Here are the three key things to learn on how to sell a home:
Price, location and condition.
You can’t change the location of your property, but you can choose its price and condition.
Assuming you will be working with a real estate agent, you need an agent who will give you honest advice on your home’s listing price and what your property needs to make it wow a buyer the moment they walk through your door.
Most buyer’s impressions are made within 10 seconds of entering your home, so it is crucial that it looks its best.
The majority of showings by buyer’s agents on a new listing occur when the house is first placed on the market. Sales agents bring their active and qualified buyers to see a home when it is newly listed.
If your property is over-priced during this initial viewing, the potential buyers will not see the value of your home as compared to the competition.
These potential buyers will quickly move on to the next property in hopes of finding that desired value. In most every case, these buyers will not return to your home even if the listing price is later lowered.
Once the initial groups have seen the property within the first few weeks, viewing activity begins a drastic downturn and becomes limited to only those buyers new to the market.
Your optimal time to successfully show and ultimately sell your home is in the first few weeks while viewing activity is at its peak.
If the fatal mistake of over-pricing and later correction is made, almost 90% of your potential buyers have already moved on.
Establish the correct market-acceptable listing price at the beginning and you radically increase your chances of a successful and quick sale.
The insights we shared here on how to sell your home are based on our own professional experience selling real estate.
Top 10 things you need to do before you sell your home
You asked: What to do before selling my house?
Our answer: Here are our top 10 suggestions on what to do before you sell your home.
1. De-Clutter: Remove
Since you’re going to be moving anyway, now is a good time to get rid of unwanted and unused items. Many homeowners tell us, “how much “stuff” we accumulate through the years”.
By getting rid of these items now, your home will be better organized and much more apealing to buyers. Plus, you’ll have much less to move and you’ll be starting life in your new home on a clean slate. Give some items away to friends and family.
You could also get rid of or sell household items you no longer need through a garage sale, online on Craigslist, Facebook Marketplace, etc.
Or you may also want to donate any bulky or heavy furniture/clothing/items you no longer use for charity organizations to pick up from your home.
2. Address health and safety items
- Test and Install GFCI in kitchen and bathrooms if missing.
- Address any water leaks, dripping faucets, or sink stoppers/diverters if they no longer hold water.
- Install smoke detectors on each floor with 10 year battery life.
- Install Carbon monoxide detectors on each floor and near bedrooms.
- Replace non-functioning light bulbs.
- Make sure that the water heater is properly strapped to the wall.
- Remove any trip hazards in your homes such as items laying on floors, etc.
- Remove any extension cords used where permanent wiring is required by building codes.
- Exterior or landscape lighting should be in working order.
3. Make General Repairs
- Fill in holes (and nail holes from removed photos and art) in walls.
- Re-caulk counters in bathrooms and kitchen, and also around tubs/showers
4. Remove things in your home that make it look outdated
- Remove old wallpaper, old fixtures, old electrical switch plates and sockets
- Install new exterior hardware such as door kickplate, mailbox, house numbers, etc.
- Match kitchen appliances, or replace old ones with new kitchen appliances.
- New kitchen cabinet hardware.
- Bring a bathroom into this millennium. There are bathroom remodeling tips that are not that costly as suggested by Consumer Reports. Here are some of their suggestions:
- Add a new mirror and faucet (note: brass is no longer in favor). Alternatively, keep your current vanity but replace your toilet and faucet and add a new flooring.
- Update towel bars, hooks, toothbrush and toilet paper holders, and cabinet hardware. Add matching shelves for your towels and toiletries.
- Replace pink toilets/ pink bathtubs (or resurface bathtubs with new color)
5. Flooring: Carpet replacement or professional cleaning
6. Paint: Paint the interior of the house in neutral color to make it look light and bright
7. Exterior and Landscaping Crank up the curb appeal:
- Your front door should look brand new. If it doesn’t, repaint or replace it.
- Make sure that the porch light works and that it is bright enough to illuminate the entryway.
