The process of selling a home is similar to buying a home and is often done at the same time. It's a big task, to be sure, and often involves a multitude of home improvement projects, research, and plenty of patience. Everyone's situation is unique in some way, but there are some basic steps and fundamental truths that every home seller should know.
Researching Your Local Market
You could have the nicest house in the neighborhood but still have trouble selling it for the price you want because of local or national market trends. For instance, a home that has been improved in many ways can lose value if surrounding homes have been neglected, there is an uptick in crime, or new development is changing the character of the area.
Generally, your ability to sell a home improves when:
- The economy is strong and lots of people are employed
- Interest rates are low, which encourages more people to take out mortgages
- It's on the market during a time of year when people are most likely to move (spring to late summer, versus the dead of winter)
One of the best ways to determine your home's value is to look at what similar homes are selling for nearby. These are referred to as "comps," or comparable homes. A realtor can give you examples of comps in your area.
But realize that looking at a house on paper (or the internet) is not as good as looking at a comparable house in person. It may have the same square footage and number of bedrooms but for other reasons be worth more or less than your home.
Visiting open houses in your area will give you a better sense of what's available and what people are asking for their homes. Plus, you will be able to see how other homeowners are marketing their homes.
That said, keep in mind that what really matters is the price the home actually sells for, not what the seller is asking. Also, note how long it took to sell. An overpriced home could sit on the market much longer, often until the homeowner reduces the price.
If you need a fast sale, that may influence your asking price.
If you plan on buying a new home after selling your existing home, you will want to do similar market research in any new neighborhoods where you are looking.
Do You Need a Real Estate Agent?
Even if your state doesn't require you to hire a real estate agent or real estate attorney before selling your home, it's often a good idea to do so. A real estate agent can make the process go much more smoothly, although you will pay for that service.
Selling a home is time-consuming and can be complicated, even with the help of an experienced agent. With professional help, sellers are often able to get a better price. After all, the real estate agent's commission (usually 5 to 6 percent) depends on the selling price so they have an incentive to get you the best deal possible.
A real estate agent can help you prioritize home improvement projects so you get the biggest return on your investment. If they regularly work in your area, your realtor may even know companies in your area that can help you finish nagging projects that have gone uncompleted for years.
Your agent has expertise in marketing properties. They will have ideas for "staging" your home so it shows in its best light.
Your agent can also show your home while you're at work, so you aren't inconvenienced. They will help you negotiate offers and will complete all the necessary paperwork.
If you decide to go it alone, there are resources that can help you. Make sure you have plenty of spare time and at least some experience in finance and knowledge of real estate law.
You may choose to handle the marketing and negotiations yourself, and then work with a real estate attorney to ensure all the legal paperwork is done properly for the closing.
Getting Your Home Ready to Sell
Even if you think your home is ready to hit the market, you should have it professionally inspected. This will avoid surprises when a prospective homebuyer's inspector comes through prior to closing.
Your inspector will find problems that you can easily fix. If bigger problems are uncovered — plumbing problems or roofing problems — you can then decide if you want to invest in making the repairs or if you want to sell at a reduced price.
Not everything needs to be fixed or improved, as long as any deficiencies are clearly communicated to potential buyers. Being upfront about problems avoids the potential for a lawsuit later.
Home Closing
If a buyer wants to make an offer on your home, they will sign a purchase agreement spelling out the terms of their offer. When you sign that agreement, it becomes a legally binding contract. There are ways to give yourself some wiggle room in the contract, such as including "contingencies."
A common contingency is that the sale of the home is contingent upon you finding a new home to move into, or the buyer being able to sell their home before purchasing yours.
Once the paperwork is signed, a closing date will be set. The closing is when the property is legally transferred to the new owner.
