Selling Strategies for Homeowners: What You Need to Know
Selling your home can be extremely frustrating. Many homeowners believe they can do it themselves. After all, you just have to make it look nice, list it online, and wait for people to call right? A great realtor can make selling a home look so easy you might think you can do it yourself. However, there is more that goes into getting it sold than just the basics. We’ll cover some selling strategies for homeowners to help you boost your home’s visiblity and attractiveness to buyers in a bit. Let’s first take a quick look at why you should use a realtor and why a home sells.
Why Use a Realtor
According to the 2016 National Association of REALTORS® Profile of Home Buyers and Sellers, almost 90% of sellers engage a realtor to help them sell their properties. There are many contributing factors to the importance of using a realtor instead of listing your house as for sale by owner; complex, ever-changing real estate laws and regulations, accurate home estimates and listing pricing, and confusing contracts and negotiations are a few factors. While realtors are expected to adhere to strict regulations, there is more that goes into selling your home.
A great realtor will provide an accurate and in-depth market analysis so your home is priced to sell. They will know the neighborhood and have experience selling your type of home. They will have exceptional negotiating skills and be in constant communication with you. The sign of a great realtor is that they make it seem so easy, you think you could do it yourself.
Why a Home Sells
There are four main factors to why a home sells in the current housing market.
Buyers prefer upgrades and new finishings. If your home isn’t upgraded it may not sell for as much as other properties in your area. Don’t go crazy trying to make everything new, but rather focus on upgrading kitchens or bathrooms as these give you a better return. We have an excellent guide to a sellers best return on investment that will help you pinpoint areas to target for update or remodel.
Loan amounts and interest rates, current market trends, comparable properties and amenities are additional factors that make a big impact on your sale. Keeping up with these details will help you stay ahead and potentially sell your home quicker.
You have no control over this factor but it’s important – where your home is located makes a big difference. People don’t just want to move into a nice home, they want to move into a nice neighborhood. Recognize the pros and cons about where your home is located so you can list it accordingly.
Price, Price, Price
Pricing your home to sell the first time is imperative. According to a study by Redfin, a homes first two weeks on the market are the most crucial with it getting 4x as many hits than a month later. After that, offers will slow down, as the traffic is limited to only new buyers entering the market. And the longer your home sits on the market, the more buyers will think you will reduce the price to below market value to get it sold. Overpricing your home is a sure way to end up selling it at a much lower price in the future.
Selling Strategies for Homeowners
Don’t Buy a New Home Before Your Current Home is Sold
Some individuals prefer to buy a new home before they sell their old one. However, not everyone has the means and the finances to do this. If you need the money from the sale of your current home to fund a purchase you want to make in the near future, you’ll want to make sure your current home is listed and sold first. Selling and buying simultaneously is stressful! Doing this can easily cause you to feel pressured into making quick decisions about listing price.
In order to get the best bang for your buck, secure a short term rental or temporarily move in with friends or relatives. While it may not be as comfortable as having your new home, you’ll be able focus on getting your home sold before piling on the added stress of looking for a new one. Vacant homes also are easier to show and sell than homes that are occupied, and studies show that the quicker a home sells, the more money you get out of the sale.
Price it Right to Maximize Buyer Interest
When you are ready to sell your home, chances are you don’t want it to sit on the market for too long. The longer a home stays on the market, the more flexible you’ll need to be on pricing. That’s why it’s important to have realistic listing prices and terms. Factors like your homes condition, terms, location and price should be your focus.
Other reasons you should price your home right from the start:
- The longer a home is listed, the less interest it gets, and the more likely you’ll have to reduce the price
- Competing properties in your area are not all alike
- You may be missing out on buyers who should be looking at your home, but it’s out of their price range
- If the home appraisal comes back less than your asking price, buyers can back out of the contract leaving you to start the whole process over again
- You as the seller cannot demand nor expect the buyers to pay the difference or settle on a price in between your asking price and the appraisal price
If you’ve priced your home at market value for condition and location, about 60% of buyers who are home searching will be interested in your property.
|Asking Price||Buyer Interest|
|+15% above market value||10% of buyers|
|+10% above market value||30% of buyers|
|At market value||60% of buyers|
|-10% below market value||75% of buyers|
|-15% below market value||90% of buyers|
Trust your realtor! Experienced and knowledgeable realtors with proven track records of sales know the market and know how to get your home sold in a reasonable amount of time. Don’t know what to look for in a realtor? See our blog post on why finding the right realtor is crucial to getting your home sold.