- The entryway should be free of debris and spider webs.
- A few colorful pots of flowers will brighten up any entry.
- Purchase a new welcome mat.
- Front yard landscaping spruce-up or makeover.
- Power wash the exterior of your home including exterior hardscape.
- Exterior paint if needed.
- Paint or install a new garage door.
- Apply sealant on any hardscape surfaces in the outdoor area.
- Re-sod any grass area with brown spots.
- Remove dead plants and replace with new plants/flowers.
- Make sure that all sprinklers are working and water often to “green up” your plants.
8. Windows & Doors
- Replace any broken windows/glass.
- Replace any torn screens.
- Paint or install new trim (shutters, eaves, etc.).
9. Professional cleaning of the entire home.
10. Staging the home
Related Articles on How to Sell Your Home
Get appraisal and home values questions answered such as, How do appraisers arrive at a home value? How do appraisers select comps? How to increase the value of my home? What are my options if the home appraisal is less than the purchase price? How to prepare for an appraisal? How does the appraisal process work?
Learn more by watching the 6 minute video below on appraisals and home values. Please fill out the contact request below if you would like to know what your home is worth these days and get tips on how to increase the value of your home. We are happy to provide you relevant information on one of your most important financial assets- your home.
How to Correctly Price a Home
Establishing the correct Fair Market Value for your home at the time of listing is crucial to a successful sale
Pricing Your Home Correctly Starts Here
Your home will be in direct competition with other nearby homes offered for sale. Home sellers sometimes forget that buyers look at more than just their house during their search. Because buyers look at so many homes, they become quite adept at comparing and contrasting the properties they have seen.
Timing is of extreme importance in the real estate market. The majority of showings by buyer’s agents on a new listing occur within two weeks of when the house is first placed on the market. Buyer’s agents bring their active buyers to see a home when it is newly listed.
If your property is over-priced during this short optimal period, these potential buyers will not see the value of your home as compared to the competition. These potential buyers will quickly move on to the next property in hopes of finding that desired value. In most cases, these buyers will not return to your home even after the listing price is lowered.
Once the initial buyers have seen the property within the first few weeks, viewing activity will slow and become limited to only those buyers new to the market. Your optimal time to successfully show and ultimately sell your home is in the first few weeks while viewing activity is at its peak. If the fatal mistake of over-pricing and later correction is made, almost 90% of your potential buyers may have already moved on or have already purchased a home.
By establishing the correct Fair Market Value at the start you radically increase your chances of a successful and quick sale.
Home Values are Based On the Comparable Properties that Have Recently Sold Nearby
A baseline is arrived at by comparing your home to the recently sold homes nearby. Comparable means that the sold homes being used are similar in a number of ways: number of rooms, home and lot size, age, condition, upgrades and amenities. The more similarities and the more recent the sale, the better the comp. Not every home is the same. Therefore, adjustments must be made, upward and downward, to arrive at the final price that the market will bare – what we call the home’s Fair Market Value.
Arriving at Fair Market Value is Crucial for Two Reasons
This must be yours or agent’s area of expertise. Your agent should provide the most current and local home sales data to help guide you to your home’s fair market value.
ONE: We all want our homes to sell quickly and for the maximum amount possible. Arriving at your home’s Fair Market Value is what will allow you to do that. A home that is priced at Fair Market Value will attract more attention from home buyers, and can lead to a multiple offer situation.
TWO: Buyers requiring a loan to purchase your home will necessitate a formal appraisal by their lender. The lender wants to be sure that the loan they will be providing is being done so at a fair price, in the event that a default would occur and they would end up with the property.
If the appraisal comes in below the agreed upon purchase price, it can present a problem. The lender will only loan up to appraisal value. There are a few things that could occur:
- The home buyer could make up the difference between the appraised price and the purchase price in cash
- The home seller could lower the price of the home to appraisal value
- The buyer and seller could meet somewhere in the middle
No one wants to go through this after it seemed that “a meeting of the minds” had occurred. This adds friction and could possibly make what was up until now, a smooth transaction fall apart. It is much better to get the price right at the beginning.
