How to Sell Your House - Part 2 of 2
Editor's note: This is part two in our home-selling series. If you haven't read the beginning of this lesson, you might want to start here. This section picks up with the home-staging process.
Step 5 - Stage the Home Before Showing It
Some homeowners wonder if home staging is really necessary. I can save you time by telling you it's absolutely essential. It's not a question of whether or not you should stage your house. The real question is how to stage it effectively. If you're not familiar with this concept, the following definition will help:
Home staging is when you take certain steps to make your home appeal to the largest possible audience. If you want to sell your house, you need to make it more attractive to buyers. And that's the whole point of home staging. This process includes de-cluttering, painting, landscaping, rearranging furniture, and upgrading any outdated fixtures.
It's also important to make basic repairs to the property before you list it. That wobbly doorknob might not seem like a big deal to you. But it sends the wrong message to buyers. They're going to be thinking, "Well here's a homeowner who doesn't care much about maintenance. So if this doorknob is loose, there's probably a lot of other issues as well." This is the last idea you want to put in the buyer's head. It certainly won't help you sell your house.
Home staging goes beyond the basic repairs. Have you ever been to a newly built neighborhood and visited the model home? That's what you want your house to look like. You can do without the family photographs they often use in model homes. But aside from that, the strategy is the same.
Model homes are always nice and neat. They have well-placed furniture that is the right size for each room. They are freshly painted and sparkling clean. This is what you must accomplish before bringing buyers into your home.
Staging is so important when selling a house that I've created a separate tutorial on the subject. I recommend that you read it before listing your home.
Step 6 - Put Your House on the MLS
The Multiple Listing Service is a computer database of real estate listings. Every agent in your city uses the MLS to find homes for their clients. So if you want to put your house in front of the largest audience in the shortest time, you need to put it on the MLS.
If you're working with a real estate agent, he or she will handle this process for you. It's another thing to ask about when you are in the early stages of finding an agent. You want to make sure your chosen agent will list your house on the MLS, at a bare minimum.
If you're using the FSBO strategy to sell your house, you can still get your home listed on the MLS. You'll just have to pay a fee for it. You can learn more about that here.
Step 7 - Put Your Home on Realtor.com and Similar Websites
The Multiple Listing Service is helpful when selling a house. But it's not enough in my opinion. It represents the bare minimum for real estate marketing. If you want to sell your house quickly, you should also list it on Realtor.com. This is the number-one website used by home buyers who are shopping for a house.
Think of it this way. The MLS puts your house in front of local real estate agents. Realtor.com will put it in front of the buyers themselves. This is the best way to cover your bases, in terms of marketing.
This is another thing you need to ask about when screening real estate agents. Ask them about the specific steps they will take to promote your home. Find out how many pictures they will include on the Realtor.com listing. Ask if they can write up a nice description for your house, above and beyond the basic specifications listed on the site.
Promoting your home is one of the three P's of selling a house. If you'd like a refresher on the other two P's, check out the video below.
Step 8 - Disappear When the Buyers Come
When you were shopping for the home you're in now, did you ever visit a house with the homeowners hanging around? It was kind of awkward, wasn't it? This is the last thing you want for potential buyers who visit your house. You don't want them to feel rushed or awkward during this process. You want them to take their time so they can see everything that is good about your home.
If you want to sell your house, you need to give potential buyers a favorable impression of the place. That's why home staging is so important. And that's why you need to get out of Dodge when buyers are on the way over. You don't need to be there to let people into the house. They make lockboxes for that purpose.
Step 9 - Review Offers and Negotiate Accordingly
If you get a full-price offer from a qualified buyer, you should take it. This much is obvious. But what if the offer comes in below your asking price?
First, you need to consider how realistic your asking price is. If a buyer makes a low offer but supports it with a handful of comparable sales, then you've probably overpriced the home. In this scenario, you need to be realistic and make a counter-offer that's lower than the original asking price.
But let's assume you've done your market research and priced the home effectively. You looked at comparable sales to see what similar homes were selling for. Maybe you even had the home appraised, just to make sure the asking price was realistic. Then a buyer comes along and offers less than your asking price.
What you do in this situation will depend on several things:
- How low was the offer?
- How many other offers have you had?
- How active is your real estate market?
- How quickly do you need to sell the house?
These are the things you need to consider when reviewing a buyer's offer. If you need to sell your house as quickly as possible (and you have no other offers), then you need to be flexible. But if you've been showing the house every day, and you have other interested buyers, you might be able to take a harder line. It's a case-by-case scenario.
My advice is to put your ego aside and avoid a situation where you "nickel and dime" the buyer. Selling your house is your top priority right now, correct? If so, you need to be flexible when it comes to the offer. You never know when the next offer will come along. It might be three weeks -- or three months. So tread carefully.
Step 10 - The Home Inspection
After you accept the buyer's offer, they will probably schedule a home inspection within the next few days. There's not much for you to do at this point. You would just make sure the home inspector has access to the house, and then stay out of his way. Don't expect a copy of the inspection report either. The buyer is paying for the inspection, so they are the only ones who will get a copy of the report.
If you're lucky, the buyers won't request any repairs at all. This is often the case with homes that are relatively new. On the other hand, they might have several repair requests. Here again, you need to remember that the number-one goal is selling your house. It doesn't make sense to derail the process over a $300 repair request. So keep your eyes on the prize and be reasonable.
Most real estate agents advise their clients to ask for repairs only when there is legitimate damage or danger. For example, if there is some kind of flaw with the electrical system, the buyer should ask to have it repaired. The same goes for structural damage and broken items. But if a buyer asks for some kind of cosmetic improvement, they are overreaching. So my advice to you, the seller, is to handle the legitimate repairs and reject the cosmetic items.
Step 11 - The Home Appraisal
The home appraisal can be a real nail-biter when selling your house. This is when the buyer's mortgage lender sends an appraiser out to evaluate the house. If the appraisal comes in lower than the purchase price, you have a problem. The lender will not give a loan for more than the market value of the house. So you either have to lower the asking price to match the appraisal, or the buyer will have to come up with the difference out-of-pocket.
What happens next will depend on (A) the size of the difference and (B) the type of real estate market you are in. If the appraisal is only slightly lower than the asking price, and you're in a sellers market, the buyer may pay the difference out-of-pocket. But if there's a large difference between the appraisal and the purchase price, the buyer will probably look to you to lower the price.
This is another reason to do the pricing research we talked about earlier. If you use comparable sales to establish a realistic price from the very beginning, you probably won't ever be in this situation. But if you set your price based on what you need to get out of the deal, the appraisal could very well come in low.
This is another area where you need to put your ego aside and be realistic. Why did the appraiser come up with a certain number? He should be looking at recent sales of similar homes, in addition to evaluating your house inside and out. If he does this and comes up with a number lower than your asking price, there might be a legitimate reason for it.
Conclusion and Summary
This article offers a lot of tips to help you sell your house. But it can all be summed up with the three P's. If you want to sell your house quickly, you need to focus on pricing, reparation and promotion.
You need to establish a realistic price based on comparable sales. You need to stage the home so it appeals to the largest possible audience. And you need to promote it through highly visible channels such as the MLS and Realtor.com. If you do these three things, 90% of the process is in the bag. The rest is negotiation and paperwork.
Note: This is a two-part checklist on selling a house. If you haven't read the first part of the lesson, you can start here.