First-Time Home Sellers, Check Out This 5-Step Guide
You've made a lot of memories in this place, but it's time to admit the truth. You've outgrown this little starter home, and you and your family are ready to move on to bigger and better accommodations.
There's just one teensy little roadblock you've got to overcome before you can get there: this whole home-selling thing. This process is entirely new for you, and you need a bit of guidance to get through it intact, guidance that ensures you won't lose any money along the way.
Home selling may seem daunting at first—securing the right real estate agent, negotiating a fair price for your home, staging your property. But don't worry. Countless home sellers have gotten through this process before, and even turned a bit of a profit as a result.
Abide by these general principles and you might just do the same. Who knows, you could even put the profit toward your next home!
1. Find a listing agent
What is a listing agent?
Sometimes referred to as seller’s agents, listing agents are real estate professionals that assist with the marketing and valuation of a piece of property in advance of its sale.
Listing agents coordinate open houses, stage the home for prospective buyers, and serve as your general representative throughout the home selling process, handling paperwork and other matters.
Do you really need a listing agent? Unless you’re prepared to give up all of your precious free time over the next couple of months (or longer, depending on when your place sells), the answer is yes. They’re an indispensable asset for those in the midst of selling their home.
How much does a listing agent cost?
Listing agents charge a 5% commission fee on the sale price of your home, which they split with the buyer’s agents involved in the transaction.
Benefits of hiring a listing agent
It’s possible to go it alone and handle this major real estate transaction by yourself, but as we mentioned before, unless you’re steeped in market knowledge and have copious amounts of free time to devote to this pursuit, it is generally not recommended.
Here are just a few of the benefits associated with hiring a listing agent.
- They’re experienced negotiators – Any listing agent worth his or her salt will work as hard as they can to get you the best purchasing price possible—after all, it’s in their best interest to do so (see the section below on listing agent costs)
- You’ll have a real estate expert on hand to provide guidance – If there is any paperwork-related confusion, or a question about the market in your area, your listing agent will be there to provide a solution
- They can assist with property valuation – As the seller, you aren’t exactly the most objective party when it comes to assessing your home’s value; listing agents offer unemotional estimates of your home’s worth based on market data and other factors
2. Find out when to list
Knowing when to list is almost as important as pricing your home, if not more so.
There aren't any hard-and-fast rules when it comes to timing. You really just have to take the temperature of your local housing market. That's where insights from a listing agent can be so incredibly helpful (or from a trusted friend or family member who has sold a home in the same general area, and can offer their unique perspective and advice on the matter.)
That being said, there are a few basic principles anyone can follow, regardless of where they live, that have statistically been shown to increase the odds of getting your home sold.
List during warmer months
Unless you live in a place like Arizona or Florida, generally speaking, this means listing during spring or early summer.
With more flexible family schedules, cheerier weather (and the better moods that accompany that change in climate), and post tax season dollars burning a hole in buyers' pockets, it just makes sense to list this time of year.
Wait until you're in a sellers market
What's a sellers market, you might be asking? Basically, it's when the demand for houses is greater than the available supply of homes on the market.
When there are fewer homes available for sale, but a lot of would-be home buyers interested in making a purchase, sellers have more latitude to name a price that works in their favor. If you have the ability to wait, don't sell until you're sure you can get a price that's a win for you and your family. Do the smart thing and wait until you're in a sellers market.
3. Price your home
Property valuation resources
Listing agents are the most useful resource a prospective home seller has when it comes to property valuation.
Their built-in knowledge of the local real estate market, combined with their extensive professional networks, will help you determine a price that is reasonable for your neighborhood, and that satisfies you as a seller.
There are additional tools at a home seller’s disposal that are far less expensive but are known to produce useful estimates.
Automated valuation models (AVMs) and online research through platforms like Zillow (which allows you to check the prices of other homes that have sold in your neighborhood, which would be considered “comparables” because of their proximity, size, and architectural style) are great, and are definitely worth exploring.
Factors that influence property value
Square footage isn’t the only factor that can determine the value of your property. What are some of the characteristics that real estate professionals look toward when determining a price for your home?
- Location – Is it an upscale neighborhood? What about an up-and-coming area that's just about to take off? Is it near all the right schools? Close to a grocery store? All sorts of location factors can influence pricing
- Condition – Is the home old? Are its foundations intact? Is there water damage, termite damage, fire damage?
- Additional Concerns – If your home was the site of a violent crime, such a robbery or a murder, this could give potential buyers pause when they consider your property, and negatively impact its valuation
- Upgrades – Not all home additions and renovations are created equal; that outdoor brick oven pizza kitchen isn’t going to win you nearly as many points on the property valuation front as, say, adding an attic bedroom or sprucing up your landscaping
It’s worth remembering that the longer the house sits unsold on the market, the more eyebrows will be raised among prospective buyers, who will assume that there is something wrong with the property.
So it pays to get the price right the first time, and to be willing to adjust accordingly if you get a tempting enough offer from a buyer.
A good rule of thumb is this: the more amenable you are to fair changes in the price, the more likely you are to sell your property in the short term, which will be good for your pocketbook moving forward.
4. Stage your home
Why is staging your home important?
Home buyers are itching for an excuse to downgrade the initial asking price on your home.
Staging is one of the most powerful tools in a home seller’s arsenal to combat any potential downgrading. It’s a way to reinforce the validity of your initial asking price—a way to provide tangible proof that your property is attractive, functional, and well worth the price tag you’ve already set for it.
How much does staging cost?
Prices vary from case to case, but according to a study conducted by the National Association of Realtors, the median cost of staging a home is around $675.
