Selling

If you thought the home-buying process was stressful, selling your home is no walk in the park either. 

Unlike buyers, who often have the privilege of patience, many motivated sellers who rely on the sale of a home to finance the purchase of a new one need to act fast. 

To best prepare you for this process, we’ve outlined seven steps to selling a house that will help streamline your next real estate transaction. 

Step 1: Hire an Agent

Your first move when you decide it’s time to sell should be to contact your local real estate agent. Agents offer access to a bevy of important tools, including inspectors, marketing services, multiple listing services (MLS), and pricing tools to calculate the value of your home. 

Your agent can help you along every step of the process, from listing and marketing your home to negotiation. In turn, your agent will not only ensure your house sells on time but for the right price. 

This is why finding the right agent is so important to selling your home. 

Qualities to Look for in an Agent: Reputation: Look for testimonials and reviews online from past clients who have used that agent to buy or sell a home. Experience: Look through an agent’s portfolio to see what types of property they have sold in the past and their success rate at doing so. Negotiation Skills: This may be a more interpersonal trait, but try and find an agent who you trust to negotiate on your behalf.

Qualities to Avoid in an Agent: Dual Agency: Agents who represent the buyer and seller often won’t have the best interest of either party at heart. No Cancellation Options: Many agents offer listing agreements, which are binding contracts that hold for several months. This will be difficult to get out of if you are not satisfied with the agent.

Step 2: Prepare the Home for Sale

Before you list and market your home, your agent will recommend you make any improvements that can increase the value of your home. 

Improvements may include minor, aesthetic, or even deep structural repairs, such as installing a new roof.  

Ideally, you’ll want to improve its curb appeal and eliminate any issues that could delay or sour any deals you try to make

To-Do List: Clean up all clutter out of the yard and house. Deep clean the interior of your home. Remove any bugs or insects inside the home.  Ensure proper landscaping, including mowing and pruning. Apply a fresh coat of paint to doors, windows, and siding.  Add fresh flowers and mulch to gardens and yards to spruce up the property. Fix any minor issues, including malfunctioning lights, plumbing issues, etc. Fix any deep structural issues, including roofing, foundation, or flooring (cost permitted).

Step 3: Get Your Home Priced

Next, you’ll want to get your home accurately priced to ensure that you retain the maximum value of its sale and get it sold quickly. 

Your agent will offer several resources to accurately price your home, including online calculators, performing a comparative market analysis, or even hiring an appraiser. 

Common Pricing Mistakes to Avoid Listing Too High: Listing homes too high often doesn’t yield the best returns. In fact, it may stifle competition for your home by preventing competitive bidding. Continually Lowering the Price: Constantly lowering the price of your home and keeping it on a listing service for several months will give buyers the perception that something is wrong.  Not Factoring in Closing Costs: Sellers can give buyers a break by factoring in closing costs to their final sales amount. Closing costs typically resemble 3% to 6% of the final price amount.  Disregarding Seasonality: Homes sold in the spring tend to yield the highest price, so price your home strategically based on the seasons.

Step 4: Market and List Your Home

Once priced, it’s time to start listing and marketing your home. There are a variety of online platforms like Zillow and Redfin to list your home, but your realtor will have access to an agent’s-only MLS. 

An MLS gives agents more detailed information about properties than traditional listing platforms and provides unique advantages to buyers and sellers alike. 

During this stage, you can also host open houses to invite competitive bids or let your agent show your home via private viewings. However, to make the most of your home online and in-person, it pays to properly stage and photograph your home. 

Tools Required: Photography Equipment Staging Materials (Furniture, Lighting, Decor)

 

Resources to Market Your Home: MLS Real Estate Platforms Social Media Newspaper

Step 5: Negotiate Offers

By this point, you should be starting to field a few offers if you priced and marketed your home properly. 

You can mostly leave negotiating up to your realtor to try and get the best price, though you’ll have the final say over what you are willing to sell your property for. 

Questions to Ask Before Accepting an Offer: Does this buyer meet my price range? What type of financing are they using? Cash? Loans? Are they pre-approved for a mortgage? Are they willing to pay for closing costs? Am I willing to pay for closing costs? Are they the right buyer for my house?  Are they amenable to waiving contingencies?

Step 6: Complete Inspection and Appraisal

Once a home is under contract, you will need to go through the stressful stages of inspection and appraisal.

Inspection comes first and can help identify any lingering issues that need addressing before selling a home. The buyer may waive these repairs or the need for inspection altogether, or they may ask for you to make the repairs before the home is sold. In other instances, they may even ask you to lower the price.

