When you decide to sell, the first thing to do is investigate the local housing market.
Consult the large real estate sites, like Realtor.com, Zillow.com and BayAreaRealtyGroup.com to see how similar homes are priced in your neighborhood. Many newspapers also list the selling and asking prices of recent sales, plus how long the houses were on the market. Note the prices for your neighborhood during the last several months.
Check how sales were running, say, a year ago, so you get an idea of whether the market is heating up, cooling down, or staying put. This exercise should give you a sense of what your home is worth.
Selecting an agent
You may decide that you can sell your home without an agent. It’s an attractive thought, since you would save the 5-6% of the selling price that a broker typically collects. But balance that against the work involved in selling a house, preparing the most recent required disclosure forms, documents, title company selection, title insurance issues, rules and regulatory guidelines from the California Bureau of Real Estate and being available at all hours to show it, not counting the many risks involved in showing, follow up, multiple offer scenarios and just keeping away from the pitfalls of just ‘not knowing’ the potential consequences of errors in judgment.
Evaluate the person as though you were a buyer: Is he or she professional and personable? Does he say the right things to make you want to see the home? Also, since the agent will likely be able to advise you on a selling price, how well does his or her price jibe with the homework you did on your own? Don’t be fooled by an agent who is merely flattering you with an inflated price. Go by what you already know about your house and the current housing market.
Try to get more information from your real estate agent. Reports can reliably be a good resource for the latest information about your neighborhood, home and other activities related to property values.
Ask your agent for any of the following…..Real Estate Property Reports
- Market Trend reports
- Property reports
- Appraisal style – Sales Comparison reports
Timing is the key
Also note how long the homes were on the market. If you’re in a seller’s market, with listings moving in a week or two, think about adding a premium to the asking price.
In a buyer’s market, it’s especially important to get the price right. The critical selling time is within the first month after your home hits the market. If the price is too high, you’ll turn off potential buyers and agents and then have a hard time attracting them back, even if you lower your sights later.
Before the Sale: Expenses to Expect
Here are the typical upfront expenses. Some are a matter of choice, yet may be important investments in making sure your house sells for the highest amount possible — or sells at all. (Save those receipts! If you might owe capital gains tax, your prep costs will be important in reducing your “gains,” )
- A new paint job is one of most cost-effective ways of freshening your house up, inside and out. If you’ve recently painted, this is less important — though if your color choices were bold or unique, you might want to tone them down with some crowd-pleasing neutrals. Your stager, if you hire one can help advise on the best colors.
- Window washing. When did you last wash them — especially on the outside panes of upper floors? Sparkling windows make a surprisingly large difference to buyer perceptions. Hiring someone will cost a few hundred dollars, depending on the size and height of your home.
- Fixups… Which fixups are necessary (such as replacing cracked windows or stained carpeting) and which (such as major remodels) should be left for the buyer to handle is a separate discussion in itself. But there’s practically no house that couldn’t use some quick maintenance to make sure it looks well-cared for and leaves fewer items for a home inspector to comment on.
- Staging your home, or having a decorator help de-clutter, reorganize, and in some cases refurnish it after you’ve moved your stuff out, can help impress buyers in a big way. In fact, studies show that buyers pay more for staged homes. Expect to pay a professional stager a few thousand dollars for their services (a bit less if some of your own furniture is usable.) Adding decorative or new items to your home (if you’re not hiring a stager). Even if you decide to save money by staging your own home, you’re almost guaranteed to have to buy things like a new doormat, new plush towels for the bathroom, flowers for the showings, and more, depending on what your house needs. Other likely possibilities include new couch cushions, area rugs, a nice table runner, and artwork to replace your wall of kids’ photos.
- Buyers are increasingly interested in the state of your garden. If it’s already fully planted, you’ll want to hire someone (or put in some sweat equity) to get it raked, pruned, and otherwise tidied up. If the area hasn’t already been landscaped, plan to add some new greenery and flowering plants. (By the way, if you plant in containers, you can take the containers with you when you move — unless they’re so big or incorporated into the property as to be considered “fixtures.”) Many sellers simply put in new sod — but do the buyers a favor and don’t leave the plastic mesh backing on it, in case the buyers want to replace it with something more interesting and environmentally friendly.
- Pre-inspection reports. Having a professional inspect your house for either termite/pest damage or other structural matters isn’t required, nor expected in most parts of the United States. Buyers expect to pay for their own inspectors, and in fact will probably want to hire ones they know and trust regardless of whether you’ve had the property inspected first. Yet there are situations where you might want to have the house inspected before letting buyers in — for example, if you’ve owned the property for many years and wonder whether any problems have arisen “below the hood” that you’re oblivious to, and would perhaps prefer to fix before buyers have a chance to get upset about them. Inspections will run you upwards of $400.
At Closing: More Expenses to Expect
The good news is, most of what you’ll be paying out at closing will come out of the sale proceeds. The bad news is, you’ll be saying goodbye to some big dollars.
- Real estate agent commissions. You, as the seller, will likely be paying the entire commission, to be split between the buyer’s agent and yours.
- Other closing costs or credits to the buyer. You might have agreed — based on local / County guidelines/traditions or buyer negotiation — to pay various of the standard costs associated with closing the deal, such as fees for the escrow company; recording and transfer of the property; homeowners’ and title insurance; and more. With the market down, some buyers are asking sellers to pay all of the closing costs, which typically add up to 2% to 4% of the selling price.
- Transfer tax. Your city or county may require you to pay transfer taxes.