How to sell your house A complete guide for sellers
How to sell your house: A complete guide for sellers
So, you’ll want to be prepared as a seller and control the factors that could have a big impact on your bottom line. Things like hiring a great real estate agent and maximizing your home’s online appeal can translate into a more seamless closing — and more money in the bank.
Here are 12 steps to take to sell your home in 2022:
- Hire an agent that knows the market.
- Set a timeline for selling your home.
- Get a pre-sale home inspection.
- Don’t waste money on needless upgrades.
- Get professional photos.
- Put your house on the market.
- Set a realistic price.
- Review and negotiate offers.
- Anticipate seller closing costs.
- Weigh the tax implications.
- Gather necessary paperwork for closing.
- Consider hiring an attorney.
1. Hire an agent who knows the market
The internet makes it simple to delve into real estate agents sales history and professional designations, so you can choose the right person to work with. Look up agents’ online profiles to learn how long they’ve been in the industry, how many sales they’ve done and what designations they may have earned. Pay attention to how and where they market their listings, and whether or not they use professional photos.
Some homeowners might be tempted to save on paying a commission and instead sell their home themselves, without an agent. This is known as for sale by owner or FSBO. The amount sellers stand to save on those fees can be thousands of dollars, usually 5 percent or 6 percent of the total sale price.
However, an experienced agent does a lot to earn their fee. For example, they can expose your house to the broadest audience and negotiate on your behalf to garner the best offers possible. If you go it alone, you’ll have to personally manage prepping your home, marketing it, reviewing buyers’ offers and handling all the negotiations and closing details.
2. Set a timeline for selling your home
Selling a house is a major undertaking that can take two to four months from start to finish — or much longer, depending on local market conditions and the level of inventory available.
As soon as you decide to sell your house, jump right into researching real estate agents to find someone with the right experience for your situation.
At least two or three months before you plan to list, consider getting a pre-sale home inspection (more on that below!) to identify any problem areas, especially structural or mechanical issues that might need addressing to facilitate a sale. Leave enough time to schedule necessary repairs.
About a month before listing your house, start working on staging and deep cleaning in preparation for taking photos.
Here’s a checklist of things to do before listing your home:
- Research and interview real estate agents.
- Declutter, perhaps moving excess items to a storage unit.
- Get an optional home inspection to identify any issues.
- Schedule repairs if needed.
- Deep clean.
- Stage the house.
- Have professional photos taken.
3. Get a pre-listing home inspection
A pre-listing home inspection is optional, but it can be a wise upfront investment. A detailed inspection report can identify any structural or mechanical problems before you list your home for sale. It may cost a few hundred dollars, but it will alert you in advance of issues that buyers will likely flag when they do their own inspection later in the process.
4. Don’t waste money on needless upgrades
If you’re going to spend money on costly upgrades, make sure that the changes you make have a high return on investment. It doesn’t make sense to install new granite countertops, for example, if you only stand to break even or even lose money on them. Plus, these improvements may not be necessary to sell your home for top dollar, particularly if inventory levels are low in your area. A fresh coat of neutral paint, new carpet and a spruced-up landscape are typically low-cost ways to make a great first impression. In general, updates to the kitchen and bathrooms provide the highest return on investment. If you have old cabinetry, you might be able to simply replace the doors and hardware for an updated look. For example, you can swap out those standard-issue kitchen cabinet doors for modern, Shaker-style doors in a weekend without breaking the bank.
5. Get professional photos
Work with your real estate agent to schedule a photographer to capture marketing photos of your home. High-quality photos are critical, since maximizing your home’s online appeal can make all the difference between a quick sale or a listing that languishes. Some real estate agents build professional photography and virtual online tours into their suite of services. If they don’t, though, you might want to seek a photographer out on your own. The fee for professional photography will vary based on the size of your home, its location and how long it takes to shoot the property. A professional photographer, with a strong portfolio, knows how to make rooms appear bigger, brighter and more attractive. The same goes for your lawn and outdoor areas. Dimly lit online photos can turn off homebuyers before they even have a chance to read about the lovely bike path nearby or the new roof you just installed, so well-taken photos can really pay off. Don’t forget to declutter and tidy up before the photo session.