However, this doesn’t mean you can hide any lingering issues, as most states require you to disclose any issues to potential buyers before you close on a contract.

Furthermore, these issues will be priced into your appraisal. If the appraisal comes back at a different price than your home is under contract for, you or the buyer may be eligible to renegotiate the contract before closing on the home.

Since renegotiation can delay closing, it’s often ideal to complete these steps before even listing your home. 

Step 7: Finalize Closing

Once everything is squared away, you and the buyer can close on the sale of the home.

Luckily, there are several loopholes that allow you to avoid capital gains tax. For example, if you lived in a home for two out of the last five years (it doesn’t have to be consecutive), you don’t have to pay capital gains on the first $250,000 in equity you gain if you’re single or $500,000 if you’re married. 

The steps to selling a home are straightforward, though they do come with their ups and downs. To mitigate your stress, be sure to find a real estate agent you can trust who will walk you through the whole process. 

FAQs: Selling Your Home

What is the best time to sell a home?

Most experts recommend selling your home between March and Labor Day when real estate markets are hot. The slowest months of the year typically include November through February. 

Can I sell my home while still living in it?

There are ways to negotiate with a buyer to allow you to dwell in a home before it is sold. For example, some buyers will allow it, while some may require you to sign a leaseback agreement or home reversion.  

How long does the selling process typically take?

Selling a home can take anywhere from two to six months. Typically, it takes two to four months to list and market a home, while it takes 30 to 60 days for the home to close under contract. 

Like most Americans, you’ve probably witnessed the value of your home climb exponentially over the last few years. But this doesn’t mean it will stay like that forever or that demand will always be there to overrun supply. 

With just a few minor or major home improvements, you can increase your odds of selling your home on time and recouping the most value from that sale. 

This guide will outline fifteen home improvements that will add value to your home, sorted by cost and category. 

Increase Curb Appeal

If first impressions are everything, then curb appeal is the first impression a potential buyer will get when they visit your home. Increasing curb appeal is a low-cost, high-reward project that will make buyers more motivated to place an offer on your home. 

Landscaping

Landscaping is the easiest way to increase curb appeal, and you can do most projects DIY. Simple DIY landscaping tasks that increase home value include:

• Mowing the lawn
• Cleaning up clutter
• Trimming hedges and bushes
• Planting flowers
• Applying fresh mulch

Installing window boxes with fresh flowers or trimming overgrown trees is also recommended, though they require more technical prowess.  

Add Fresh Paint

A fresh coat of paint is an affordable and easy way to make your home pop and stand out among others in the neighborhood. Even repainting fixtures, window sills, or your front door can add instant value to your home and increase a buyer’s likelihood of making an offer. 

Update Outdated Fixtures

Outdated fixtures like lamp posts, railings, and porch blinds can easily be updated with more modern or beautiful pieces that make your home more visually appealing. Most fixtures are easy to install on your own and don’t require professional help. 

Install Outdoor Lighting

Outdoor spotlights are another great way to make your home more appealing, especially at night. There are several affordable solar lights you can purchase, or you can hire an electrician to wire in some new spotlights. 

Invest in Energy Efficiency

Energy efficiency is a major perk that many new homeowners look for in a new home, especially as energy prices have skyrocketed over recent years. Fortunately, you can increase the energy efficiency of your home without breaking the bank in many cases. 

LED Lights

LED lights are inexpensive and last longer than traditional incandescent lights. Thanks to new regulations from the Biden administration, most homes are switching to LED lights regardless, but it’s still a quick and easy investment to make your home more efficient. 

Insulation

Before you upgrade your heating system, have you ever thought about upgrading your insulation? New insulation costs anywhere from a few hundred dollars to thousands, depending on square footage. 

However, thanks to new materials, such as spray foam and cellulose, you can insulate your home fairly cheaply while also saving the home hundreds of dollars annually on heating and cooling bills. 

Solar Panels

Recent studies from Zillow have shown that homes with solar panels sell for 4.1% more than those without. You’ll need to balance the potential resale value of your home against the cost of installing new panels to see if it is worth the price. Residential solar panels cost above $10,000 on average and may only be worth it for certain homes.

New HVAC Systems

New heat pumps and energy-efficient AC systems add significant value to a home, which may outpace the cost of installing these systems in many cases. 

Make Your Home Smarter and Safer

Smart home appliances are a revolutionary new technology that may not give your home a substantial bump in value but can greatly increase its appeal among interested buyers.