How to sell a home and keep out of court
We live in a litigious society and it is important to know what your duties and obligations are as a home seller when you sell your home.
Here are a few tips when selling your home to keep you out of court.
Your Duty To Disclose Material Facts to the Home Buyer
Be sure to disclose to the buyer any material facts about your home that affect its value and desirability. Carefully fill out all home seller disclosure forms, for example, the Transfer Disclosure Statement and Seller Property Questionnaire. Provide all required disclosures to the buyer to assist them in making the right decision whether they want to buy your house or not. Be sure to have the buyer sign and acknowledge these disclosures.
Be accurate with the information you provide about your home, which your agent inputs on the Multiple Listing Service (MLS).
Also, put in writing the items that are excluded from the sale of your home.
Spend the time with your agent to go over disclosures and forms before signing them. Pay attention to your duties and obligations as a home seller. Read the Statewide Buyer and Seller Advisory Disclosures.
Any form that you and the buyer sign are all legally binding contracts. Be sure to read and understand each document before you sign.
Consult a real estate attorney on any document that you do not understand.
Handling Offers, Multiple Offers, and Back Up Offer
Make sure that you understand the contractual terms that go along with the offer before making any binding agreement. Do not focus on purchase price alone.
Verify that the buyer can close on the home (get proof of funds, pere-approval letter, etc) before entering into a signed purchase contract agreement.
Do not enter into an agreement with no earnest money deposit from the buyer.
Know when it is safe to cancel escrow with the first buyer you are in contract with, and activate the back up offer.
Understand the property way to handle multiple offers and back up offers. Use the correct forms and be sure to sign in the right sequence in the delivery and acceptance of offer forms.
Fair Housing Laws
Know and understand the Fair Housing laws and comply with them.
How to buy and sell a house at the same time
Is it possible to seamlessly buy and sell a home these days, get a good deal, and with great timing? Yes, of course, once you understand the process well and act on the right expectations. Let us help you explore your options on how to buy and sell a house at the same time below.
Buying a house and selling another at the same time is a typical chicken-and-egg scenario – “which comes first, the buy or the sell?”
1. Buy the House First
If you are afraid of being “homeless” and want the security of having a place to move to, then buying a house first will alleviate your concern. This strategy is good for those who do not want to move twice or rent in the meantime (i.e. in a situation where your house sells first).
Financial Strategies to buy a house first:
- Pay all cash
- Get pre-approval and obtain a mortgage to buy the new house (the mortgage gets paid off once the current house sells ). Note that the average minimum down payment to buy a house these days is 3.5% of the sales price.
- Short on cash? Borrow money from family or borrow temporarily from a 401K then pay it back once the house sells or withdraw money from an IRA if you are 59 and half and return within 60 days. Please consult your tax advisor to discuss tax liability and any penalties.
- Negotiate and get an owner financing to buy the house from the seller (then payoff the mortgage once your sells). This strategy requires that the seller of the house has the ability and willingness to carry a note/ keep the mortgage on the home that you are buying (rare situation but worth it to ask).
2. Sell a house and buy another house at the same time.
From experience, many would-be buyers put their house on the market and accept an offer to sell their home first while they concurrently search and make offers on a suitable replacement home.
If you have a house to sell, at the very least, decide to list your house and start marketing.
Strategies and tips to sell and buy a house concurrently
On the Buy Side
- Get pre-approved for a mortgage before shopping for a home. (Sellers consider offers without a pre-approval letter incomplete.)
- Get in touch with a buyer’s agent in the area where you would like to buy. In case you need a lender, the agent can also recommend a lender so you can get your loan pre-approval started.
- Prepare for a time frame of around 60 days from the date your offer is accepted to get the loan and get moved in.
- See our special tips on writing offers as a buyer when you also have a house to sell (learn from our experience in representing both buyers and sellers).
