Ready to sell your first home?
The good news is that you’re already familiar with real estate markets, since you had that crash course as a first time buyer. The bad news is selling your first home isn’t as easy as home and garden shows make it seem.
But that’s OK, because our first-time home seller guide offers a glimpse into all aspects of the home selling process, and provides practical tips for getting the home show ready.
We’ve broken the selling process down into three phases: pre-sale, during the sale, and pre-close.
Pre-sale: Before you list
1. Create a game plan
You want to make the most money possible out of your sale, maybe get into a house that better suits your needs. Creating a first-time home selling plan is critical in order to set priorities for the sale and avoid confusion throughout the process. The most important items to include in a home selling game plan are:
- A clearly defined reason for making the big move — why are you selling the home?
- Knowledge of where you’re going to move next.
- An outline of your priorities for this home sale: Are you more interested in a profit, or in selling the home quickly?
Additionally, your plan should include the following items, which we’ll discuss in greater detail in the following sections:
- The best time to list the home
- A rough estimate of the costs associated with selling
- How to best prepare the home for showings
- Setting a competitive list price for the home
2. Determine how you’re going to sell
Perhaps the most important decision to make is how to sell the home. Fortunately, there are a variety of options available to you:
- Hire a real estate agent, where the agent handles every detail of the transaction in exchange for a commission upon sale of the home.
- Sell your home to a direct buyer like Opendoor. At Opendoor, we take a single service charge to provide you with a hassle-free sales process without listing, showings, and months of stress. You’re in complete control of your moving timeline, and choose your own closing date.
- Sell the home yourself, with a “For Sale By Owner” transaction you will handle every step of the process from marketing, to paperwork, to preparations for closing.
3. Determine the best time to list
As we’ve concluded in our post about the real estate seasons in Phoenix, late spring is the best time to sell a home—and we believe that our takeaways from Arizona’s capital apply to most other markets as well.
But in areas where inventory is low and buyers are plentiful, the calendar may matter less than other factors, such as the state of your personal finances.
If you’re finances are in good shape and you’re in need for more room or an upgrade, that might determine a better time to sell in a tight market than trying to play the calendar.
4. Estimate your costs
Although buying a home is expensive because of the down payment, there are high-dollar costs associated with selling a home as well — you can get a more detailed rundown of the total cost of selling your home on our blog.
Some of the costs you’ll want to factor into your seller’s budget, and the eventual list price:
- Realtor commission fees
- Prepping the home to sell, from cosmetic touch-ups to repairs
- Seller concessions
- Closing costs
- Housing overlap costs, such as first month’s rent or mortgage on the new home while covering the home you’re selling
5. Prepare your home for sale
Most homes need a little pre-sale cosmetic work, even if they’re newer builds and you’ve kept the home in good shape.
Have someone with a great eye for detail walk through your home and point out areas of concern, or visualize what your pickiest friend would say about the home. A realtor might have a home stager they recommend to help with this, with an eye toward space and design tweaks that engage sellers.
Not all fixes need to cost much. For example, you’ll want to declutter and depersonalize the home. This includes ensuring each room is tidy, and also that all closets, cabinets, and shelves are clutter-free. Make sure the lawn is freshly mown and the porch is swept. Paint rooms in a fresh, neutral color. Remove large furniture pieces. You want the potential buyers to envision that there is more than enough storage in the home to fit their needs.
Repairs can vary from small fixes, such as broken or loose knobs, to large scale bathroom renovations. When evaluating whether you need extensive renovations, it’s crucial to research other homes in the area. Ask yourself:
- Are updated homes in the neighborhood going for significantly more money?
- Will you have to re-evaluate your desired list price because your home isn’t updated?
- Are there features standard in homes in your area that your house does not have?
These answers will vary depending on the area, neighborhood, and the overall price point of your home. Check out our in-depth blog post to read more about the steps you should be aware of when preparing your home for a sale.
6. Set the right price
Determining the list price of your home is often the trickiest part for sellers. Too high, and your home could sit on the market. Too low, and you could be leaving money on the table.
