How to sell your house
If buying a house wins the crown for 鈥淢ost Difficult Adult Thing You鈥檝e Ever Done,鈥� then selling a house must be runner-up. Completing a home sale can require a lot of time, planning, paperwork and even money. Here鈥檚 a step-by-step guide to getting it done.
How to sell your house
Let鈥檚 start with a checklist and then dig deeper:
- Prepare your home for sale:聽Real estate pros call this 鈥渟taging,鈥� but it simply means decluttering, or perhaps giving your walls a fresh coat of paint. We鈥檙e not talking a full remodel.
- Analyze your market:聽Do you live in a buyer鈥檚 or seller鈥檚 market? What are comparable homes in your area selling for?
- Determine whether聽you need a real estate agent or will list聽for sale by owner:聽Some sellers start out listing their home for sale by owner and then聽use an聽agent if they鈥檙e unsuccessful. This can cost you time and money, especially if you have to discount your price.
- Set a competitive price:聽You want to determine what you鈥檒l net from the sale, accounting for聽marketing, closing costs and possible broker commissions. But don鈥檛 overprice your property. Generally, the longer your house stays on the market, the less you鈥檒l get.
- Market your property:聽From magazine-quality photos to compelling listing descriptions, you want your home to make a great impression from day one.
- Get ready to negotiate:聽This is where some real estate agents can really add value: negotiating with prospective buyers. A tough negotiator can make a thousands-of-dollars difference.
- Prepare for the loan closing:聽You may have contingencies to deal with, as well as repairs identified by the home inspection.
- Plan your move:聽There may not be much time to celebrate your sale as you box up your belongings and relocate.
Before your house goes on the market
Teeing up your home for sale might be the most important part of the process. From curb appeal to decluttering, make a commitment to set aside sentimentality and focus on maximizing your home鈥檚 marketability. A lot of family photos have to be boxed up, walls may need a fresh coat of paint, and that cushy but worn recliner might have to be retired.
Professional stagers help prepare a home for sale for a fee, and the results can be dramatic. Pros often will remove half the furniture in a home to make it appear larger. The International Association of Home Staging Professionals says such services reduce a home鈥檚 time聽on the market from an average of 90 days, to 11 days 鈥斅燼nd staged homes sell for 17% more than nonstaged homes.
In the meantime, taking an objective view of your local real estate market will help you manage your expectations, as well as聽price and market your home properly. In a seller鈥� market, you might expect multiple bids above your opening listing price. But in a buyer鈥檚 market, you might have to discount your asking price.
One way to get an initial analysis of your market is to use a convenient tool: Hover over聽鈥淢ore鈥� on the top menu bar, then click 鈥淶illow blog,鈥� and then click the top menu 鈥淟ocal鈥� link. Once you鈥檙e there, enter a city, state, ZIP code or neighborhood you鈥檙e interested in, and you鈥檒l find Zillow鈥檚 insight into your local real estate market, including 鈥淢arket Temperature.鈥�
Selling your home: Agent or For Sale By Owner?
While the temptation to do it yourself may be strong, sometimes an objective voice can make all the difference. Whether you hire an agent or go the for-sale-by-owner route, you鈥檒l want honest feedback along the way 鈥� regarding your proposed price, how well the house will show, and other matters involving the sale.
Just showing the house yourself can be awkward, especially hearing honest 鈥� and sometimes painful 鈥� comments about your home.
A will provide you with a market analysis, detailing homes similar to yours and what they鈥檝e recently sold for. These 鈥渃omps鈥� are critical in helping you set a fair and competitive sales price for your home. Without an agent, you鈥檒l need to do this research on your own.
In addition, local market knowledge is a major advantage. An experienced real estate agent can guide you away from making rookie mistakes.
If you have the time, marketing savvy and people skills, a for-sale-by-owner聽transaction may be for you. But if you decide to hire a real estate agent, interview at least three contenders to find the right fit.
Pricing your home
When determining the list price of your home, you鈥檒l want to give yourself a little cushion for negotiation, unless you live in a hot seller鈥檚 market. There also will be some expenses, including a broker鈥檚 commission of 3% to 6%, to deduct from the proceeds of the sale.
Pricing your home is as much art as science; it鈥檚 a delicate process. researchers studied聽information聽on more than 12 million home sales in the past five years and found that homes for sale get five times more visits on the very first day they鈥檙e listed than they do a week later. That means if buyers believe your home is overpriced from the start, they may not decide to take a second look.
And Redfin says cutting the price later may not be helpful, since just-discounted homes get half as many views as newly listed properties.
Even if you go it alone without an agent, you鈥檒l have marketing expenses聽(signs, fliers, listing costs, photography, etc.) and any closing costs that you are willing to offer in order to motivate potential buyers.
Listing and marketing your home
You鈥檝e probably noticed homes that have a little extra sizzle in their online listings, with photography that really pops and descriptions that are easy to read and packed with info.
The value of professional photography cannot be overstated.
The value of professional photography cannot be overstated. Redfin鈥檚 survey reveals that high-quality images, shot by a professional with the right lenses and lighting, can sell for an average of $3,400 more 鈥斅燼nd up to three weeks faster 鈥斅爐han home listings featuring lower-quality photography.
You might consider holding an open house to bring traffic to your home. While pros often debate the usefulness of such events, Redfin found homes with an open house in the first week of their listing sell for about 2% more and are more likely to sell within 90 days than homes offering open houses after the week of their listing debut. However, the report says it鈥檚 likely that the relationship between sales success and an open house during the first week of a listing has more to do with pricing and local market demand.
One final, and intriguing, nugget from the Redfin research: Homes listed for sale on Thursday perform better. They鈥檙e more likely to sell for bigger money 鈥斅爀ven above list price 鈥斅燼nd sell days faster than homes listed on any other day of the week.聽But just聽18% are actually listed聽on Thursday.
Making a deal
With or without an agent, you鈥檒l need to make your home available for an appraisal and an inspection 鈥� and, of course, showings. Contingencies 鈥� those 鈥渋f-then鈥� propositions 鈥� can be tedious: 鈥淚f you fix this, then we鈥檒l buy your home.鈥� Contingencies are market-driven factors. Generally, the higher the housing demand, the fewer conditions are placed on a sale.
In fact, all of the finer points of negotiating with prospective buyers can be time-consuming and patience-testing 鈥� and this is where good real estate agents really earn their keep.
Some of the last-minute details you may need to deal with can include deciding whether you want to trigger a 鈥渞ent-back鈥� agreement from the new owners in order to allow you time to complete the purchase of your new home and prepare for the move.
Making the move
After all the effort it takes to sell your house, perhaps the most frantic period could be when it finally comes time to relocate. Coordinating movers, packing and handling a change of address 鈥� it all requires a lot of attention to detail.
But after it all, there is some good news: the payoff. Once you sell your home, the IRS generally allows you to take up to a $250,000 gain on the sale, tax-free. If you鈥檙e married and file jointly, double that to $500,000. The bad news? Selling your house for a loss is not deductible.
Hal Bundrick is a staff writer at NerdWallet, a personal finance website. Email: hal@nerdwallet.com. Twitter: .This article first appeared at .