6. Put your house on the market
Here are tips to get your home market-ready and attract buyers for a speedy sale:
- Focus on the home’s online appeal
- Stage it and keep it clean for showings
- Let someone else show the house
Make yourself scarce when potential buyers come to view your home. Let them imagine themselves in the space, free from the distraction of meeting and talking to you. Generally, buyers are accompanied by their own real estate agent to view your home. You can also ask your own agent to be present at showings.
7. Set a realistic price
Homes that are priced too high will turn off potential buyers, who may not even consider looking at the property. Also, homes with multiple price reductions may give buyers the impression there’s something wrong with your home’s condition, or that it’s undesirable. So it’s best to eliminate the need for multiple reductions by pricing your home to attract the widest pool of buyers from the start.
8. Review and negotiate offers
After your home officially hits the market and buyers have seen it, ideally the offers will start rolling in. This is where a real estate agent (or attorney) is your best advocate and go-to source for advice. If your local market is competitive and favors sellers, buyers will likely offer at or above asking price. You might even get multiple bids. On the other hand, if sales are slow in your area and you don’t get many offers, you may have to be open to negotiating.
When you receive an offer, you have a few choices: Accept the offer as it is, make a counteroffer or reject the offer.
A counteroffer is a response to an offer, in which you negotiate on terms and price. Counteroffers should always be made in writing and have a short timeframe (48 hours or less) for the buyer to respond. You can offer a credit for paint and carpet, but insist on keeping your original asking price in place, for example. Or, you might offer to leave behind certain appliances to sweeten the deal.
If you’re lucky enough to get multiple offers, you might be tempted to simply go with the highest one. But look closely at other aspects of the offer too, such as:
- Form of payment (cash versus financing)
- Type of financing
- Down payment amount
- Requests for credits or personal property
- Proposed closing date
Be mindful that if a buyer is relying on lender financing, the property has to be appraised. Any shortfall between the purchase price and appraised value will have to be made up somewhere, or the deal could fall apart.
9. Anticipate seller closing costs
Both the homebuyer and seller have closing costs. The seller typically pays the real estate agent’s commission, usually around 5 percent to 6 percent of the home’s sale price.
Some other costs commonly paid by the seller include:
- Government transfer tax
- Recording fees
- Outstanding liens
- Title company or Attorney fees
- Brokerage transaction fees
Additionally, if the buyer has negotiated any credits to be paid at closing for repairs or closing costs, the seller will pay those too. Your real estate agent or the closing agent should provide you with a complete list of costs you’ll be responsible for at the closing table. While the buyer typically pays a bulk of closing costs, anywhere from 2 percent to 4 percent of the sales price, be aware that you might have to pay some fees, too.
10. Weigh the tax implications
The good news is, many home sellers won’t owe taxes on profits from the sale of their primary home. If you’ve owned and lived in your home for at least two out of the previous five years before selling it, then you will not have to pay taxes on any profit up to $250,000. For married couples, the amount you can exclude from taxes increases to $500,000. However, if your profit from the home sale is greater than that, you need to report it to the IRS on your tax return as a capital gain. Consult our accountant to tax advisor for additional information on this or how you may be impacted.
11. Gather necessary paperwork to close
There’s lots of paperwork needed to properly document a home sale. Organize it all in one place to help things go more quickly. Some of the main documents you’ll need to gather include:
- Your home’s original purchase contract
- Property survey, certificate of occupancy and certificates of compliance with local codes; such as permits
- Mortgage documents
- Tax records
- Appraisal from your home purchase
- Homeowners insurance
- Home inspection report, if you had a pre-listing one done
12. Consider hiring a real estate attorney
Not all states require sellers to bring a real estate attorney to the closing. Hiring one could cost a couple thousand dollars, but the expense might be worth it to protect such a large financial transaction. An attorney can help fill out paperwork, review contracts and documents, identify potential issues and ensure the sale goes as smoothly as possible. An attorney would also be able to spot title issues that could hold up your sale for weeks or months — or even torpedo the deal — such as:
- Outstanding liens or judgments
- Trust issues
- Mortgage balances
- Tax issues
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