Checklist for Selling a House - Part 1 of 2

Editor's Note: This is the first in a two-part series about selling a house. At the end of this article, you'll find a link to the second part of this checklist.

As a home seller, your goal is to sell your house quickly and for the highest amount possible. But these things don't come easy. You must research the market to see what people are paying for similar homes. You must stage the home so it appeals to the widest audience. And then you must promote it through highly visible channels. That's exactly what you'll learn from this checklist for selling a house.

Lesson summary: This checklist outlines the home-selling process from start to finish. But it primarily focuses on the "three P's" of pricing, preparation and promotion. If you optimize these three factors, you can sell a house in any type of real estate market.  

Selling a House the Right Way

Every seller is different. Some will pull the asking price out of thin air, while others spend time researching local sales trends. Some homeowners put a sign in the yard and call it a day, while others promote their homes through every channel available. Some people spend hours on home staging, while others feel it's unnecessary.

Because of these differences, there's a broad spectrum of success and failure. Here's a real-life example. When we sold our home in Austin, Texas, we had multiple offers in less than 10 days. My neighbor down the street had her home on the market for three months without a single offer. What was the difference? I followed the proven strategies for selling a house quickly, and she did not.

If you're serious about selling your home, you need to follow this same strategy. It has proven successful by me and countless other homeowners. Here's how it works:

1. Determine Your Equity Situation

Do you know how much equity you have in your house right now? Do you know if home prices in your area have been rising or falling lately? If you can't answer either of these questions, you've got some homework to do.

Between 2008 and 2011, home prices declined in most parts of the country. You can thank the housing crisis and economic recession for this. We are starting to see some rebound now, in 2011, but that doesn't make up for the huge losses some homeowners have seen. If you have negative equity, selling your house might not be an option. Negative equity is when you owe more on your mortgage loan than the home is currently worth. In these situations, you would need your lender's approval to sell the property.

This is where market awareness comes into the picture. If you've been keeping tabs on your local real estate market over the last few years, you probably already know where you stand.

For instance, if prices have been stable or rising, then you probably won't be in a negative-equity situation. On the contrary, if prices have dropped considerably in your area, you might have trouble selling your house. The key is to figure out where you stand right now, in terms of home value and equity.

If you're not sure what where you stand, you might want to get your home professionally appraised. For about $300, a home appraiser will review your house against comparable sales in the area. He will examine your house inside and out to determine what it's worth in the current market.

You can also find out what similar homes have sold for in your area simply by using the Internet. You can use a website like Zillow.com to view recent sales in your neighborhood. This will give you a general idea what your home is worth.

What to take away from this section: Selling a house is more difficult when you have negative equity. You would need your lender's approval to move forward, and you might even have to use a short sale strategy to sell the house. But if you do have equity in the home, you have one less obstacle to worry about. You could even make a nice profit when selling the house.

2. Price the House Based on Comps

I touched on this topic in the previous section, but it deserves more attention. Pricing your home effectively is the best way to bring in offers. If you price it higher than comparable sales, your house is going to stay on the market longer. I can guarantee that much.

Home buyers today are more savvy than in the past. Everyone knows that real estate values have dropped since the housing crisis began in 2008. As a result, buyers will question your asking price like never before. They're not going to take it at face value. They will look at recent sales trends in your area to determine if your price is realistic.

This is where many sellers go wrong. So I'm going to repeat myself. If you want to be successful in selling your house, you need to establish a realistic price from day one.

How do you do this? You use the same data that home buyers will use to evaluate your price. You look at comparable sales in your area to find out what houses are selling for. If you really want to get the price right, you could even have the home appraised. Both of these things will help you set a realistic price that people are willing to pay in the current market.

This is the key to selling your house quickly. If you are on the same page with buyers in terms of price, you'll probably get an offer within the first 15 days. But if you're miles away from buyers' expectations, you're going to have a long wait. Which scenario do you prefer?

3. Real Estate Agent vs. FSBO

If you're serious about selling your home, you should consider use a listing agent. This is especially important in a slow market. In a seller's market, where homes are selling fast, you could probably handle the process on your own. But in a buyers market, you need every advantage in your favor. And this means working with a real estate agent to sell the house quickly.

If you do decide to use the FSBO strategy, you should read this article.

Some real estate agents steer their buyers away from FSBO properties. I believe this is a disservice to their clients, but that doesn't change the fact that it happens. They do this because they usually have to do more work when dealing with an FSBO sale. It's just something to keep in mind if you go this route.

If you decide to work with a real estate agent when selling your house, you need to find out what services they offer. I'll come right out and say it. There are plenty of lazy real estate agents out there. Some people go into real estate because they want a job where they can "coast" along, snagging a commission here and there with very little work. I've known plenty of these agents.

On the other hand, there are some highly motivated go-getters in the real estate business. This is the type of agent you need to find.

Here is a list of services your agent should offer, at a minimum:

• Market research to include comparable sales.
• Professional-grade photography for your listing photos.
• Home staging advice to help you sell more quickly.
• Listing the home on the Multiple Listing Service or MLS.
• Marketing the home through Realtor.com, Trulia.com and other websites.
• Communicating with home buyers and/or their agents.
• Reviewing offers and negotiating the sales price.

These are the minimum tasks required when selling a house. Your real estate agent should be proficient at everything on this list. Otherwise, you're not getting your money's worth.

As a proactive homeowner, your job is to ask the agent about these things.

Most agents will come to your house and do a "listing presentation" for you. This is where they try to sell themselves to you. This is also your chance to ask about the specific things they will do to sell your house. If an agent says he will list the home on the MLS and leave it at that, you should show him the door. You've just encountered one of the lazy agents I mentioned earlier.

4. Set Your Asking Price

The next step to selling a house is the asking price. If you have followed the previous steps up to this point, you should have a pretty good idea where to set your price. At a minimum, you should be looking at comparable sales in the area. You might even want to have a professional appraiser come out to review the house. Whatever you do, it's crucial that you establish a realistic asking price from the beginning.

It all comes down to how quickly you want to sell your house:

• If time is on your side, and you want to make the highest possible profit, then you might price your home higher than comparable sales. Who knows, maybe you'll get lucky and find a buyer who doesn't know the market value of homes in your area. But I can tell you these buyers are few and far between.
• If selling the house quickly is your highest priority, then you need to price it closer to the comps. This will increase your chances of getting an offer sooner rather than later.

If you're working with a talented real estate agent, this process will be fairly simple. Your agent should create a spreadsheet of recent sales in the area, including the sale price, square footage, property features, etc. You can use this data to establish a realistic price for your own house.

Note: This concludes the first part of our checklist for selling a house. You can continue reading part two here.