Selling a home is a big financial decision and not something that should be taken lightly. It can also be a very complex transaction with many steps that most people aren’t aware of. Believe it or not, a hot market where properties are selling in a matter of days can oftentimes add more complexity to the transaction. Below I cover a number of things to consider when selling and ways for you to ensure that you’re maximizing your return on the sale.
- Costs of Selling: This is something that you don’t want to underestimate while you’re making the decision to sell. The costs of selling a home aren’t always as cut and dry as people think. The obvious costs are the realtor fees. These can vary based on the services that are offered but typically range anywhere from 4.5% to 7%. Then you have closing costs. In Virginia, the basic closing costs that you can expect as a seller are Grantor’s Tax($1 for every thousand), WMATA($1.50 for every thousand) and approximately $750 for title company fees and charges.
Some additional, often forgotten, costs that vary per transaction include: repairs, concessions to the buyer, utilities, HOA dues, storage, overlapping mortgage payments, movers, cleaners, staging and capital gains tax.
- Listing Price: The list price that you set for your home plays a big part in the sale of the home. It’s part of the marketing package that you’re putting together. You may have heard the term “Fair Market Value” before. This isn’t the number that the seller wants or thinks the home is worth. It’s the amount that the market or the buyers feel that the home is worth in today’s market. Missing this mark as a seller can leave you sitting on the market for an extended period of time. This often leads to frustration and a lower sale price than you would have received with a proper initial list price. Or you could list too low and end up leaving money on the table. This is a large transaction so the difference of just 1-2% can have a huge impact on your bottom line.
The trick is to find that sweet spot where you can gain the most amount of interest in the property and hopefully attract multiple offers. In a low inventory market where demand is high, pricing properly can create a bidding war. This is where you really win as a seller. Buying a home is an extremely emotional process. A bidding war highlights these emotions for a buyer and can get them “all in” on your property which, in turn, gets you the price and terms that benefit you.
- Only Considering Price: Obtaining the highest sale price that you possibly can is an obvious goal, however it’s not the only thing that factors into making a decision on accepting an offer. There are several contingencies that are part of the sale that play a huge part in getting the deal closed. These may include Home Inspection, Appraisal Contingency, Financing Contingency, Post Settlement Occupancy Agreement(Rent-Back) and others.
- Ignoring Repairs/Big or Small: When buyers are touring a home, they have a certain idea in mind of the condition of a home that they want. There’s a small portion of the population that actually want a “fixer-upper.” They say that they do but when push comes to shove and they need to decide on a property, they’re going with the move-in-ready property. I’ve seen it happen too many times.
When a buyer discovers required repairs during a property viewing, it makes them wonder what else could be wrong. When they get a laundry list of maintenance or repair items in a home inspection it gives them cold feet and you risk them walking away. The proper preparation to get the home ready for sale pays dividends.
- Staging: I don’t want to say that staging is the most important part of your marketing plan, but it is certainly near the top of the list. Most people don’t have the artist mind and vision required to picture themselves living in your home. It’s up to you and your realtor to present your home in a way that paints the picture for them. Remember, buying a home is a very emotional process and we want to tie their emotions into your home.
- Decluttering – everyone needs to declutter
- Lighting – proper lighting is important and shouldn’t be forgotten
- Paint – this is the cheapest and easiest way to make your property look great
- Photos/Video: A buyer’s first impression of your home is generally on the internet and the photos are the first thing they see. It’s important to use wide angle professional photography to present your property in the best light possible. I don’t suggest using the 3-D walkthru for your listing. It gives the buyer too much of a chance to really see your property without visiting it in person. We need them to walk into your property to fall in love with it. Too many buyers are flipping through online portals figuring out which properties that they don’t need to spend the time to visit. Make sure they’re visiting yours.
- Showings: This is the buyers first in-person impression of your home. Don’t lose the opportunity to get them emotionally connected or even attached to your property with poor curb appeal. Little things like a fresh coat of paint on the front door and, believe it or not, a working front door key/lock go a long way. Finally, please do yourself a favor and get out of the house….before the buyers arrive. The last thing the buyers want to see when touring your home is you.
- Negotiating Offers: While negotiating offers it’s important not to move too slow but also just as important to not move too fast. Oftentimes agents will try to negotiate contracts or terms of the offer verbally prior to putting it in writing. As good as this sounds, it doesn’t have the same effect as a written offer. Once a buyer puts pen to paper it emotionally connects them to the property. It puts them one step closer to owning the home. I don’t know what it is but there is something about putting pen to paper that makes it real. Even if “pen to paper” is electronic these days.
- Not Taking Your Realtors Advice: You hired them. This is what you’re paying them for. A lot of money. This is what they do every day at a high level. If not, you hired the wrong realtor. I understand that your mom, dad, sister or cousins have had real estate related experiences and probably have great knowledge of the process. They may have even bought or sold 20 plus properties in their life. However, those experiences are probably spread out over a number of years and in different areas. Things change within the residential real estate process and the market is area specific. The realtor you hire should be someone who is helping clients buy and sell homes locally at the rate of 2 plus homes per month. That’s real world experience that you can truly benefit from. Again, if your realtor doesn’t have that experience in “today’s” market, maybe consider interviewing more realtors.
The different directions that a real estate transaction can take are endless. However, these are good starting points to make sure you’re on the right track.
If you have specific questions or would like to set up an in-person or Zoom meeting to discuss your scenario, please call or email me directly at 703-915-2244 / [email protected]. If you enjoyed this post and would like access to more of my articles/videos, visit the video/blog section of my website at: https://jcurrygroup.com/videos/ and follow me on social media @ JCurryGroup.
Licensed Realtor: VA & DC