By Colin R. O'Leary
December 27th, 2021
When it comes to selling real estate, most sellers expect the same things. They expect great customer service. They expect honesty & integrity from the professionals they hire. They expect the home selling process to run efficiently without any drama. They expect their home to sell fast and for top dollar. These are all reasonable things.
Selling real estate is not exactly rocket science but it can be complicated though, especially if it's your first time trying to sell a home. Selling a home is not the same as buying a home. Selling real estate is a high stakes game. It's often one of the most important financial decisions that a person makes in life. There are certain things you should know before you list your home to help you avoid mishaps and maximize your results. The key is to educate yourself as much as possible before you begin the process. If you do this it can help you save valuable time, money, and energy. It can help you make informed decisions in the home selling process.
Real estate transactions are not all the same. They are all similar though. It's not always about what to do, but also about what not to do. If you make the wrong decisions it can end up costing you. On the other hand, if you make the right decisions, it can help you maximize your results. I've put together a list of a few things you need to know before selling your home.
Hiring The Right Professionals
Hiring the right agent to help you sell your home is a critical step in the home selling process. This is important because if you hire the wrong agent, it can make the process more difficult than it has to be. The truth is that not all real estate professionals are equal. The barrier to entry is relatively low in the real estate industry. Anyone can obtain a real estate license within a short period of time. The costs of getting in the business are relatively low. The scale of experience in the industry varies greatly for these reasons. There are a lot of amateurs in the real estate business. If you hire the wrong agent, it can cost you big time. Not just with money, but also with your precious time.
The good thing is that there are a lot of experienced agents in every market. These agents are highly competent & professional in the way they do business. They know exactly what they are doing and can make the home selling process seem easy for you. Most importantly, they know how to get your home sold fast and for top dollar. Hiring the right agent is a critical step in the home selling process. There are a few basic questions that you want to ask the agents you are interviewing to sell your home. Find out how long they have been in the real estate business and how many homes they have sold. Ask them to provide you with reviews from their past seller clients.
When it comes time to sell your home you will also need to hire additional professionals. In some states you will be required to hire a real estate attorney to help you handle the contract. Like choosing the right real estate agent, choosing the right real estate attorney is an important step in the process. Your attorney will be there to help answer the important legal questions you have about selling your home. It's always a good idea to speak with a few attorneys before you choose one. Make sure to choose an attorney that specializes in real estate law and not something else. It's important to choose an attorney with great customer service.
There are other professionals you may need to hire when selling your home. For example, you will likely need to hire a moving company. You may need to hire a handyman to help you prepare the home to be sold. Choosing the right professionals when selling your home can save you a lot of time and energy. Make sure that the professionals you hire have great customer service at the minimum. You will be working closely together for weeks or months or until your home is sold.
Marketing Your Home
Marketing your home, the right way is critical in order to maximize the results when selling your home. The way you market your home for sale can mean the difference between a sale and an expired listing. When it comes to marketing your home, more is always better. Why do I say this? Because more marketing means more buyers. And more buyers mean more offers. And more offers mean a higher selling price. And a higher selling price means more money in your pocket at the closing. Get the point?
The agent you choose to sell your home with should have a comprehensive marketing strategy. The marketing should be of high quality, or you shouldn't hire them. Ask your agent to provide you with marketing examples of homes they have currently listed or have sold in the past. Do the listings look professional? How is the copy or description? Are the images professional? Or were they shot lazily with an iPhone camera? Does the firm provide a floor plan for their listings? Does the firm provide video marketing? What about showing brochures and just listed postcards? What kind of internet & social media presence does the agent and firm have?
One of the worst things you can do is hire a real estate agent with poor marketing skills. If you expect to receive the highest price possible, you will need to have the highest quality marketing available in your marketplace. Don't settle for average. Poor marketing can cause buyers to overlook your home. Poor marketing can result in fewer offers. Fewer offers can result in a lower sales price for your home.
The most important part of the home selling process is the pricing strategy. It's important to note that home prices are always fluctuating. Your agent will help you get a sense of where the market is when you are ready to list your home. They will do this by giving you a comparative market analysis. The comparative market analysis will show you all the recent activity in the market surrounding your home. It will show you comparable homes on the market that have gone into contract recently. It will show you homes that were listed and sold recently, usually within the past six months or less. The more recent the data the better when it comes to pricing your home correctly.
The first thing you want to consider as a seller is whether it's currently a buyer or seller's market. If it's a seller's market, you will have more leeway on the price because of the limited number of homes available. You should not have any issues if you price the home at fair market value or slightly above. You don't want to price the home too far above the current market value though because buyers are savvier than ever. They may avoid viewing your home altogether if it's overpriced even in a seller's market.
If it's a buyers' market, you will need to get the price right or your home may languish on the market for months or years. If you are in a hurry to sell, you want to avoid overpricing your home in a buyer's market. If you overprice your home in a buyer's market, it may sit on the market for months or years without any action, forcing to do price reductions to get it sold. If it's a buyer's market, it's best to price at fair market value or slightly below. The price you choose should depend upon your timetable. If you need to get the home sold ASAP in a buyers' market, then go for slightly below market value. If you are not in a rush to sell, then you can test the market out for the highest possible price.
When you sell real estate it's important to consider all the costs involved. Most homeowners are aware of typical fees like broker and attorney fees. Broker fees are typically the largest closing cost involved in selling a home. There are also other fees involved in the sale of a home that you should be aware of though such as attorney fees, transfer taxes, and title insurance fees.
Another cost you should be aware of is the capital gains tax. Although not a closing cost, it's another fee that you could be on the hook for when selling your property. The capital gains tax does not apply to primary residences, only investment properties that are sold. It's best to speak with an accountant to find out how much you may owe in capital gains tax after selling your property. If you are planning to purchase another property, it's possible to defer the capital gains by doing a "1031 Exchange" or property swap. This is a great way to defer taxes on your investment property by years or even decades.