10 Easy Steps in Selling A Home
1. Why Sell You’ve decided that you’re ready to sell your house. Here’s an important question: Why are you selling? Think about the reasons why you’re selling your home and be prepared to verbalize your motivation to your agent. Are you a first-time home buyer? Have you out-grown your house? Are you moving for a new job? Do you want to move closer to good schools now that your children have reached a certain age? The answer to all of these questions will help your REALTOR better assist you in selling your home.
What are your goals in selling? How quickly do you need to sell? Do you have a back-up plan if your home doesn’t sell? If your home doesn’t sell when you need it to, is it possible to rent your home and cover your mortgage? These are all important questions to think about before selling.
2. Choosing an Agent Probably the most important person you will work with on any real estate transaction is your agent. He or she will be there with you every step of the way, acting as your advocate, advising you during the home-selling process and making sure that you get the best price for your home. Word-of-mouth is the most common way that people find their agent. Who better to work with than someone who did a great job for one of your friends, family or co-workers. If you don’t have a referral, there are consumer-driven web sites, like Yelp and Angie’s List, that allow people to rate REALTORS they’ve worked with. Searching the Internet is another way people look for their agent when they don’t have a referral.
A good real estate agent is ethical, hard-working, detail-oriented, has extensive market knowledge, knows how to price properties and is an effective negotiator.
Keep in mind that every real estate transaction is different but the home-selling process ultimately shares the same steps. You and your agent will work together closely to ensure that the proper steps are taken and the transaction is tailored to your needs.
3. Pricing Your Home There are three reasons a property sells: price, condition and location. Two of these items, price and condition, can be changed. Probably the most important of these is pricing. Your agent’s goal will be to ensure that you receive the most money for your home. A Comprehensive Market Analysis (or CMA) is a report that compares similar homes that have sold in the past six months. Comparable sales are homes that most closely resemble your home. Homes in the CMA are chosen for similar location, square footage, age of construction, amenities upgrades and condition. The CMA is a tool used to determine fair market value and pricing of a home. It is critical to price homes close to the fair market value. Under priced homes will sell too quickly and short-change sellers. Homes that are over-priced will waste crucial market activity.
The majority of the market activity, approximately 80%, occurs within the first six weeks on the market. An over-priced home that sits on the market gets stigmatized. People assume that something is critically wrong with the house the longer it’s been on the market.
Another important element to remember about pricing is that an appraiser has to confirm the value of the contract sale price in order for the lender to approve the sale.
Your agent will work closely with you in pricing your home in order to ensure that you sell in a timely manner for the most money.
4. Preparing Your Home An important factor in selling your home is property condition. Of the three reasons a home sells (price, property and condition), this is one of the two that can be changed. You may not be able to do any major upgrades (or possibly you already have) but there’s a lot you can do in preparing your home for sale for little or no cost to you.
Remember, first impressions really count. Your curbside appeal can be as important as the interior. Make sure that your lawn is cut and any shrubs or bushes are well manicured. Is it possible to add some mulch or eye-catching flowering plants around the walkways or in front of house for added curb appeal? Take a good, objective look at your home from the outside and make sure it’s presentable. Some ways to prepare the interior of your home include the following: lighten your house to make it look larger and cheerier, optimize all of the space your home has to offer and depersonalize. Think about ways you can add light to the room. Do you need to add more overhead lighting or lamps? Should you get brighter bulbs? Another big difference in presentation is de-cluttering. The general rule is to de-clutter by 50%. You want potential homeowners to see the space and possibility not your personal belongings. You can depersonalize your home by removing family photos. A few personal photos are fine. You just don’t want the buyer to feel like they’re intruding on someone else’s space. Have a local cleaning company do a make-ready on your house. In other words, have a head-to-toe cleaning done on the house, including dusting, cleaning all of the appliances and cleaning the windows, window sills and ceiling fans.
