Selling your home can be a very serious and emotional affair. This post will walk you through the process, making you well equipped and confident when the time comes to put your home on the market. One of the most important questions to ask yourself right now is: “Am I prepared both financially and emotionally?”
It might be better to wait if you owe more on your home than it’s worth. And how ready are you to part with your house sentimentally? If you need more or less space, is selling your property and signing a new mortgage note really the right move? Keep in mind that simple renovations or additions can fix some of these issues.
Okay, let’s assume you’ve made up your mind to sell and you’re ready to proceed. Here are some helpful tips to sell your house.
Evaluate the Market
The laws of supply and demand incessantly work against each other moving toward an equilibrium price point. Be sure to monitor your real estate market trends and find a real estate professional to help you do so; this way you can strike when the iron is hot. This is one of the most significant tips to sell your house.
Some stats that are worth monitoring YOY: Median Sales Price, Homes For Sale, Closed Sales, Days on Market (DOM), Price Per Square Foot.
Net Proceeds | Profit & Expenses
How much will you profit from selling your property? Do you have enough equity? What will your net proceeds be after closing costs and commissions?
To calculate your net proceeds, take your sales prices and subtract commissions (5% – 6%), excise tax, title insurance, escrow fees and other miscellaneous fees. A good real estate agent will help you calculate this on the anticipated sale of your home.
The Seattle housing market at the time of this writing has seen exponential growth over the last 7 years; anyone who has resided here for a while who’s ready to sell will likely see a handsome return on investment. We are currently riding the longest bull market in the states history.
Year over year (2018-2019) it has started to stagnate however, giving new buyers a little breathing room when trying to find a place to put an offer on.
In most real estate transactions, the sellers are responsible for the real estate agents commission of 5%- 6% of the selling price, with half paid to the seller’s agent and half to the buyer’s agent. It’s also common for the seller to purchase a one-year home warranty; it usually costs anywhere from $300-$1000 depending on the condition and location of your house.
As for the tax implications of selling a home, the most important piece to take into account is capital gains taxes; which apply in certain cases:
If the home you’re selling has been your primary residence for a minimum of two years, there is a tax exemption at the time of this writing; you don’t have to pay cap-gains on up to $250,000 for single persons or $500,00 filing jointly.
If the property isn’t your primary residence, you’ll pay capital gains tax at 0%, 10%, 15% and 20% depending on your tax bracket. Talk to your local tax specialist for more information
Hiring a Real Estate Agent
Real estate transactions can be a perplexing process if you aren’t involved in them regularly; there are an abundance of things to consider and loose ends to tie up in any property deal. Without a well informed advisor, this process can quickly spiral into a full time job.
A realtor (or real estate agent; these terms are used interchangeably) is similar to an attorney’s representation for buyers and sellers in real estate transactions. Think of them as a fiduciary who has your best interests by law in any real estate contract. Some of their duties are as follows
- Realtors prepare and execute all real estate contracts and paperwork; supplying required contingencies, addendums and forms in accordance with real estate laws. They should have a firm understanding of real estate law, and provide you with a pamphlet on the law of real estate agency upon first working with you.
- For sellers, they’re tasked with getting the selling price correct the first time! For new and potential listings, realtors will perform a comparative market analysis (CMA) which uses the same methodologies of an appraiser to find similar properties that are active, pending or recently sold to provide you with an accurate price range to list your property at. A quality agent will meet with you and inspect your home first before making comparisons ensuring the most accurate price possible. They’ll also advise on preparations like staging, painting, depersonalization, and renovations to ensure the maximum sales price.
- A realtor will attend all aspects of a real estate transaction, keeping all parties in alignment with deadlines; think inspections, appraisal, title/escrow, showings, open houses, calls-of-interest, staging, photography, contracts, loan signing, and closing.
- Your realtor will keep open communication with all associated parties and hold them to deadlines, keeping transactions from falling through. Parties include attorneys, lenders, title reviewers, inspectors, appraisers, and opposite parties.
- Realtors resolve issues that could hold up or terminate transactions like holdovers, title issues, repair issues, zoning circumstances, permits, financing and more.
- Negotiation skills are often overlooked but extremely important in real estate transactions. Your realtor will help you finalize pricing objectively, submit terms in your favor and determine dates and timelines for a quick closing. They’ll also keep you honest when emotions could be clouding your judgement.
- Realtors tie up loose ends like signage, key boxes, key delivery and last minute removal items.
Check out our full post on why you should use a realtor for more information.
How Much Is My House Worth?
The main reason homes sit on the market and don’t sell in most cases is due to the price point.
At the time of this writing, the average days on market (DOM) in the Seattle area is 14. If you’re in the Pacific Northwest and your home has been receiving showings but no offers for a month or more, consider adjusting your price.
Unfortunately the longer a home sits and the more price adjustments that are made cause potential buyers to suspect something is unsound with the property. This is why it’s mission critical to work with your real estate agent to get the price right the first time!