There are a variety of online tools that help you to create a ballpark idea of your home’s true value. On our blog, we walk you through the steps of calculating a home’s value.
Some of the important questions to ask when pricing a home:
- What are homes with similar features in my neighborhood worth?
- Does my home have any extraordinary features that increase the value, such as a pool?
- Is this home as up to date as other recent sales in the neighborhood?
7. Double down on professional photography
According to the National Association of Realtors, 90 percent of buyers search for a home online at some point, which is why taking high-quality photos is the best way to create a positive first impression of your home. Since much of the initial interest occurs when the home first becomes available, it makes the most sense to take the photos before the home officially goes on the market. Hire a professional, or consult with your real estate agent. Often, an agent will handle the photoshoot for you.
The Selling Phase
8. Keep the home clean
There will be an initial burst of activity once your home goes on the market from potential buyers interested in the new inventory. You may have several showings over the next few weeks, so it’s important to keep the home show-ready. You’ll need to accommodate the buyer’s schedule, and show a clean house at a moment’s notice.
9. Keep emotions in check
Because homes are so personal to both buyers and sellers, the real estate process can be incredibly emotional. As a seller, it’s important to keep emotions in check (and your priority list close at hand) once the home goes on the market. As strangers tour your home and provide feedback, and offers roll in, keeping a firm grasp on your emotions assists in both a smooth sale, and in reducing stress and tensions throughout the process.
Home selling can be bittersweet. It’s important to make peace with your decision to move on, and ultimately remember the reasons you’re selling and the goals you’d like to accomplish post-sale.
10. Accept an offer
If you’ve properly staged and priced your home, you’ll begin to receive offers. You may receive an offer at or above full list price in a competitive area. A bidding war may ensue if you receive multiple offers, which could drive the price well above asking. If this happens, good for you.
If you receive a competitive offer that’s below list price, feel free to counter. If selling your home remains top priority over making money, determine the amount you’re comfortable with selling for.
If the home has sat on the market for some time with little activity, you may want to consider reducing your asking price.
Pre-Close: What to expect
11. Prepare for appraisal and inspection
Accepting an offer means you are officially under contract. You no longer have to actively show the home. Now, you need an appraisal and inspection.
For an appraisal, the bank determines if your home is worth the asking price, a standard practice for all mortgage lending today. A low appraisal can derail a sale, because a lender will not want to loan an amount for more than the home is worth, leaving sellers to decide if they want to sell for a decreased price or hold out for an all-cash offer. In order to ensure the best appraisal price, present the home to the appraiser as you would to a potential buyer — crisp, clean, and without any glaring issues.
Buyers will also order a home inspection. An inspector will look for potential hazards or repairs the new owner may have to do. Depending upon what the inspection uncovers, from small fixes like loose light fixtures to large issues like mold, the buyer may request repairs or try to renegotiate the sales price, or decide to pass on the home altogether.
Remember, just because the home is under contract does not mean the sale is complete.
12. Negotiate seller concessions
Should the appraisal or inspection reveal any serious issues such as needed repairs or damage, the buyer may ask for concessions. You can hire a professional to make the necessary repairs (which the seller may ask for), or try a do-it-yourself fix. You might also offer the buyer a credit at closing so they can handle the repairs, for example a $5,000 credit to cover fixing a roof or replacing a boiler.
13. Prepare to close
Below is the list of final things to prepare for closing:
- A title company is necessary to complete the sale of any home. The firm searches property records to ensure there aren’t any liens or outstanding property disputes, and that previous sales were properly documented.
- Open an escrow account where you’ll hold the buyer’s earnest money until the close of the sale. Earnest money is a small amount (typically 1 percent of the home purchase price) buyers put forward to confirm their intention to buy the home.
- Hire a closing attorney to oversee preparation of the final paperwork.
If you work with an agent or other third-party to handle the sale, they’ll take care of these final steps for you.
The only thing left is to sign the paperwork and wait for the bank to wire the sales money to your bank account. And move out, and on with your life — hopefully with a sweet pile of cash from the sale of your starter home.
With the tips outlined in this first-time home seller guide, you’re well on the way to having a successful selling experience.
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