The Homeowner’s Ultimate Guide to Selling a Home
Congratulations! If you’re reading this, it means you’ve decided to sell your home. This is a really exciting time, and we want to be right here with you as you go on this journey. As you know, a home is the biggest purchase many consumers make in their life, so it's important that you are well informed on all variables. In this guide, we’ll go over a ton of different content. To break it down, we’ll split it up into a few sections.
Prep work — If you give a lumberjack four hours to cut down a tree, they will take 3 hours to sharpen their axe and one to cut down the tree. If you prep correctly, you will know:
- How to price your home correctly.
- Where you need to repair your house.
- Your negotiation levers.
- Where to list.
- The cost of selling your home.
The next section will be on what to do when your house is on the market. You’ll learn:
- How to make your house look as attractive as possible.
- How to market your home to the world.
- Whether you should do open houses or us the internet.
- The benefits of using VR/AR to show off your home.
- How to make good first impressions when you meet potential buyers.
Closing the deal — a deal isn’t done until it’s done. Here, you’ll learn how to:
- Take a deep dive on negotiating.
- Discern which deals won’t go through.
- Push the deal across the line.
- Seal it.
With all of that, are you ready to sell a home? Yes? Alright, let's get into it. But first, a quick and very important question:
Should you use a REALTOR?
There used to be an obvious answer to this question. Until recent years, everyone used a REALTOR to handle listing and promoting. But times have changed significantly over the last decade. Instead of the only option being to work with a REALTOR and pay a 6% commission fee, there are new platforms that allow you to list directly to sellers. This cuts out the middleman, saves you money, and gives you control over the selling process. There are pros and cons.
Pros of using a REALTOR
- They know the market well and might know buyers that wouldn’t be aware of your house otherwise.
- It’s a more hands-off approach for the seller. The real estate agent handles the listing and promotion.
- It’s proven. Using a real estate agent has been the norm for the last several decades. Many people like using proven systems.
Cons to using a REALTOR
- In exchange for them doing all that work, you’re giving up generally six percent commission on the closing costs. This may not seem like a lot, but six percent can add up to tens of thousands of dollars (or more) depending on the sale price.
- Realtors may not be as good as software. When you use the power of software, you have big data behind you.
- The millennial generation is largely growing up with the internet. As that generation grows up, as does Gen Z, they will be looking for more online-centric places to sell their home. This is good for online providers but bad for REALTORs.
You’ll want to make sure that your home is in the best condition possible before you price it for the market. There are tons of elements to this, but we’ll bundle them up into three big categories: clean, upgrade, and fix.
It’s imperative that you have a clean home. No, I'm not talking about your kid’s legos picked up off the ground. I’m saying every corner of your house needs to look, feel, and smell great. This includes cleaning the carpets, dusting all your appliances and fan blades, scrubbing off any stains and dealing with the hard ones. The difference between a clean carpet and a not-so-clean one could make a difference of thousands of dollars in your home’s final price.
There’s going to be many areas of your home that are old or aren't appealing to the eye. For example, paint in the kitchen or a TV set in the den. These are small areas where you can improve the ambiance, and it changes the perception of the home. It’s suggested that you paint your walls neutral colors that appeal to most people, like tan and white. This helps potential buyers imagine what they could do with the home for themselves.
Everyone has those issues in their homes that have always been annoying but not annoying enough to fix. Selling your home should be a forcing function to get all of these problems fixed. The creaky door. The dripping AC. The roof that leaks when it pours. All of these little things add up when you’re valuing your house, so don’t skip out on them.
Once you have cleaned, upgraded, and fixed your house, it should be in better condition to sell at the highest price.
Understand the cost of selling your home
The 6% commission fees aren’t the only cost when selling your home. In fact, there are tons of others that you should be aware of in order to properly budget when selling your home. We wrote a great blog post all about the different costs associated with selling your home. In short, the categories you need to think about are the following:
- Home inspection ($400-$1,000).
- Staging costs ($2,000).
- Title insurance ($1,000-$4,000).
- Listing your home and selling (1%-6%).
There are also a ton of costs that vary depending on your situation, like:
- Home improvements.
- HOA fees.
- Paying off the mortgage.
How much is your home worth?
One of the first things you’re going to want to do is to figure out the value of your home. This way, you won’t be leaving money on the table by underpricing or scaring potential buyers away by overpricing. Although there are plenty of tools out there that price your home for you, it’s important to know how this all works so you can speak intelligently to a prospective buyer.
- To go deep, you can get a comparative market analysis. This can be done by a real estate agent, and there are tons of services that you can get this type of data from.
- If you want to be as accurate as possible, you’ll want to get a professional appraisal.
- Another option is to use the FHFA House Price Index Calculator which takes a more scientific approach, using market data.
Although getting an appraisal isn’t the least expensive option in the world, it might be the most accurate one. When you get an appraisal, they evaluate the market, property, properties similar to yours, to come up with a very data-driven number on what your home is worth. Getting an appraisal can cost you in the mid to high hundreds.
