If you’re like most, selling your home will be one of the most important financial transactions of your lifetime. Not surprisingly, the process of selling a house typically involves many moving parts and a long list of to-dos – from getting your home sell-ready and setting a competitive price, to negotiating with buyers and navigating the closing process.
ForSaleByOwner can set you up for success with simple how-to guides, all the legal forms you’ll need and recommended local professionals who can help along the way. Plus, our Start to “Sold!” Checklist makes it easy to track your progress and stay on schedule. But before you get started, here’s a rundown of the most common home selling steps so you prepare yourself and hit the ground running.
It’s a good idea to carefully evaluate your finances and how much leverage you have before you jump into the for sale by owner process. For example, how urgently do you need to sell your house? Is a career or job change prompting your relocation? Is your move tied to the school year, medical concerns, or financial pressures? Urgency often plays a role in determining your asking price and what you’ll be willing to accept. If there isn’t pressure to sell, you can wait for the ideal offer and price your house accordingly.
Here are a few other tasks you should complete to help you get prepared.
Get a feel for your local market – You don’t need to dive into market data and crunch the numbers just yet. At this point, just be aware how much homes like yours are selling for. You’ll want to check out home listings regularly and get an estimate on your home value so you have a general idea of what your asking price should be. It’s important to know early on if you’re likely to get the dollar amount you’re hoping for.
Add up transaction costs and remaining equity – You probably won’t need to pay all the closing costs of selling your home because you should be able to get the buyer to cover many of the expenses during negotiations. Still, it’s good to know the specific dollar amounts ahead of time. Research property taxes, transfer taxes, title insurance fees, escrow fees and any other fees that will need to be handled.
Collect key documents – Now’s the time to gather up the paperwork you’ll need so you aren’t scrambling to find them when things get hectic. The most important documents you’ll need are your title, mortgage and insurance.
Nobody wants to buy your postponed projects. To get the best – and most – offers, tour your home with a critical eye. You may want to get an outspoken friend to give you an honest opinion of how your house looks to an outsider. Here’s how to approach the various flaws you may encounter as you evaluate your home.
Take care of cosmetic problems. These are issues that can be fixed or neutralized quickly at minimal cost. Grimy walls should be painted. Torn carpeting should be replaced. Small repairs, such as torn window screens and crooked light fixtures, should all be completed.
Consider making upgrades. Sure, you’ve lived with that gold-tone refrigerator for four decades, and it may still have ten more useful years…maybe. But why would a buyer pay top price for a kitchen with an ancient refrigerator? Evaluate the condition of appliances, plumbing, electrical, heating, air conditioning, roof and structural elements of your house. When you repair or replace iffy systems, you remove a reason for people to reject your house.
Structural elements will typically need to be addressed no matter what. However, keep in mind most renovations will not earn back more than what you pay to make them. You’ll need to determine if there are issues that might send home buyers running for the hills, and if there are, make those so your home doesn’t sit on the market for months.
Be aware of what you can’t fix. The location of your house is something you can’t change. The same can be said for your neighbors, the school district, noise and traffic patterns, and other factors. Be honest about these unchangeable traits. Will most buyers be turned off by certain aspects of your home? If so, you’ll have to price and market your house accordingly.
Some unfixable problems (such as seepage in the basement) must be disclosed to buyers, per state law. You can provide ease of mind to buyers through a home warranty, which covers the cost of repair or replacement for some major house systems.
Now’s the time to research your housing market and figure out your asking price. Establishing a simple baseline for the price can be simpler in a rising market: just add the cost of home improvements to the most recent purchase price and calculate the average rate of appreciation. When market conditions are uneven, foreclosures, short sales and bank-owned real estate can drag down the value of neighboring properties by as much as 30%, further complicating your estimate.
Here are the essential steps to establishing a fair market value for your house:
Check the sale price of recently sold properties. Hopefully you’ve been keeping an eye on home prices and listings online for a while. At this point, take your research a step further. Look at the prices of all the homes in your neighborhood by searching through local property records, which are open to the public.
Get an appraisal. The most in-depth and authoritative valuation of your home will be done by on-site by an appraiser who is familiar with your neighborhood. The appraisal will compare the condition of your house to others recently sold, adding value for unique features (like a fireplace) and deducting for features you don’t have, or for the worn condition of the house. An appraisal can cost around $500, but it can help you prioritize spending for repairs, replacements and upgrades. It will also validate your asking price to potential buyers and provide some leverage during negotiations.
Crunch the numbers to name your price. It’s worth it to gather as much data as possible before setting your asking price. Seeing the full range of estimates, sale prices, homes sold and market trends lets you see the picture. However, it’s also easy to get overwhelmed by all the numbers and get a little indecisive. Our blog on how to determine your asking price will walk you through the pricing process so can make sense of the data and arrive at the right number.
If you’re still having trouble, you’re in the right place to get all the help you need.
Prepping your home for buyers is one of the most important steps to selling a house. The goal is to make your home as attractive as possible while spending as little as possible. Unless your yard is an overgrown jungle, or your interior hasn’t been updated since the 70s, you can manage this by doing some house cleaning and staging to highlight your home’s best features.