Wearing home buyer and home seller hats (one at a time, or at the same time)
Buying and selling a home at the same time requires that you wear two hats – one as a home buyer and another as a home seller. As you experience the process from both sides, you will literally be forced to look at the process from both sides of the coin. It is a real eye opener to see how people act and react and make decisions when acting on two roles – as a home buyer and a home seller at the same time. We consider having insight on both perspectives as an advantage to make wise decisions to make your move smoother.
If you have the correct expectation from the very beginning and have a great real estate team behind you, you will learn to respond to situations with great understanding of the process of selling and buying at the same time.
On the Sell Side
- Interview at least 3 real estate agents face to face before committing to one. Many make the mistake of hiring the first agent they are introduced to.
- Prepare your house to sell – make your home presentable (or staged) before putting it officially on the market.
- Negotiate each offer not solely based on price but also terms and timing.
- See our tips on negotiating offers when selling your house while you are looking to buy a house.
Tip: Buy yourself some time and lessen your moving stress
Negotiate a “rent back” period on the sale of your home. When you find a buyer, have your real estate agent get the buyers to agree to allow you to stay in the home for an additional days after the close of escrow. You will likely pay the new homeowners rent – enough to cover their mortgage, insurance, property taxes and homeowner association fees. This can give you a little extra breathing room when trying to organize a household move.
Keep an open mind on the possibility of renting after you sell (so you do not feel pressured to settle for a house that you might regret later on)
Extra: Practical moving tips to consider
Hire a mover, or hire “Storage Pods”.
If you hire a mover to bring your belongings to your destination, they’ll likely store them for your for a period of time until you can move them into your new home. Same with the Pods. You would pack these with your possessions and then the Pod company would transport them to your local destination store until you could move them into your new home here.
Identify a short-term rental home for 30-90 days just in case. You are likely to pay a bit more per month for a short-term rental. But at least you’ll have the comfort of knowing that you’ll soon be moving into your permanent home.
If you are upgrading the home you are buying based on your own preferences, consider scheduling for the work to be done first before you move in.
Here are the Top Reasons For Selling a Home
Here are the top home seller motivations on selling a house:
- Time/Price was right to move up
- Interest rates are not going to get any better
- Financial Difficulties/Cannot afford to keep the house
- Could get the maximum price/value for our home
- Desired larger home
- Changed jobs/location
- Home not worth what we owe
- Home worth more now
- Job Loss
Sell Home or Rent Home?
In our ever-changing real estate market, many homeowners are deciding whether to sell or rent their home.. Their options include cashing in their equity from their home, then possibly rent in the meantime, or buy another home that fits their needs better such as buying a smaller or larger home, being in a better neighborhood or school district for their children, or having a closer commuting distance to work.
Many homeowners who are currently underwater, or near underwater on their mortgages, make selling their current home problematic since it would leave little to no capital in their pockets. And a short sale may be in order if making a move is the only option. Many are also benefiting from an increase in home prices which we have seen recently and allows homeowners to realize the profits they have made on their homes.
Renting Your Home
Rents are Increasing
While potential home sellers are contemplating what they should do, the rental market is moving upwards. Monthly rents are increasing and rental unit inventory is low, creating demand for more units. This makes the option of renting your current home more attractive as the possibility of positive cash flow a real possibility.
Extra Monthly Income
Because of all of this, many potential home sellers are considering offering their home as a rental and becoming landlords for the first time to avoid selling for a loss. This can be a great option for homeowners and even provide them with some extra income each month. A good plan of action is to rent the home until appreciation reaches a level where the homeowner can sell that home and make a fair profit.
The strategy of renting your home vs. renting may save you time. You can avoid the sometimes lengthy process of marketing and selling a home. If you find a tenant quickly, it can relieve the added burden of paying two mortgages at the same time.
Keep Your Options Open
By renting instead of selling the home, you also keep your ties to the neighborhood and have the option of returning to the home in the future if you so desire. Finally, you may also have an area of your new rental property that you might reserve as your personal storage space.
