Step One: Hire A Broker, or Sell Your House By Yourself; What’s the Best Choice?
There is no “right” choice when it comes to deciding whether to use a broker to sell your house. Ultimately, what you choose will depend on the amount of time and resources you have to devote to selling your house. There are many factors to take into account when making this decision.
If you decide to sell your house yourself, you will need to be prepared to spend a sizeable amount of time researching the market in your area and what prices homes similar to yours are selling for. You will also need to handle all of the advertising of your home yourself, and set aside a budget for doing so. You will want to advertise your home in as many venues as possible to attract the maximum amount of potential buyers; look into popular online listing sites in your area as well as the local newspaper, periodicals, and real estate specific listing magazines. You will also need to plan your schedule to include showing your house to potential buyers; it is important that you factor the cost of time off of work for showings and your advertising budget in your consideration of whether or not to hire a broker.
Another important factor in deciding whether or not to hire a broker is the time frame within which you need to sell your house. If you have already purchased another home and are currently making mortgage payments on both properties, time is most likely of the essence to you; a broker may be a good choice to expedite the selling process. A broker will already have clients they are working with they can bring to your house, and they are already familiar and experienced selling houses in your local market, so they will probably be able to sell your house quicker than you will be able to on your own. You will also sign a contract with your broker that gives them a period of time in which to sell your house; if your house is not sold by the end of that period, you can terminate your relationship with the broker, giving them a great deal of motivation to sell your house before the end of the contract.
Using a broker often makes the process much easier as they have a lot of experience and can walk you through the entire process up until the closing. There is a lot to do, so think about it carefully if you want to do all of that yourself. Of course, it costs usually 5-6% of the sale price to hire a broker so you have to consider that. A broker may get you a better price too, so this is something is a plus. Why is that? Negotiating directly with a buyer can put you at a serious disadvantage so you need to think through whether you want to “show your cards” directly to a buyer. Brokers know what information to share and should know how to negotiate for you. Savvy buyers look for For Sale by Owner Listings (FSBO listings) because they feel that they can get a better price, so beware.
If you do decide to hire a broker, you will want to be sure you are hiring the best possible one who will be able to facilitate your home sale quickly and easily. Ask family, friends, and neighbors who have sold their homes for recommendations. Ask potential brokers how many homes they have sold in your area, how they plan to market your home to potential buyers, and what services they are offering you for your money.
Step Two: What Price Should You Sell For?
Choosing the right price to list your home for sale at is one of the most important factors in selling your house. If you overprice your home, it will likely sit on the market too long, and as time passes interest in your house will lessen. If you price at or below market value, you will often receive multiple offers, allowing you to negotiate with interested buyers to get a better price.
The most important tool for pricing your home is looking at comparable home sales and listings in your area. If you are using a broker, they will present a list of comparable properties in your market that have sold recently and their listing and selling price so you can get a good idea of how to price your home best. Your broker can advise you based on their knowledge of the market on the best listing price for your home.
If you are selling your house yourself, you will need to research what prices homes similar to yours are listed at and what prices homes similar to yours have sold for in the past 6 months. The Internet is an invaluable resource for this research. Websites like keysagentmichael.com (not available in all areas), trulia.com, zillow.com, and streeteasy.com will show you homes in your neighborhood that have sold recently and the price they sold at. You can also look at local real estate listing websites, newspapers, and real estate listing periodicals to help you figure out what price to list your home for sale at. Take notice of how many days homes were on the market before they sold and what price they ultimately sold at. You should also visit other homes in your neighborhood for sale and consider how they compare to yours and how you can make your home more desirable than these listings. Choosing a price that is consistent with the price homes that are similar to yours in terms of size, amenities, and location will make your home an attractive one for home-buyers and prevent your house from sitting on the market for too long.
Step Three: Preparing Your Home for a Quick Sale: A Little Work Goes a Long Way
Imagine you are a potential buyer walking into your home. What are the first things you notice? You want potential buyers to be able to imagine themselves living in your house, and not be distracted by clutter, mess, or things in need of repair in your home.
Go through your house and remove clutter. This will make your house look bigger and more attractive to buyers. Store away excessive knick-knack, photos, books, magazines, etc. Make sure your counter spaces are clear of clutter. Think of this as a head start on packing!
It is also crucial that your home be clean and tidy for all showings. Wash windows, clean out your refrigerator, dust, vacuum, thoroughly clean all bathrooms, wax and mop wood floors, and organize your closets and cabinets. Equally important is your home’s curb appeal; wash down your sidewalks and walkways, tidy up your front and back yard, and make sure your house looks attractive as soon as buyers pull up in front of it.
Make your home as inviting as possible for potential buyers; consider the layout of your furniture and color of your walls; you may love your neon green living room, but a potential buyer may not feel the same way. Make sure your home is free of any unpleasant odors; consider purchasing plug in air-fresheners to keep all your rooms smelling great throughout the showing process.
You will also want to make any minor repairs that are needed, such as patching any holes in your walls, fixing leaky faucets, and replacing light bulbs. You want buyers to feel that your house is in good condition and has been taken good care of.
Step Four: Why You Need a Lawyer
Unlike the decision to use a broker, a competent real estate attorney is a must for selling your house. For most people buying and selling a home will be one of the biggest and most important transactions you ever make; certainly a transaction worth having an attorney assist you with. After you find a buyer for your home, there are many things that must be done before closing; home inspection, appraisal, contract negotiations, title transfer, disclosures, etc (we will go over all the steps from offer to closing in the next section of this guide). You will want an experienced attorney by your side to make sure all of these processes go smoothly, and to prevent any issues from arising. The person buying your home will most likely have an attorney working for them, and you do not want to be the only person in the transaction without an attorney on your side.
Your attorney will help negotiate the terms of the sale with the buyer, and be able to examine all legal documents and make sure there are no terms that are disadvantageous to you. They will be able to explain all the legal terminology and legal issues that are involved with the paperwork and documents for selling your house. Many real estate attorneys charge a flat fee for handling the sale of your house, keeping your expenses down.
When it comes to finding a good attorney, the first thing you will want to check is that they are licensed and in good standing. Ask questions about their experience, and make sure they specialize in real estate law. Ask friends and family for recommendations of good real estate attorneys in your area.
Step Five: You Have a Buyer, Now What?
Once a buyer has made an offer on your home that you accept, your attorney and their attorney will negotiate the final details of and prepare the purchase agreement. This will include the legal description of your property, the amount of “earnest deposit” the buyer will be depositing into escrow, the sale price of your home, the size of down payment to be made and how the remainder of the purchase price will be financed, the proposed closing and occupancy dates, contingencies such as attorney review, home inspection, and appraisal, and a breakdown of who will pay what closing costs. As we have already reviewed, having an attorney is crucial for these negotiations.
If a home inspection or home appraisal is a contingency included in your purchase agreement, these will need to be scheduled and conducted before the final closing date.
At the closing, typically you, the seller, your attorney, the buyer, the buyer’s attorney, a closing agent from either the lending or title company, and your real estate broker (if you have one) will be present. At the closing your attorney will go over all the closing documents with you and walk you through signing all the necessary paperwork. All closing and escrow fees will be paid and properly distributed. At the end of the closing, congratulations! Your house is formally and officially sold!