Tip 1: In strong markets, where demand outstrips supply, home sellers can old out for top dollar. In weak markets the reverse is true – there are many homes on the market and unless you price your home very competitively you’ll be very unlikely to attract any buyers. Whatever the current market conditions you will be most likely to get the highest possible price if you are willing to take the time to understand each of the components of a successful home sales campaign so you can assure that you, or a real estate service provider who may be assisting you, are doing everything possible to maximize the effectiveness of the home marketing effort.
Tip 2: A good time to sell is during a period of low mortgage interest rates, because with lower interest rates more buyers will be qualified to buy your home. Low rates benefit buyers and sellers alike, and if you plan to purchase another home after selling yours, you will be both a seller and a buyer. A “sellers market”, where there are more buyers than homes available for sale, is also helpful. However, if you plan to purchase another home in the same area after selling yours, this competitive advantage will work against you when you become a buyer. The same principle applies in reverse to buyers markets, so if you plan to purchase another home in the same area after selling yours, it really makes little difference in the end whether it’s a buyers or a sellers market.
Tip 3: Shine Your Apple. Make your home look as nice as it can look. Have a presale yard sale and get rid of as much clutter as possible. Keep only a minimal amount of furniture in each room – it will make the room look bigger. Store any extra furniture. Clean up and repaint with neutral colors if necessary. Open blinds and replace light bulbs with brighter substitutes. If important parts of your home are outdated consider cost effective updates. If your kitchen or bath is old or in bad shape a prudent remodel can often return over 100% of the investment and help you sell the home faster. But don’t over improve. There’s not much point in adding a fourth bathroom to a home that is already worth more than most of the others in the neighborhood.
Tip 4: Study. More money hangs in the balance in the selling of your home than in most financial transactions in your life. It therefore makes sense to learn as much as you can about selling your home. No matter whether you’re a self seller, or have an agent, you need to learn enough to be in command of the process. There are many excellent books on the subject in libraries and bookstores. The real estate sections of local newspapers are great sources of information about your local marketplace. The difference between understanding the process as well as your local market, versus not understanding it, can be many thousands of dollars in the eventual selling price.
Tip 5: Decide whether to use a full service real estate broker/agent or sell it yourself. Although average full service real estate commission rates have dropped to a little more than 5%, that’s still a lot of money (a 5% commission on a $200,000 home is $10,000, for example). If you have the skills, time, and resources you may be able net more money by selling your home without a full service broker/agent. In many states some discount brokers will put your home in the local multiple listing service (MLS) for a few hundred dollars, and they may also have menu of individually priced additional services. A full service broker/agent may be a smarter choice when you are in a buyers market if you don’t have the experience or the time to learn about the process and your local market. The same applies if you don’t have the time to do all the things necessary to market a home effectively, if you are on a deadline to sell, or if you don’t have an instinctive bent towards advertising, marketing, and negotiating.
Tip 6: If you decide to use a full service broker/agent, first identify three experienced agents who are familiar with your neighborhood. Look for agents who have “for sale” signs placed in your neighborhood. Don’t use an inexperienced agent – entry standards are very low in the real estate field, and years of experience and contacts, as well as advanced professional designations, are valuable. Ask each to prepare a market analysis (how much is it worth?) and a marketing plan (how do you plan to market my home?). Ask lots of questions about both. Include the main points of your marketing plan in your listing agreement so that all parties will know what is to be expected (i.e. frequency of ads and the publications/websites where they’ll appear, frequency of open houses, etc.). Limit the length of the listing – two months or less is good, but no more than three months. If the agent is doing his/her job as set out in the listing agreement you can always renew the listing when it expires. If they’re not producing results you’ll be able to document the reasons if you decide to cancel the listing early or be able to show them why you aren’t renewing the listing with them.
Tip 7: If you decide to market the home yourself it is still a good idea to talk to three full service broker/agents before making a final decision. It will provide an additional reality check to make sure you really are prepared to market the home yourself, and the market analysis and marketing plan information will be helpful in any event. Even if you still feel good about selling the home yourself supplement your marketing efforts by using a limited service or flat fee broker who will list your home in the local multiple listing service (MLS) for as little as $200. This is extremely helpful to your mrketing efforts because the MLSs feed the listings to the consumer-facing websites of most of the other local real estate brokers and to realestate.com, the world’s largest real estate website. With 80% of home buyers now using the Internet, it’s important that your home gets broad Internet exposure. Both do-it-yourself sellers and real estate agents are also increasingly using free Internet-based real estate marketing alternatives like Craigslist.com, Zillow.com, and several others. There are also other modestly priced Internet alternatives like EBay and Yahoo that have real estate listings, which you should consider as well.
Tip 8: Price your property realistically, especially in slow markets. When markets are slow buyers are psychologically unprepared to overpay – and they apply stringent standards of value. They will heavily discount many expensive and unusual improvements unless they appeal very strongly to their own personal tastes.
Tip 9: Consider providing owner financing if you can, but be cautious. If you can provide some financing, even if it’s a small second trust, you may be offering ‘the’ deal maker. At the same time you can often earn a considerably higher interest rate than you would have earned with the same money otherwise. Caution: Fluctuating real estate markets can wipe out your security in the event of foreclosure. Foreclosures cost money and a second trust only gets paid after the first mortgage is satisfied, and then only if there’s money remaining from the sale. Make sure to run a credit check on the buyer and make sure that they put up a substantial down payment if you’re providing owner financing.
Tip 10: Make sure you don’t prematurely give away any bargaining leverage. All home purchase agreements must be in writing to be binding. If someone asks if you would take a specific lower figure and you agree, that’s not an enforceable contract. All you have done is to lower your asking price. The correct response should be “I’ll consider all written offers”.
OTHER FOUNDATION RESOURCES: The Foundation publishes How To Sell Your Home Fast!, a comprehensive 142 page book covering the complete home selling process. If you plan to buy another home after selling yours, you also might want to consider our companion book, The Complete Home Buyers Guide, as well as our handy reference guide “Mortgage Tips and Payment Tables”, a 62 page booklet coving how to get a mortgage and including monthly payment tables. The books are $13.95 each. Mortgage Tips and Payment Tables is $8.95. Shipping and handling for these publications is $3.95. You can order any of these products with paypal or your credit card on our website, www.AmericanHomeowners.org or call 1/800/489-7776 to place credit card order or send check, money order or credit card info to AHF, 6776 Little Falls Rd., Arlington, VA 22213-1213.