Home-Selling 101

Well, the time has come. Farewell, old home. It’s on to bigger and better things. But how does this process begin? Where do you even start? What are your options?

 

Your First Decision

 

You really have just one decision to make when you decide to sell your home - do you want to try to sell it yourself? Or do you want to enlist the help of a REALTOR®?

  1. For Sale By Owner (FSBO) - You may remember from when you purchased your home that you did not have to pay a commission for your REALTOR® - that’s because the seller did. Typically, the seller will pay the commission for both the seller’s agent and the buyer’s agent. This is usually 6% of purchase price - 3% for each agent. Having to pay 6% in commissions is by far the most common reason homeowners decide to sell FSBO. 

  2. Using a REALTOR® - So are you losing money by hiring a REALTOR®? The statistics would indicate that, if you have the right REALTOR®, you’re probably actually making more money. A REALTOR® has access to far more resources to market your home and get it in front of the most eyes. Access to a Multiple Listing Service (MLS) broadcasts your listing to hundreds of home search websites, including Zillow, Trulia, RedFin, and many more. Additionally, most REALTOR®s will pay professional stagers and photographers to present your house in the best possible light, as well as paying for advertisements on social media. A REALTOR® will have local knowledge and insight on how to best prepare and price your home so that you can get the maximum price possible. This price is often more than an individual could have gotten if selling FSBO, even when subtracting the commission.

 

Preparing Your Home

 

Whether using a REALTOR® or not, the following can be beneficial in making your house the most presentable and generating the most interest, leading to the most money.

  • Curb appeal - When buyers pull up to tour your home, the outside gives them their first peek. What impression will this leave on them? Make sure the grass is cut, the landscaping is done, and all walkways/driveways are cleared of snow or other debris.

  • Paint color - Many buyers will realize that if they don’t like a paint color, they can easily and cheaply change it. However, this may subconsciously affect their feeling about the house, and some may outright prefer to not put in the work. To appeal to the most buyers, stick with neutral colors overall, making sure nothing is too offensive.

  • Small home repairs - A little effort can go a long way. Make sure to replace any burnt-out bulbs, repair any small drywall defects, replace any missing trim, etc. If you’re not handy, hire a handyman - this could cost you a few hundred dollars up front, but earn you thousands in return!

  • Clean, clean, clean! - You could have a gorgeous home and if it’s covered in dirt and debris, no one would know! Make sure your house is in the best condition it can possibly be when preparing for photographers, showings, inspectors, and appraisers.

  • Larger items - Three of the top things inspectors (and buyers’ agents) will look for are the roof, the water heater, and the furnace. Make sure you know the condition of these items and if there are any small updates/repairs you can make, do them. Buyers would love for all three of these to be brand-spankin’ new, but if they’re not, don’t worry! Just be upfront about it so there are no surprises later on down the road.

 

Marketing

 

When you partner with a REALTOR®, there are several steps he or she will take to ensure your home gets the maximum exposure and is viewed in the best possible light. For instance, I provide the following:

  • Professional photography - I hire a professional photographer to come out, photograph the entire inside and outside of your home, edit the photos, and create blueprints. This is especially important for reaching online viewers, which is where the majority of buyers first see your home.

  • Professional stagers - If necessary, I hire professional stagers to come arrange furniture in a way that shows buyers the fullest potential in your home. This can be especially useful if your home is vacant.

  • Social media - In addition to my hundreds of followers on my Facebook and Instagram business pages, I also have access to paid ads, which specifically target buyers who may be interested in your area.

  • KWLS - Putting your listing on the Keller Williams Listing System not only broadcasts your listing to those affiliated with KW, it also automatically blasts it out to hundreds of home search sites, such as Zillow, Trulia, RedFin, realtor.com, and many more. With the majority of buyers looking for their home on one of these sites, your listing is sure to get in front of interested eyes!

  • Database - Believe me, everyone I know will know about your listing! I will send out an email campaign to my entire database, which spans hundreds of people, many of whom are fellow REALTOR®s with buyer clients. And who knows? A friend of a friend might just be interested! 