Add Smart Appliances

Some of the most common smart appliances homeowners desire include:

• Smart Thermostats
• Smart lighting
• Smart surveillance systems

Of course, there are dozens of other smart appliances, including stoves, refrigerators, etc., but most of these will not do much to increase your home’s value. 

Thankfully, most of these products are relatively inexpensive and cost no more than a few hundred dollars to install.

Invest in Home Security

A survey from the National Council for Home Safety and Security found that homes with a security system sold for 3.5% more. Home security systems are in high demand among homebuyers, and it’s an easy way to tack on extra value to your final home price. Even installing a ting doorbell or an alarm system can go a long way in making your home more appealing. 

Renovate a Room

Home renovations deliver one of the highest returns on the value of any home improvement project you can undertake. In particular, bathroom and kitchen remodels offer the highest returns. 

Bathrooms

A study from House Model reported that bathroom renovations in all 50 states recouped enough value to pay for the cost of the remodel. Bathrooms are far less expensive to remodel than kitchens and minor remodels tend to deliver the highest ROI. Some of the work can even be done DIY, though you can still expect a fairly hefty price tag.

Even swapping out old fixtures for new ones or redoing your bath can add substantial value to a home. 

Kitchens

The modern kitchen is perhaps the number one trait that house hunters desire in a new home. Kitchen remodels typically recoup up to 100% of their value and there are plenty of affordable materials to get you started. Granite countertops are cost-effective and tend to hold their value, while new kitchen appliances can add value without the need for expensive contractors. 

Increase Square Footage

One investment that is almost guaranteed to increase your home’s value and pay for itself is increasing your home’s usable square footage. Many of these projects are actually fairly affordable and some can be done DIY. Just be aware that it can also increase your home’s taxable value. 

Enclose a Patio or Porch

Enclosing a patio or porch is a low-cost investment that adds usable square footage to a home. Projects range in cost from $500 to $3,000, depending on the size and scope. These projects also save you from investing in other renovations, such as a mudroom. 

Build a Deck

A deck is another low-cost investment that can add substantial value to a home. Create an outdoor living space for recreation by building a spacious outdoor deck. Decks add even more value for homes with small backyards by giving people a place to congregate outside. 

Finish a Basement or Attic

Tack on a usable room to the house by finishing a basement or attic. These rooms add additional living space for recreation or can even double as another bedroom if your home is short on bedrooms for prospective buyers. 

Ways to Finance Home Improvements

Financing home improvements for sale can be a tricky game, especially because you want to recoup the full value of your investment. Nevertheless, there are some sources of income you can tap into for much-needed cash flow on the fly. 

• Personal Loan: A personal loan from a friend or relative is the least risky investment you can make to finance a home purchase. Depending on the lender, you may not even have to pay back interest, and you can pay back the full loan once the sale of the home is finalized. 

• Credit Card: Many small home purchases can be financed with a credit card and paid off in installments or at the home’s sale. Many credit cards offer 0% APR for the first year, which you can use to hold your debt without piling on interest.

• HELOC: Home equity line of credit loans allow you to tap into your home’s equity as collateral for a second mortgage on your house. The tricky thing about HELOC loans is that you want your investment to recoup its value so that you don’t actually lose out on that sweet equity you’ve built up.
• Cash-Out Refinancing: Refinancing allows you to renegotiate your loan for a larger loan and collect the cash difference between the two loans. Again, this type of financing is best used if you have lots of equity built up and if the total cash you take out and the amount you’d make at sale is greater than the difference in the loans. 

Oftentimes, investing in your home is not just about increasing its value but also increasing its likelihood of selling on time. If you’re a highly motivated seller, then improving your home will be a great way to help it sell quickly. 

Just remember to research the potential cost of a project and balance that with the estimated return on your investment. 

FAQs: How to Add Value to Your Home

How do I estimate my home’s current value?

There are several ways to estimate your home value:

• Enter your home in a free online estimator
• Get an appraisal
• Look at what comparable homes in the area have sold for
• Talk to a broker or realtor

Which renovations provide the highest return on investment (ROI)?

Every renovation is different and the ROI of any project will depend on your particular market. With that said, some of the most lucrative home renovation projects typically include:

• Landscaping
• Minimal bathroom remodel
• Mid-range kitchen remodels
• Siding replacement
• Bathroom additions
• Basement remodel
• Attic remodel
• Garage door replacement

Should I DIY or hire professionals for home renovations?

The answer to this question depends on your budget or level of expertise. However, it’s always best to work with a trusted professional to yield the best results.