Why are you selling?
To mitigate the stress of your home-selling experience, measure your needs for your foreseeable future. Define your goals for the next 5-10 years; weigh the benefits and negatives of selling or renting your house; determine if you can afford selling, moving and buying a new home; calculate your home equity; conduct thorough research on the local housing market; determine how you can remodel the home to best fits your needs.
Calculate selling expenses
While selling or buying a house, there are myriad expenses that will affect your overall budget. First, list all the maintenance – including the costs of hiring supplies and contractors – you will have to perform to ensure your home’s optimal shape before listing it on the market. Determine what projects your can afford and how they will impact the selling of your home. Chief among these projects should be remodeling and green upgrades to increase your home’s value. Finally, expect to pay between seven to 10 per cent of the home’s sale price in closing costs, which include real estate agent commissions, transfer taxes and prorated property taxes.
When you have prepared your reasons for selling, required projects and expected expenses, develop a comprehensive strategy to shorten the listing length. Determine how fast you need to sell your house and how much money you want for it. If you go FSBO (For Sale by Owner), hire and negotiate with a real estate agent the terms of your listing contract, which include commissions and termination date. The agent will assist you in determining your home’s strengths and unique features, which will be used to effectively advertise your home.
Determine fair market value (FMV) and set price
To both set a realistic price for homebuyers and maximize your return of investment, home-sellers should research their area and see how their home competes. Go through public records and collect information on comparable homes in your area featuring similar square footage and construction, and were built around the same time, are in similar condition and currently on the market. Browse your area’s home listings to understand the the current market and home prices, and ask your agent to prepare a Comparative Market Analysis (CMA) report. Identify what is the average cost per square foot for your area, and make sure your home aligns with it. Use your FMV to determine your asking price, and consider pricing strategies such as pricing low to allow for a bidding war or Value Range Marketing.
Advertise and Market the home
There are various outlets sellers can use to list their home to the general public. Consider the following when ready to list your home:
- listing service
- "For Sale” sign
- sections of local newspaper
- estate publications
- free ads on websites such as craigslist.com
- your own website to promote your home
- notices or flyers about your home to real estate agents, family, friends, colleagues, etc.
- photos to showcase your home. Hire a professional real estate photographer to capture its best features, or learn to take photos yourself
- a virtual tour video walking through each room of your home and describing its features
Prepare and stage the home
To ensure your home’s optimal condition and appearance for viewings, make any internal and external improvements, and get rid of anything you don’t need. Help prospective homebuyers imagine themselves already living in it by donating or selling unnecessary goods at a garage sale, decorating and replacing outdated lighting fixtures and window treatments. Increase your home’s “curb appeal” – its external attractiveness as seen from the street to entice homebuyers. Hire a professional or research staging tips to get the best advice for your home.
Set up showings and open houses
Now that you’ve improved your home’s appearance, keep it in ready condition during and in between showings and open houses. Schedule appointments with homebuyers or set up a lockbox so real estate agents can show the home when you aren’t available. Hold and invite local real estate agents to an exclusive open house to introduce them to the home – this allows you to get critical feedback. Following this, hold an open house for potential buyers in the general public, and advertise it through local publications and signage in the area.
Review deal offers
Throughout the process of receiving offers, maintain a process and your emotions to improve organization and optimism. Keep an organized record of the following: the proposed offer price, preapproval letter, contingencies, honest money amount, proposed closing date and offer expiry date.
Negotiate the deal
When a homebuyer makes an offer, you as a seller should treat each offer as a chance to negotiate to get the best deal for you. Here’s how:
- a full-price counteroffer, if your comps can back it up
- the sale contingent on your buying a home
- forget to set a firm closing date and move-in date
Assisting the homebuyer in various ways can help close the deal:
- the buyer’s offer is contingent on selling a home, counter with a Removal of Sale Contingency
- to include furniture, appliances, window treatments or lighting fixtures
There may be some grey areas you can negotiate:
- you won’t renegotiate the price, offer financial services that don’t require being paid out of your pocket, which include paying for part or all of the buyer’s closing costs, or repairs found during property inspections
- you are uncertain about the possibility of buying a home after you sell, stipulate a “rent back” clause that enables you to rent back the home from the buyer after escrow closes
- the most ideal buyer is facing trouble qualifying for a mortgage, consider offering seller financing, a mortgage assumption or a lease-to-own deal
Go through escrow
As you hold money in escrow to pay property taxes and insurance, ensure that you have every related issue in order to ease the process. This includes:
- a plan for home repairs (i.e. when they should be done, who pays for them)
- and prepare the home for appraisal and home inspections
- an escrow officer who will order a title search, request payoff information for your mortgage and other liens on the home, prepare and record documents, hold and disburse funds and prepare closing statements
- for the final walkthrough inspection
- the closing documents and move out
- copies of your documents for reporting the sale on federal and state tax forms