 

If you are not working with a REALTOR®, you can still execute several of these marketing ideas yourself. Just keep in mind that you will be paying for them out of pocket, and the results will not be as far-reaching if you’re going it alone.

 

Showings

 

Showings are where most buyers decide they actually want to put in an offer. Sure, they may decide they have interest in it online, but seeing it in person is usually what seals the deal. Be aware that times are a little different now than they used to be, in light of COVID-19. Luckily, we are allowed to have showings again, but under much stricter rules. 

  • Private showings - Currently, only 4 people total are allowed to be in a house during a showing. This will likely need to be the buyer’s agent and up to 3 buyers. Showings may not overlap. The level of PPE (personal protective equipment) is to be determined by you, the seller. Face masks, hand sanitizer, don’t touch anything in the house? You got it. Luckily, many buyers’ agents are already abiding by this stricter code, themselves.

  • Open houses - As of now, open houses are not allowed. There may be a time in the future, perhaps after a vaccine is developed or the novel coronavirus is more controlled, when we can have them again. When they are allowed, it will be up to you as the seller whether or not you want to have one. If a REALTOR® is involved, typically this will require you to leave for a couple hours during the open house, so that buyers can freely and openly discuss their thoughts on the house.  

 

Contract to close

 

After you’ve received an offer (or offers, if you were fortunate enough to have a bidding war!), there are several steps you need to take to make this dream a reality. 

  • The offer(s) - Your REALTOR® will read over any purchase agreements and explain the details to you to make sure you are getting the best deal possible, but the choice of whether to accept or reject each offer is ultimately yours. You have three options here:

    • Accept the offer on the terms the buyer proposed.

    • Counter the offer with a few of your own modifications.

    • Reject the offer.

  • Under contract - Once you have an accepted offer, you are considered “under contract.” The buyer will have deposited an Earnest Money Deposit (EMD) to be held by a third party. This is your assurance that the buyer will not walk away “just because.” If they do, you get to keep this money.

  • Inspection - Unless they wrote more aggressive terms to make their offer more competitive, buyers have 10 days to order an inspection on your home. This is to assure the buyer that there is nothing majorly wrong with the home. If inspections come back objectionable, the buyer can open the contract back up for negotiation. Here is another spot where having a REALTOR® comes in handy. You may need to fix whatever is wrong or accept a little less money in order to keep the deal going. Your REALTOR® will do their best to negotiate a deal that appeases the seller but still affords you the best result possible. Of course, every decision is ultimately yours! Your REALTOR® will not put anything in motion without running it by you, first. If you’re selling your home FSBO, here’s a great opportunity to test out your negotiating skills!

  • Appraisal - After your house has passed inspection, the buyer’s lender will require an appraisal (unless they’re buying using all cash - then you may get to skip this part!). An independent appraiser will evaluate your home by touring it, taking some pictures, and comparing it with similar houses in a similar area. Afterward, they take a few days to make a report and come up with a price. If this is the price the buyer offered or higher, great! Time to move on. If it’s lower, your REALTOR® will need to do some more negotiating with the buyer to find a compromise.

  • Underwriting - Now, we wait. The buyer needs to get the final approval from the underwriter to make sure the lender feels comfortable with covering the mortgage. The underwriter will likely ask the buyer for additional documents, have questions, and go back and forth a little bit. Meanwhile, we wait. Unless the buyer got fired, had a major life change, or decided to blow their savings on a yacht, s/he should pass underwriting no sweat.

  • Clear-to-close - Hooray! Clear-to-close = good-to-go. At this point, your REALTOR® will coordinate with the other agent things like key exchange and when exactly the closing will occur.

  • Closing - This is the fun part. You’ll go to a title company, where a closing agent will point out where you need to sign on a small stack of documents. Then, assuming the buyer had their closing before you did, you get to walk away with a nice check (or direct deposit, as some companies offer).


 

That’s it! You did it! Congratulations on selling your house, and best of luck moving forward!