Home staging professionals generally charge between $50 and $100 an hour to prepare your house for viewing.
Home staging tips that anyone can implement
There are a number of low to medium difficulty changes you can make around your property to make it more attractive for prospective home buyers. Consider taking the following steps:
- Minimize clutter indoors – Depersonalize your home to the fullest extent possible, so that prospective buyers can visualize how they will decorate each room; this also makes your home appear “move-in ready,” which is a major incentive for anxious home buyers to sign a purchasing agreement
- Repaint key interior spaces – Neutral tones like beige or silver will also help prospective buyers visualize how they will decorate this space, should they choose to buy your property
- Freshen the air before prospective buyers arrive for a tour – If you have pets, this is an especially important step—light a scented candle, put a batch of cookies in the oven, or boil some cinnamon sticks on the stovetop to drive peculiar odors out
- Make minor repairs – That means changing those burnt-out lightbulbs, patching up any holes in the wall, fixing those leaky faucets in the kitchen and in the bathroom, and more
- Let in as much natural light as you can – Claustrophobic, dark, uninviting: it's remarkable the effect that drawn blinds can have on a prospective buyer's experience of your home; open up those blinds and let the space breathe
- Open up entertaining and living spaces – Remove any excessive or unduly large pieces of furniture, take down heavy window treatments, remove extra leaves to shorten dining tables, and more; this helps prospective buyers visualize what they may do with the space in the future
- Clean, clean, clean – Scrub the tilework in the kitchen and bathroom, dust those ceiling fan blades, give those mirrors a good wipe-down, and more—remember, making your home all spic-and-span is perhaps one of the easiest, not to mention most effective, ways to successfully stage your home
A note on the enduring power of curb appeal
When it comes to home selling, prospective buyers will judge a book by its cover.
If the exterior of your home does not reflect the same level of polish and sophistication that you display on the inside, you're going to have a really tough time convincing buyers to take a closer look, and to actually make a purchase.
Take these easy steps to boost your curb appeal right away:
- Tame that unkempt front yard – Trim the hedges, mow the lawn, spread mulch over exposed earth—do whatever you must to spruce up the landscaping, as this will help tremendously with the “curb appeal” factor (oh, and make sure that your house numbers are visible from the street!)
- Rent a pressure washer, and put it to good use – Hose down the exterior of your home, your front walkway, driveway, and any other durable surface that's showing weather and wear
5. Close the sale
How long will it take your home to sell?
Generally speaking, there’s really no telling how long it will take for your home to sell.
The list of factors influencing this timeline is about a mile long. (It’s worth remembering, however, that there are steps you can take to nudge the process along, like staging—a technique that, some report, results in a home being sold 88% faster than their nonstaged counterparts.)
While we can't offer much in the way of hard-and-fast selling times, we can offer a few averages and insights that could give you a better idea of what to expect for your property moving forward.
Average time to offer
If you live in a city, and you've priced your home appropriately, you can expect to receive an offer in about three weeks or a month.
It all depends, though, on the other factors we've mentioned in this post: the time of year, whether or not it's a buyers or sellers market, how much elbow grease you put into minor home improvements, and more.
Average time to close
Once you've found a buyer, on average, it takes at least 65 days for a seller to close on their property with a potential buyer.
If your property is still on the real estate market after a month’s time, don’t panic—this is all to be expected.
Factors that influence how fast your home sells
But real estate professionals tend to hone in on these three characteristics when trying to estimate how long it will take to get your home off the market:
Additions, updates, adjustments, and more to your property can influence how fast your home sells. Beyond “curb appeal,” the typical buyer wants an aesthetically appealing, functional residence that requires as little architectural intervention on their part as possible.
Take a moment to consider where, exactly, your home is situated in relation to a prospective home buyer’s basic needs. Are there grocery stores nearby? Good schools within walking distance?
Are you in an upscale neighborhood, an up-and-coming bohemian-type area, or a place that verges on sketchy? Is there nightlife nearby?
Proximity to a buyer’s needs and interests, as well as the quality and character of your neighborhood, are major determining factors when it comes to the speediness of your sale.
Without fail, overpriced, expensive properties will always take a longer time to sell.
But if you’re not the owner of a multimillion-dollar McMansion, but a modest ranch-style home in the suburbs, then you’re in luck. Price your home competitively, just under market value, and you can expect a greater level of interest in your property from prospective buyers.
Make sure you budget for closing costs
Let's assume you've found a buyer, and that you're ready to close this real estate deal once and for all.
At the end of every real estate deal, when the seller legally transfers their property to the buyer, there are additional fees that both parties agree to cover in order to finalize the transaction. These are known as closing costs.
Closing costs are wide ranging and can include everything from attorneys’ fees to home inspection fees, appraisal fees, and more, though sellers usually stick to paying real estate commissions.
Possible closing costs for sellers include, but are not limited to:
- Real estate commissions
- Homeowners Association (HOA) fees
- Lawyers’ fees
- Property taxes
- Title insurance
How much will you pay in closing costs?
Expect to pay anywhere from 2 to 5% of your home’s final purchasing price in closing costs.
If you’re selling during a buyer’s market, it’s virtually guaranteed that you’ll cover closing costs, so adjust your budget accordingly. Taking this step will serve as more incentive for picky buyers to purchase your property.
Difficult, but not impossible: that's our stance on the whole home-selling process. Pay attention to what your local real estate market is telling you, and be proactive about improving your home where you can, so that it appeals to the sensibilities of prospective buyers.
Take these steps, and others listed in this guide, and you should come out on the other side of this process intact. Maybe even with a little extra money in your pocket. Happy selling!