Declutter and clean. Clearing out the debris of everyday life will help sellers see the actual house. You might want to rent a storage unit for out-of-season clothes, decorations, memorabilia, sporting equipment, furniture and other goods that come between a house hunter and the house itself. Once you clear things out, freshen up your suddenly-spacious house. Consider having the carpet and windows professionally cleaned and adding a fresh coat of paint if any rooms haven’t had one applied in quite some time.
Use some staging techniques. Staging is the art of creating a welcoming environment that helps buyers envision their life in your home. Chances are you can stage using accessories and furniture you already have, though you may want to add a rug, some throw pillows or artwork to brighten a room and call attention to its best features. Be sure to group accessories by color, shape or texture to avoid a choppy or disorganized look.
To make a room seem larger, you may want to reposition couches and chairs away from the walls into little clusters, making traffic lanes in each room obvious. This will create a more spacious, user-friendly feel at first glance. Home lighting is also important to the appeal of each room. HGTV recommends 100 watts for each 50 square feet to create a warm and welcoming setting.
Spruce up your yards. While a professional landscaping company can make a home’s exterior truly sparkle, you probably don’t need to make that kind of investment. Consider applying some fresh mulch to garden beds, doing some pruning and adding a few flats of annuals for color. In most cases, that’s enough to add some instant curb appeal without breaking the bank.
Once you’ve priced and prettied up your home, it’s time to start showing it off to potential buyers. Get ready by assembling all the materials you’ll need for your listing and marketing efforts. This can include: photos (professionally shot, if you can swing it), pricing documentation, room measurements, yard signs, flyers and handouts to give buyers at showings.
After you have everything you need, it’s time to stir up some great offers and get your home sold!
Put your home listing online. If you’re selling on your own, ForSaleByOwner.com will help you reach seven times more visitors than any other “by owner” site. To list your home through multiple listing services (MLSs), you’ll need the help of a licensed real estate agent. However you choose to sell your home, the team at ForSaleByOwner can help you post your listing to create maximum visibility.
Use print advertising – seriously! Don’t dismiss newspapers. Readership may be down across the country, but many people looking for a home will seek them out everywhere. You can usually run a nice-sized ad for very little money – plus you can target it exclusively to buyers in your area. You can also reach out to a few brokers about buying a mailing list to reach buyers via direct mail. This can be a simple, affordable and effective method for drawing interest from serious buyers. For more print marketing tips and plenty of how-to-articles, check out the ForSaleByOwner.com Seller’s Guide.
Arrange some open houses. As long as your home is in an accessible location, it’s a good idea to hold an open house so buyers can get up close and personal. Get the word out through your social networks like Facebook, Twitter and community groups. Advertise it on Craigslist. Post flyers at supermarkets. As some selling your home on your own, it’s okay to be present as buyers tour the home but try to keep your distance. Most buyers don’t like to feel watched or pressured. Also, be sure to create property description flyers and leave them where buyers can grab one on their way in.
However much help you need with any or all of these tasks, ForSaleByOwner.com has you covered.
In real estate, negotiation happens through counteroffers. After a buyer submits an offer, you have the opportunity to accept, decline, or, as should happen in most cases, respond with your counteroffer. The best way to make sure you get what you need is to know what you need first. List out your must-haves, nice-to-haves, and not-that-important-to-haves. This will make it easier to know when to stand firm and when to compromise. Beyond that, be willing to make concessions on points that aren’t as important to you. The goal is to meet a buyer in the middle so both of you walk away happy.
Here’s an overview of what to focus on as you review an offer and how to make your counteroffer:
Consider more than the price. Your eyes will probably fixate on the dollar amount being offered first. This is typically the number that both buyer and seller are most concerned with. However, it’s not necessarily the most important. As a seller, the most important number is your net gain from the deal. Whether it’s through closing costs, taxes or any other expense, a buyer can make a more profitable offer than another buyer even if the price comes in lower. So, pay close attention to what a buyer is offering to pay for before you come to any conclusions.
Look outside the numbers. There are plenty of factors to consider beyond price. If you need to move out right away or need some time to find your new home, being able to set the closing date is a big benefit. This is something you can determine through the occupancy portion of a contract. You’ll also want to pay close attention to any contingencies included. A buyer’s offer could be contingent on them selling their current home, getting financing, being able to move in within a certain amount of time and getting an inspection. There more contingencies an offer has, the less dependable it is.
Aim for a win-win agreement. As you make counteroffers to get more of what matters to you, be sure to offer concessions to keep things fair. Does a buyer want the pool table in your basement? Throw it in as an inclusion. Creating a give-and-take dynamic makes both parties eager to cooperate and reach an agreement.
In most cases, accepting an offer and signing a purchase agreement is a huge relief. It signals the end of the prepping, marketing and negotiating phases, which, during the for sale by owner process, can be quite demanding. But as soon as all those tasks end, another list of to-dos begins. Here’s a typical list of to-dos that closely follow a purchase agreement:
Once those matters are handled, the next step is preparing for closing day. You’ll need to gather much of the necessary paperwork yourself if you’re selling on your own. Here’s a rundown of the forms you should expect to complete when you meet with the buyer at your closing:
Many of these real estate forms can be purchased online. You’ll also find definitions, forms explanations and general information about the process of selling a house included.
The steps to selling a house almost always take considerable time, attention and energy. The good news is that when you sell by owner, you’ll save thousands in commission costs and become even more prepared the next time you sell a home.