A homeowner does not have to take on managing the property on their own. There are many competent property management companies who can manage the entire process of dealing with the property and the tenants. If you’re not comfortable or willing to receive calls from tenants at night, a professional property management company could be a good solution for you. Customary rates for property managers are from 8%-12% of the monthly rental fees, plus some initial set up and marketing costs.
However, becoming a new landlord is not without its pitfalls.
Your Capital Could Be Tied Up
First and foremost, the homeowners capital in the rental property will be inaccessible. This may cause you to borrow more than you might have for your new property. You may also have less cash in hand to upgrade or make repairs.
Qualifying for a New Loan
Renting your home could make it more difficult to secure a loan for the new home you would like to buy. Different lenders have varying requirements in this situation. At the very least you will be required to produce an executed lease and proof of receipt of their security deposit. Some lenders even require that the home be rented out for a minimum of one year before they will consider the rental fee as income for you.
New landlords will likely incur additional costs to update and make repairs to the rental property. Fresh paint, new carpet and thorough cleaning, etc are common expenses that you may experience. New tenants may ask you to repair items in the house that never troubled you. California also has minimum safety standards in place that will require you to have smoke and carbon monoxide detectors throughout the home.
Stress will be unavoidable. New landlords will always worry about something going wrong with the rental property or the tenant. Plus, it may seem odd to think of strangers living in “your house” at the beginning. A common worry is that the new tenants will not take care of the home. Or, that a negative event might cause them to stop paying the rent.
Increased Home Insurance
Your home insurance is likely to increase since the property is no longer your primary residence. Budget for at least a 25% increase in your homeowners insurance.
Landlords may also incur legal fees. Evicting a tenant or dealing with other legal disputes require the guidance of an attorney.
Regardless of the condition of your rental property, there will always be ongoing maintenance. Drains, garbage disposals and toilets may become clogged. Automatic garage door openers may stop working. GFCI outlets could fail and need replacing. In most cases the financial burden to repair these items is on the landlord.
Homeowners association rules must still be followed by the tenant. Always keep your tenant up to date on new HOA rules. If they are not aware of the rules or do not follow them, the HOA is within their rights to place a monetary penalty against the property. If the tenant refuses to pay a fine, ultimately the landlord must take care of it to avoid a lien being placed against the property until the fine is settled.
The landlord’s taxes could increase due to the status of the home changing away from a primary residence. Most homeowners who live in their homes as a primary residence have a homestead exemption filed for the property. Homeowners cannot have more than one homestead exemption in place at one time. So, it is likely that the taxes will increase on the rental home.
If you have not lived in the home for at least two of the past five years, you could be responsible for paying capital gains on the profit of the property when you finally sell it.
If renting your home is a perfect solution for you in 2014, go ahead and make a move to get this done. Once you rent your home, you now have a choice of either buying your replacement home. Perhaps you do not intend to be a long term landlord. If you are waiting to see your home appreciate in value, then you may want to find out what your home is selling for now and also weigh the option of avoiding being a landlord in the first place and get a clean slate and get the house sold first.
Here are Your Next Steps
Knowing what your home is currently worth is a good starting point. As a complimentary service to our clients, we provide a home value report, which will show you the current real estate trend customized to center on your home in your neighborhood. If considering renting, ask local property managers for market rental comps to determine rent in your area.
Does selling your home make more sense than renting?
Find out what your home is worth
Contact a Professional Real Estate Team
Whenever you are considering selling your home, it is wise to speak with a real estate professional. A professional agent team will listen to your unique situation, without obligation or pressure, and advise you honestly on the best options to assist you.
Choose Your Agent Team Wisely
When choosing a professional real estate agent Team, it is a good practice to seek those who have good past seller client reviews. You should also choose an agent Team who focuses on a small geographical area so that they will have an intimate knowledge of the community surrounding your home.
If you are considering the possibility of putting your home on the market for sale, we would love to hear from you. Please contact us below.