First Impressions Last
A little bit of home staging goes a long way. Making sure areas or neat, uncluttered, and well lit will make your home stand out during open houses or showings. Below are a few tips for making a great first impression prior to photographing and showing.
Remove unnecessary items and furniture from rooms
Keep things color coordinated (up to two colors)
Paint or touchup (if needed)
Illuminate with natural light and lamps
Clean carpets, drapes, and windows
Walk the outside and check the paint, fences, and garage
Have your roof checked for damage as lenders frequently won’t close without a damaged roof being repaired
Clear gutters, patios, and yards of trash/debris
Prune bushes and trees; remove dead plants and trim away from the house
Keep lawn freshly cut and fertilized (if in season)
Want to Sell Quickly? Sell Your Home at Auction
Typically, homes sold at auction are properties that are bank owned, distressed properties, tax foreclosures, or in some cases owned by homeowners or investors who need to sell quickly. If you are more interested in selling your home quickly rather than getting the top sales price, selling your home at auction may be one of a few selling strategies for homeowners that could benefit you.
In a home auction the real estate being sold is reviewed for value using a home appraisal, tax information or comparative market analysis (CMA). The seller and auctioneer service will agree on a price after market value is determined in order to attract buyers. Then the type of auction will be chosen, depending on different variables. Trulia has an article listing different types of real estate auctions you may find helpful.
Benefits to selling your home by auction:
- Auctions are events
Events are easy to market and typically generate more interest than a usual open house or showing. If you are holding an event, it’s implied that multiple people are going to be there, which encourages more people to show up.
- Auctions create urgency
Sense of urgency goes a long way towards getting your home sold quickly. Auctions set a specific date and time. If buyers are interested in your property, they will have to act before the deadline. Depending on what type of auction it is, buyers may be able to snatch it up before the auction occurs.
- Can set reserve price
Most home auctions allow you to set a reserve price so that you still get money for your investment. This can be 10%, 15% or more below market value depending on how little you are willing to take and how many people you want to come.
- Few conditions, less work
The good thing about a home auction is that there are few conditions and less work you need to put into the property. Most are sold “as is” with little to no upgrades, fixes, or cleaning.
- Speedy closing
This is wherea real estate auction shines. You may have moved out of state, inherited a property you don’t want to keep, or just want to get out from under a bad investment. Closings for a home auction are generally quicker than a typical sale.
Consider Carrying the Lease
In an owner carry/lease option, the owner (you) agrees to continue to hold the title and mortgage of the property while potential buyers take over the payments. This is called seller financing. Some buyers who cannot secure traditional financing will favor this option. It gives them an opportunity to move into a bigger place right now, while building up their credit and finances to carry the mortgage in the future.
In this scenario, terms such as down payment, interest rate and number of years are more flexible to the buyer. Closing costs are generally much cheaper because the banks fees have been removed from the closing. The closing will be faster as lender requirements aren’t slowing the process down. The monthly payments the seller gets from the buyer is less than a lump sum which also allows the seller to avoid tax liabilities.
Make sure to use a title agent or real estate attorney to research any potential issues, and be clear about the terms and conditions. In some instances, seller financed properties can have large balloon payments that the buyer is not able to afford.
Other Important Facts to Consider
Selling your home can be challenging even in the best of times. Take it slow, and make sure your documents are in order. Important documents such as deed, mortgage ageements, tax & utility bills and rental agreements need to be easily accessible. Being familiar with tax and real estate laws laws can go a long way living with the consequences of selling your home. Also understand that it’s difficult to predict the housing market.
Whether you need to sell now or you are looking at your options, it’s important to be as logical as possible. Selling your home is a highly emotional experience, which is why is a good reason to use a realtor rather than trying to do it yourself. Using these selling strategies for homeowners will help get your home sold under the most favorable conditions for the price you want.