Home is where your heart is. You have put a lot of your hard earned money, time and energy into your property. This can cloud your judgement on price. Not everyone shares the same opinion on the worth of certain upgrades or design choices.
On the flip side, you don’t want to price your house too modestly; you could lose thousands if you and your real estate agent don’t do your homework.
Did you know that using a real estate agent on average nets you 30% more for your home than selling by owner (FSBO)? This is well worth the 5% – 6% you pay two experts for both sides of the transaction to make sure everything moves smoothly and closes on time; not to mention all the time they’re saving you.
Most top agents will perform a comparative market analysis (CMA) on your property; it’s an evaluation of a home’s value based on similar, recently sold homes in the same neighborhood. They’ll make comparisons on the year built, the style, condition, fixtures, lot size etc. Then they’ll correlate this with current market data to come up with an accurate sales price range. This is similar to what appraisers do for banks and lenders.
If you’re in Seattle or surrounding areas, Team Sno-King can evaluate your home in person and give you pricing recommendations based on its unique characteristics. We also have a free home evaluation tool here on our site to give you a more rough estimate if you’re still undecided.
How to Get Your House Ready to Sell
People do judge a book by it’s cover. No matter what’s happening with the real estate market, when you want to sell your house, it’s all about making a good first impression.
The very first detail anyone notices is the exterior of your house. It’s what catches their eyes when they are searching for homes online and is the most important impression when they arrive for a showing.
Minor exterior cleanup can make a huge difference with most listings. For example, mowing the lawn, weed-eating, pulling weeds, repairing/painting the fence and cleaning and painting the exterior will be sure to lure potential buyers to your listing.
Consider pressure washing your house and adding fresh mulch around the perimeter; I love it when I walk up to a house and smell fresh mulch. It’s such an amazing sensation. Although subtle, smells can be great emotional triggers for buyers.
Flowers are naturally beautiful and enticing; make the buyers fall in love with your house at first sight by planting seasonal colorful flowers and bedding plants.
These small investments create value and sentiment when selling a house.
Also, decide if you want to stay in your house while it’s on the market. A lot of folks opt to move out and stage their house. When staged properly, the furniture, artwork and fixtures accentuate the strengths of your house and soften the weaker points, concealing odd designs and architecture.
For those that want to command the highest price point and sell the fastest, hiring a top real estate team, having your home vacant, and staging are the way to go.
Staging can get expensive depending on the size of the house and the coverage of the furniture and other items. Consider staging only important parts of the house like the main living space, kitchen and master bedroom/bathroom; this will save you time and money while still giving you a leg up on the competition.
Ask your real estate agent for a reputable staging company.
If you do decide to stay while your house is on the market, it’s always a good idea to rent a small storage unit and declutter your home of personal belongings. Depersonalization also helps buyers and their families to picture themselves in their future home. It’s always a good idea to lock away any valuable items during showings.
Also in the interior, ensure your house is free of chips in the paint and drywall, scratches and blemishes. Be sure all the fixtures and appliances are in working order. Summon Mr. Clean; your kitchen and bathrooms should be reflective!
Additionally, keep in mind that not all your buyers are pet lovers; some might even be allergic to your pets, so make sure you remove your pet food, the kitty litter box and clean up any residual dander and pet related items.
What Renovations are Worth Doing?
Is your kitchen totally retro in the loathsome sense? Are you considering a remodel before you list your property? Perhaps the smart thing to do here is to take a tour of other homes for sale in the neighborhood with your agent. Take notes on the condition and features in these homes; know your competition!
It is true that most home buyers heed the kitchen and bathrooms compared to other areas of the home. This doesn’t mean you need to break the bank with remodeling. You might find that minor improvements make a major difference. A fresh coat of paint and new cabinet hardware are a comparatively easy way to freshen up old cabinets that are functional and outdated looking.
The sink and the faucet are often the central focal point of the kitchen, so why not make a bold statement with a distinctive faucet? Touch less faucets with pull down sprayers are all the craze right now.
Natural light and open floor plans are on a lot of buyers lists; Consider consulting a contractor to install skylights or possibly remove walls to open up your floor plan to give the illusion of added space. This will boost the value of your home; buyers may be more forgiving of other outdated areas of the home.
Why Real Estate Photography is Important?
Think it’s just photos? Think again; this may make or break your sale. A cliché quote but important nonetheless: “a picture is worth a thousand words.” With most folks using sites like Zillow and Trulia, the digital pictures you put on your listings are the first thing anyone sees.
Hiring a professional photographer is well worth the price. Some listing agents use professional photographers; others use their own camera. It doesn’t matter who takes the photos as long as they are professional, properly edited and they portray your house in an aesthetic manner.
If you decide to use Team Sno-King to list your home, we provide professional photography and photo editing at no extra cost!
I personally hope you find these tips to sell your house valuable. I wish you the best of luck in selling your home.
If you need a real estate agent to assist with the sale of your home or are searching for new digs, contact us; we’re here to help.