How to Sell Your Home
Once upon a time, the real estate market was simple. Potential purchasers looked at homes, found one they liked, made an offer, got a mortgage and completed the purchase. In some parts of the country it was a buyer’s market, meaning there were more homes for sale than there were buyers. Other parts of the country were a seller’s market, meaning few homes were for sale and sellers had the advantage.
Today, the rules have changed. Most of the country is a buyer’s market, but that hardly describes the reality of the situation. Homes may be listed for sale for months – or even years. But once a prospective buyer makes an offer, it’s not a done deal. If it’s a short sale or foreclosure, the bank may have to green-light the sale. And the purchase may be contingent on the buyer getting a mortgage or selling his existing home – neither of which is a sure thing.
With that in mind, here’s what you need to know if you want or need to sell your home.
Real Estate Agent, FSBO or Hybrid?
One of the first things you need to decide is how you want to sell your home. You have a few options:
- Hire a real estate agent to list and advertise your home, show it to prospective buyers and handle purchase offers
- Sell your home without the assistance of a Realtor (known as for sale by owner, or FSBO), meaning you’ll handle all aspects of the sale, including marketing and showing the home
- Work with a real estate company that offers some sales assistance, but not all of the services of a full-service agency
There are advantages and disadvantages to each option, and what’s right for you may not be right for another home seller. In making your decision, consider:
- Will you be living in the home (or in the area) while your house is on the market? If you’re relocating out of town, the FSBO option probably won’t work for you.
- Are you comfortable doing the legwork to advertise your home, host open houses and give home tours to prospective buyers? If you’re selling your home yourself or taking the hybrid approach, you need to be confident in your sales and marketing skills.
- Can you afford to spend money up front to sell your home? Can you afford to pay a real estate agent on the back end? Typically, the FSBO or hybrid approach will cost some money upfront. However, you’ll probably pay more in the long run for a full-service real estate agent.
If you decide to hire a full-service real estate agent, interview several, ask for references, have each prepare a competitive price analysis and get a copy of the listing agreement. Then do a side-by-side comparison of what each has to offer. Whose price analysis is most realistic? Which listing agreement is the best for you? Which agent made you feel most comfortable?
Stage Your Home
If you’ve ever watched a home show on TV, you know that "staging" is an important part of the home sale. Staging involves several elements designed to make your home as appealing as possible to potential buyers. These include:
- Giving your home curb appeal. When a potential buyer drives past your home, will he want to come inside? Is the house well landscaped or does it have peeling paint and leaves in the gutter?
- Declutter and depersonalize your home. A potential buyer needs to be able to picture himself living in your home, so remove overly personal items. Also, do everything possible to make your home appear spacious, even if it means getting rid of furniture and emptying closets. A rented storage space may come in handy.
- Get rid of "funky" decor. Your home should be attractive, but not wild. You want potential buyers to think, "I could move in tomorrow." If, instead, the buyer’s thinking, "I’d have to repaint these purple walls and replace the green carpets," you have a problem.
Price Your Home
Before putting your home on the market, you must decide how much to ask for it. Most sellers have a few numbers in mind: The asking price, the price they’d ideally like to get for the home and the lowest possible price they’d accept.
Usually, these three numbers are different, and may be tens or hundreds of thousands of dollars apart. If you’re eager to sell the home, there may not be much spread between your top and bottom number. (Similarly, if you have unrealistic expectations, there may not be much difference between your high and low numbers.)
If you’ve talked to real estate agents, the competitive price analysis will come in handy when deciding how much to ask for your home. And if your home is a short sale, you’ll need to work with your bank’s loss mitigation department to make sure they approve of the sale.
Once you’ve decided how to sell your home, selected a real estate agent (if appropriate), staged your home and set a price, then you’re ready to move ahead!
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