You might also need to have your carpets professionally steam cleaned. Your REALTOR will walk through your home and make personalized home-preparation suggestions. Besides the condition of your home, one way to prepare your home for sale is to have it pre-inspected by a general home inspector and make any necessary repairs to the foundation, roof, plumbing, electrical and HVAC. This can reduce your liability and show buyers that you are earnest in selling your home in good condition and with full disclosure.
5. Marketing Your Home There are many ways to market a home and not every home requires the same marketing. Most buyers are Internet savvy. Ninety percent of Texas home buyers use the Internet to search for homes. This is why it’s important to have a strong Internet presence. Studies have shown that the top information resources buyers rely on most are real estate agents, the Internet, and yard signs. Other effective marketing tools include open houses, e-flyers, property tours, networking with other agents, the Multiple Listing Service (MLS), virtual tours, strong photography and a custom print flyer. Your agent will work with you to tailor an effective marketing program for your property.
6. Showings Another important step in selling your home is making sure that potential buyers have easy access to your home. The more difficult it is to see your home, the harder it will be to sell it. If a potential buyer has to make an appointment to view your house, there’s a good chance you will get less showings. The easier the access, the more showings you will get; and, hopefully, in turn, the quicker you will sell your house. Keep in mind that buyers are not comfortable viewing your home while you’re there. They will feel more guarded and feel like their visit is an intrusion. They will probably not spend as much time there as they would if you weren’t home.
Homes show best when neat and tidy and with all window treatments drawn and all lights turned on. If you have a noisy or aggressive animal (one who likes to jump on people), it’s best to either remove the animal from the house (keep them in the garage or backyard or have them stay with a friend or relative) or have them crated. Your agent will work with you to determine the best way to show your house in order to create the most and best exposure.
7. Negotiating the Offer You’ve received an offer on your home and you’re ready to review it with your agent. The contract has many terms (closing date, earnest money, option period and fee, financing, who pays for the title policy) but, most likely, the most important one to you is price. Your REALTOR has already prepared a Comparative Market Analysis (CMA) and you will probably have a good idea about what sales price is acceptable.
You and your REALTOR will go over the terms to decide which ones need to be countered. You could choose to accept the existing offer in its entirety or you could reject it all together. All of the terms in a contract are negotiable. The key to executing the contract and coming to an agreement is finding the terms that work for both the seller and the buyer. Your agent will advocate for you during the process and make sure that you’re completely satisfied with the contract terms and especially the sales price.
8. The Home Inspections After the negotiations are completed and the contract has been executed, the buyer will schedule a general home inspection. The inspector may recommend that additional inspectors that specialize in areas such as foundations, roofs, plumbing, electrical or HVAC, evaluate the house further. After all of the inspections have been completed, the buyer may ask you to make repairs or reduce the sales price by the cost of repairs. You and your agent will discuss the proposed repairs and you will decide which ones you agree to, if any. Your agent will advocate on your behalf and communicate with the buyer’s agent.
9. Count Down to Closing The home inspections have been completed and you’ve made it through the option period. All contract negotiations are over and you’re just waiting for the closing. You may have agreed to do some repairs and you’ve had them completed by the appropriate professionals. Your agent will provide the receipts to the buyer’s agent before closing. You'll need to start packing and get ready for your move. You’ll want to make sure that you’ve completely moved out of the house at least the day before closing. You’ll need to make sure that all items have been removed and the home is spotless. You may want to hire a professional cleaning company to perform a make ready. A make ready involves cleaning a home very thoroughly, including windows, window sills, ceiling fans, and all appliances.
10. Closing Day
On closing day, you’ll meet with the escrow officer at the title company to sign all of the documents required for closing. You will bring all keys as well as any necessary paperwork or items for the home buyer (warranties that transfer, garage door openers, manuals). Once the buyer signs the closing documents, the escrow officer will notify the banks. At this time, the funds will be exchanged between banks. You will then receive a phone call from the title company to pick up your check for the proceeds owed to you for the sale of your home. Or on the day of closing the proceeds from the sale of your house can be electronically wired to the account of your choice.
Just because your house has closed does not mean that the relationship with your REALTOR will end. Your agent will always remain as an invaluable resource for you.