HomesIndex.com Home Selling Guide

If you’re thinking about selling your home, you’ve come to the right place! This guide is designed to help potential sellers evaluate their situation, decide whether to sell their current home, and get the most from the sale.

Should I sell?

Sometimes selling a home isn't optional. However, in many cases homeowners don’t have to sell their current home. Some families are just looking for an updated or larger home. Some simply dislike their neighborhood. Some believe that moving will help them get out of debt.

In these cases, selling is very often not the best option. Sellers must pay for repairs and 7%-10% of the home’s sale price in realtor commissions, taxes and closing fees. Add estimated marketing and moving costs to that figure. Get remodeling estimates to see if you’d be better off staying in your current home. Also consider whether your home is worth as much as when you purchased it. In today’s market, it may be worth less. Any drop in market value will come straight out of your pocket at selling time, which can negate the benefit of using your home’s equity to pay off debt.

Consider selling as a three-part expense: Selling, moving, and buying another property. Each has associated costs which add up quickly.

What would my home sell for?

Choosing an asking price is part science and part art. Many markets are currently overstocked with inventory. How do you get your home to stand out? Start with two important considerations.

  • Comparables. What have similar homes in my area sold for recently? This will give you a good idea of what the market would pay for your home. What are comparable actively-marketed homes in my area listed for? Slightly less important than recent sales information, because this only tells you what homes are not-yet selling for.
  • Features. What makes your home more or less attractive than the comparable homes? If you were buying today, what would be your most important criteria? Large yard? Close to a highway? Nearby park? Better neighborhood? How does your home rate on those criteria vs. the competition? You’ll need to adjust your asking price accordingly.

A good source of free, no obligation information for comparables is any website with active MLS listings. Search for homes with comparable square footage, bedrooms and bathrooms in your local area. Emphasis should be on your own neighborhood where possible. If there aren't similar homes for sale in your own neighborhood, nearby homes of similar size can be a starting point. Remember to adjust your home's worth relative to the other listings location and features.

Repairs, Improvements and Remodeling

After a quick analysis of comparables and their features, it's time to begin considering repair, improvement and remodeling costs. In the current buyers market, repair items almost always need to be remedied before the home is marketed for sale. Buyers have many choices on homes in excellent condition. Most buyers will simply not consider purchasing a home in need of repairs.

In order to determine what needs repairing, we recommend having a professional home inspection completed. The home inspector will identify problems which can be fixed before any potential buyers ever see them.

Selling in a buyers market means lots of competition from other sellers. What makes the comparable listings stand out? Do they have new kitchens and updated bathrooms? Do you have carpet while your neighbors all have hardwood flooring? Getting a good offer for your home might require selective upgrading. It can be difficult to decide which upgrades will return the most on your investment. Real Estate professionals are excellent sources of this information. They will know what buyers expect and demand. Finally, be careful not to upgrade beyond the norms in your neighborhood, as you are very unlikely to recoup the premium costs at sale.

Should I hire a real estate professional?

HomesIndex.com recommends working with a listing agent to secure the best marketing, fastest sell time, and highest sell price possible. Listing agents are real estate agents that have access to the real estate multiple listings system (MLS) and will list your property which buyers’ agents can then search. A listing agent (seller’s agent) will charge a commission if they successfully find a buyer for the property. Typically, this commission is 6% of the sales price. If a buyers’ agent brought the buyer, your listing agent will split the 6% commission with the buyer’s agent.

How to choose a real estate professional

When shopping for an agent, HomesIndex.com recommends that you find and agent that:

  • Has successfully sold homes in your neighborhood
  • Is well connected in the community with years of real estate experience
  • Understands your situation and needs
  • Has a high average-list-price-to-sales-price ratio (sells homes at or near original listing price)
  • Has a relatively short listing-to-sale time
  • Has glowing references

Once you find an agent you are comfortable with, they will ask you to sign a legal agreement which covers the basics of your relationship. This includes the right to a commission if a buyer is found, exclusivity agreements and termination clauses.

Types of listing agreement include:

  • Exclusive agency listing: authorizes only one agent (broker) to find a buyer. If the seller finds a buyer, the broker is not paid a commission
  • Exclusive right to sell listing: No matter who finds a buyer during the contract period, the broker is paid a commission
  • Open listing: nonexclusive agreement in which any broker who finds a buyer is compensated. Because there is the possibility of many brokers actively working to sell the property and chance of commission is lower, most will not put effort into the sale.

It's time to sell!

When the decision has been made to sell, it's time to formulate a plan of action. In most situations, hiring a real estate professional makes sense. Agents should make the process of selling faster, easier and can help you get top dollar. Remember the tips listed in the "How to choose a real estate professional" section. Have a meeting with your agent and listen to their guidance. Agree on a listing price based on their professional market research. Go over their list of requested repairs and value-adding remodeling ideas.

Repairs

If your agent recommends updates or repairs on your home to help it sell, now is a good time to complete them.

Walk-throughs

Once an agreed-upon asking price is reached and repairs completed, your broker will list the home on the MLS system and market the home for sale. Prospective buyers will want to walk through the home. Your broker may want to hold an open house event. You’ll want to keep the home clean and yard trimmed during the sales process. Cleanliness can make a huge difference on a walk-through! Also consider reducing clutter and personal items/pictures. This helps buyers envision themselves living in your home.

Offers

When a potential buyer likes your home and decides to make you an offer, several events are set in motion. First, work with your broker to prepare seller disclosure documents detailing the physical condition of the home, health and environmental factors, and legal status of the property. Next, you’ll review the offer price, terms and contingencies. Try to think objectively and not emotionally if the buyer offers an amount lower than your asking price. Especially in a buyer’s market, you’ll need to use this opportunity to make a tough decision to accept or submit a counteroffer. Is the buyer serious or casual? Do they have the financial ability to actually purchase the home? What contingencies did they place on the offer? Could accepting this offer hinder your ability to sell to another willing buyer for long periods of time? Again, your broker will walk you through the contingencies and offer their advice.

If you are not willing to accept the offer, change the terms and submit a counteroffer.

Accepting an offer

Once both parties have accepted the offer terms and sign the agreement, various inspections and appraisals will take place. At this time, the buyer may renegotiate the sales price or terms based on inspection findings. Work to a mutual agreement if possible. Once inspections are complete and satisfactory, a closing date will be set. You’ll (usually) need to move out of the home before this date. Pack up, clean up and say goodbye to your old home! Closing will take place at a title or attorney’s office. If you lacked the equity to pay commissions and closing costs, you’ll need to bring your checkbook and pay the appropriate parties.

Congratulations!