offer is a response to an offer that is too low, in which you negotiate on price and further terms. While reviewing offers, you may be tempted to just accept the highest one. Still, there are important details that you should pay close attention to other than the purchase price, like:
- How the buyer is paying ? cash vs bank financing
- If the buyer is financing the sale with a mortgage, the offer should include a pre-approval letter
- Down payment amount
- Contingencies such as the sale of the buyer?s current home
- Seller concessions for covering things like inspection fees and title insurance
- Closing costs
- Proposed closing or escrow date
If you accept an offer, expect the buyer to order an inspection and appraisal on your home. Based on the results, buyers will negotiate the offer and ask you to either fix any issue before completing the sale or to give them a credit to fix the issues themselves. Of course, you have the chance to reject these requests if you?ve already done a home inspection and priced the house with these issues in mind.
Step 10: Complete Paperwork and Close the Sale
Once you and the buyer have reached an agreement, you need to hire an escrow or title company to take care of the closing process. The escrow or title company will act as a third party to gather documents and payments between sellers and buyers. Once your home is in escrow, the title report confirms the legal owner (which should be you). It?s common for unknown title issues to hold up a sale. So, if any issues come up in your report, work with your agent to solve them as soon as possible and sell your home fast.
Along with the title report, your escrow company will send a number of documents to look through like a grant deed, state-specific forms, property information statement, and more. This is why we advise hiring a real estate attorney when selling a house ? especially if you?re selling as FSBO. Attorneys take care of all contracts, paperwork, fine print of a home sale, and make sure there aren?t any issues that you?ll need to correct before completing the sale. All that?s left for you now is to sign your title and escrow documents. You?ll be wired your money, and the sale will be complete. Congratulations, you made it!
How Much Does It Cost to Sell a House?
As you can see, the process of how to sell a house comes with costs beyond agent commissions. So, even those who forgo hiring a real estate agent and decide to go for sale by owner will not be saving as much as they?d hope to. To give you an idea about how much it costs to sell a house, here?s a list of the common costs associated with home selling:
- Agent Commission: On average, sellers pay their listing agent a commission of about 6% of the price of their home, according to realtor.com. If you?re selling your home yourself, you?ll still have to pay a commission to the buyer?s agent
- Home Repairs: If you?ve discovered that the property needs repairing before selling it, you?ll need to hire a handyman or a general contractor to get your property ready. While you can do minor repairs yourself, major ones (like replacing a roof) will cost you
- Cleaning Service: For an average sized home, this can cost an average of $150 dollars, according to thelendersnetwork.com
- Home staging: According to HomeAdvisor, professional home staging costs an average of $979 nationally
- Professional Photographer: While the cost varies by area and the size of your property, you can expect to pay $500 to $1,000 for a photographer, according to Realtor.com
- Real Estate Listing Website: As mentioned, websites like the MLS and FSBO.com allow you to list your house by paying a flat fee. Listing fees aren?t exceedingly expensive, though. MLS packages, for example, start at about $100 for six months. Don?t forget that you can always find free listing sites as well to eliminate these costs
- Closing Costs: In a buyer?s market, a seller could be asked to cover part or all of the buyer?s closing costs to sweeten the deal. These costs add up to around 2% to 5% of the cost of the home
- Capital Gains Tax: If your home has appreciated a lot, you may have to pay capital gains tax. This tax is based on the difference between the property?s purchase and selling price, minus the value of improvements
- Other Costs: Of course, there are other costs that come with selling a house that may or may not apply to you depending on your situation and range in price depending on your city
Bonus Tips to Sell Your House Fast
#1 Time Your Sale Just Right
While it?s all about ? location, location, location? in real estate, timing also plays an important role to sell your house fast and for the most money. Typically, summer and spring are the best time to sell a house while winter is a slow time for home sales. This, however, also varies by location, so it?s important to research the best time to sell in your area. For example, the odds of selling fast and commanding a higher price increase when inventory is low in the area (a seller?s market). On the other hand, when it?s a buyer?s market and home sales have cooled, buyers are picky and will take their time looking for the best homes for sale.
#2 Amp Up Curb Appeal
Your home?s exterior is the first thing buyers see (in person and online). If it doesn?t look good, they?ll move on to the next listing. So the curb appeal is a major factor for a successful and fast home sale. A few tips to add curb appeal include repairing the exterior, painting the front door and shutters, planting new flowers, trimming hedges, landscaping, and more. As you can see, there are numerous ideas to make your home feel inviting and generate interest and, subsequently, a sale. For more ideas, here are 7 Easy Ways to Add Curb Appeal to Your Listing When Selling a Property.
#3 Get Smart Home Features
Smart home technology has had a big impact on the real estate market and has become a common thing these days. If you?re wondering how to sell a house fast, consider adding smart features in your property. This will not only increase its value and allow you to sell for a higher price but will also make the property more attractive to a large potential buyer pool. In turn, smart homes often spend less time on the market ? meaning, they sell fast.
#4 Think Like a Businessperson
As a homeowner, selling your house is a big task that can be draining, both physically and emotionally, especially if it was your home for the past 20 years. This is why you need to make sure you?re emotionally ready to let go before even starting with the first step. And when you receive a good offer, negotiate with buyers like a business deal and keep your emotions in check. When in doubt, try looking at the transaction from a purely financial perspective and revisit your motivations for selling in the first place.
Ready to sell your home? List it for sale for free with Mashvisor.
Originally published at https://www.mashvisor.com on June 22, 2019.