While on the market
Once your house is listed, people are going to come by wanting to get a look at it. They will also view online. This is where using companies who make your home look better are worth the money. One investment you’ll want to make is in a professional stager.
Getting a professional stager to come to your house and organize a few key rooms is important, as this one activity can make your house look more appealing to the eye, or more valuable. If you’re listing your house online you’ll also want to hire a professional photographer to capture the efforts of the professional stager as accurately as possible.
Once you have a house that looks good, you need to get the word out about the listing. If you’re using a tool like Homeworthy, it will help you market the listing through their platform. Still, it’s a good idea to do some PR yourself to make sure you’re getting a lot of interest from potential buyers. Some of the activities you can do to garner interest are:
Get the word out
Don’t rely on your REALTOR or platform to do all of your advertising!
Post on social networks
Sometimes, the best way to get the word out is to just scream at the top of your lungs online. The more people who know you are selling a home, the more people you can reach that are first and second-level connections. Sharing your listing on Facebook, Twitter, and Linkedin can make people aware that you’re selling and enables them to share with their friends.
After you share through organic measures, you can aim to promote your listing through advertising. You can do the same platforms, but also think about advertising in your local newspaper, and even on Craigslist. Many people still use these old school outlets to look for a house, so you should be meeting them there.
Leverage emerging technology
In the last half-decade, companies have popped up to make the buying process more immersive. For someone who wants to check out your house without flying in for the first look, consider going high tech and using a platform like Matterport.
Matterport lets you capture your whole house in VR and display it for anyone to view in the comfort of their own home. This makes your home more accessible and also puts you on the bleeding edge of technology, which might attract more younger millennial buyers. VR also enables virtual staging, which can save money and time, as well as the added benefits listed above.
Make good first impressions
So you’ve marketed your home, you have all these people interested. Now you need to make a great first impression! There are a few tactics you can use to make this happen. I am pulling from the book called “How To Win Friends and Influence People.” The first tip I summarize as being interested, not interesting.
Be interested, not interesting
When talking to someone, even though it’s your showing, you want to make them feel like the stars. When you meet a prospective buyer, ask them tons of questions about themselves. Where they are from, what they like about your city, family, etc. When you do this, you make them think less about liking the house and more about liking you, and if you have a good relationship with a buyer, the sell will be more smooth. To make a good impression, be interested, not interesting.
When meeting someone in person or talking virtually, remembering their name and addressing them by it speeds up the trust you need to make a sale. In a world with 1000 distractions, the simple gesture of remember a name and addressing someone correctly can go a long way in building a relationship that leads to a sale.
Learn what motivates them and drive it home
If they are buying a home, obviously that’s a big life change for them. Learn about their goals and motivations, and tie those into future conversations when talking about the house. Many people don’t think of it this way, but selling a house is plain old sales. We do business with people we like, know, and trust. So get busy making good impressions so you can move the house sale process along.
Closing the Deal
You’re almost across the finish line! You have a beautiful (and clean) house, you have a lot of people who like YOU, and now its time to close them and sell that house!
What’s important to know here is the levers you can pull when you negotiate. When you get deeper in conversations with buyers, they will likely try to negotiate to make it a better deal for them. We’ll refer to a blog post we wrote a few weeks ago to talk about your bargaining chips when selling your house:
Offer a home warranty. This gives a buyer peace of mind that if something breaks after they purchase the house, it will be covered and they won’t be liable.
Cultivate multiple interested parties. If you have many people interested in your home, they will be bidding against each other as you watch the price go up and up.
Offer to cover closing costs — This has become common practice in selling your home recently. if you can cover it, covering closing costs can be used to push a deal through.
Signing closing documents
There are several documents that need to be signed to close a deal. These include, but are not limited to:
- The HUD-1 settlement statement
- Certificate of title
- The deed
- Mortgage payoff
- Statement of closing costs
- Statement of information
Once the closing documents are signed, you have practically sold your home. Congrats! Note, it is common for deals to blow up at any point in the process, so beware of the warning signs that show up when deals are in danger of closing.
Why don’t deals close?
Often, a deal will fall through at the last moment. Some common reasons a deal could fall through include:
- The real estate agent is inexperienced or the company you used to list your home isn’t taken seriously.
- Issues come up during the inspection or appraisal.
- The potential buyer is turned down for their mortgage on the house.
- There are issues in the closing documents that bring up red flags.
To avoid some of the challenges that come up when selling, make sure you follow the steps listed out in this guide and you will have optimized your chances for the deal to go through. Of course, you can't control everything and some things may not go as planned, but follow the right procedures and you’ll be in a good place.
Going through this list should give you a pretty good primer on what you need to do to sell your home. There will always be more to do, but remember, the goal is to get the sale at a price that you want. Sometimes, you just need to stick with the basics and push the sale through. If you need any other resources on selling your home, make sure to check out our blog here. Additionally, consider Homeworthy as an affordable, easy and effective way to get your home sold. We are a fully digital zero-pressure home selling experience backed by local experts and technology that saves homeowners up to $15,000 on average.