MVP Heroes Housing Network - Home Seller

HOME SELLER GUIDE

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Selling a home involves many moving parts — some that you can control, and some that are out of your hands. The real estate market has shifted significantly since the frenzied heights of the pandemic. Today, high prices are combining with high interest rates to create serious affordability challenges.

As a seller, it’s smart to be prepared and control whatever factors you’re able to. Things like hiring a great real estate agent and maximizing your home’s online appeal can translate into a smoother sale and more money in the bank.

SET A TIMELINE FOR SELLING YOUR HOME Selling a house is a major undertaking that can take several months from start to finish or longer, depending on local market conditions, so set a realistic timeline. As soon as you decide to sell your house, jump right into researching real estate agents to find someone with the right experience for your situation. At least two or three months before you plan to list, consider getting a pre-sale home inspection. This isn’t mandatory but can be useful to identify any problem areas, especially if you suspect serious issues. Leave enough time to schedule necessary repairs. About a month before listing your house, start working on deep cleaning in preparation for taking listing photos. Keep clutter to a minimum, and consider moving excess items to a storage unit to show your home in its best light.

HIRE AN AGENT WHO KNOWS THE MARKET Research and properly interview real estate agents ensuring you hire an agent that best fits your needs with experience in the marketplace. Learn how long they’ve been in the industry, how many sales they’ve closed and what designations and certifications they may have earned. Pay attention to how and where they market their listings, and how professional their listings’ photos look.

Some homeowners might be tempted to save on paying a commission and instead sell their home themselves, without an agent. This is known as “for sale by owner,” or FSBO. However, remember that as the seller, you’ll still need to pay your buyer’s agent’s commission — and that an agent does a lot to earn their fee. For example, they can expose your house to the broadest audience and negotiate on your behalf to garner the best offers possible. If you go alone, you’ll have to personally manage prepping your home, marketing it, reviewing buyers’ offers and handling all the negotiations and closing details.

HOME SELLER GUIDE

DETERMINE WHAT TO UPGRADE Before you spend money on costly upgrades, be sure the changes you make will have a high return on investment. It doesn’t make sense to install new granite countertops, for example, if you only stand to break even on them, or even lose money. Plus, these improvements may not be necessary to sell your home for top dollar, particularly if inventory levels are low in your area (which they are in most areas these days). A good real estate agent will know what local buyers expect and can help you decide what needs to be done and what doesn’t.

There’s also the option of getting a pre-sale home inspection. This isn’t mandatory, but it can be a wise upfront investment, especially in an older home. For a few hundred dollars, you’ll get a detailed inspection report that identifies any major problems.

This alerts you in advance to issues that buyers will likely flag when they do their own inspection later in the process. By being a few steps ahead of the buyer, you might be able to speed up the selling process by doing repairs in tandem with other home-prep work. Then, by the time your house hits the market, it should be ready to sell, drama-free and quick.

SET A REALISTIC PRICE Even in competitive markets, buyers don’t want to pay more than they have to, so it’s crucial to get the pricing right. Going too high can backfire, while underestimating a home’s value might leave money on the table. To price your home perfectly from the start, consult local real estate comps. This information about recently sold properties in your neighborhood gives you an idea of what comparable homes around you are selling for, thus helping you decide how much you might reasonably ask.

Listing high with multiple price reductions may give buyers the impression there’s something wrong with it. So, it’s best to eliminate the need for multiple reductions by pricing your home to attract the widest pool of buyers from the start.

LIST YOUR HOUSE WITH PROFESSIONAL PHOTOS This step will likely involve your real estate agent hiring a photographer and registering the listing with the local MLS (multiple listing service). Here are some tips to get your home market-ready: •

Take professional photos: Work with your agent to have a photographer capture marketing photos of your home. With the ubiquity of online house-hunting these days,

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high-quality photos are critical. A pro photographer knows how to make rooms appear bigger, brighter and more attractive. The same goes for your lawn and outdoor areas.

Focus on online appeal: You’ve probably heard of curb appeal, but professionals say online appeal is now even more important. In fact, 100 percent of homebuyers use the internet to search for a home, according to the National Association of REALTORS, so online listings are crucial.

Stage it and keep it clean: Staging a home entails removing excess furniture, personal belongings and unsightly items from the home and arranging rooms for optimal flow and purpose. If you’re in a slower market or selling a luxury home, investing in a professional stager could help you stand out.

Clear out for showings: Make yourself scarce when potential buyers come to view your home. Let them imagine themselves in the space, free from the distraction of meeting and talking to you. Generally, buyers are accompanied by their real estate agent to view your home. You can also ask your own agent to be present at showings.

REVIEW AND NEGOTIATE OFFERS Once buyers have seen your home, the offers will ideally start rolling in. (Keep in mind, though, that with mortgage rates currently so high, the number of buyers who can still afford to buy might be smaller than you’d like.) This is where a real estate agent is your best advocate and go-to source for advice. If your local market favors sellers, buyers will likely offer close to asking price, or possibly even above. On the other hand, if sales are slow in your area, you may have to be open to negotiating.

When you do receive an offer, you’ll have a few choices: accept it as-is, make a counter-offer or reject the offer. A counter-offer is a response to an offer in which you negotiate on terms and/or price. You can offer a credit for fresh paint and carpet, for example, but insist on keeping your original asking price in place. Counters should always be made in writing and provide a short timeframe (ideally 48 hours or less) for the buyer to respond.

WEIGH CLOSING COSTS AND TAX IMPLICATIONS In any real estate transaction, both parties must pay at least some closing costs. The seller typically pays the real estate agents’ commissions.

Some other closing costs commonly paid by the seller include transfer taxes and recording fees. Additionally, if the buyer has negotiated any credits to be paid at closing — to cover repairs, for example — the seller will pay those, too. Your real estate agent or the closing agent

HOME SELLER GUIDE

should provide you with a complete list of costs you’ll be responsible for at the closing table.

The good news is that you may not owe the IRS taxes on your profits from the sale. It depends on whether it was your primary residence, how long you lived there and how much you make on the sale. If you’ve owned and lived in your home for at least two out of the previous five years before selling it, then you will not have to pay taxes on any profit up to $250,000. For married couples, the amount you can exclude from taxes increases to $500,000.

If your profit from the home sale is greater than that, though, you’ll need to report it to the IRS as a capital gain.

GATHER PAPERWORK AND CLOSE Lots of paperwork is needed to properly document a home sale, so keep it organized all in one place to help things go more quickly. Your agent can help you make sure you’ve got everything you need. Some of the main documents you’ll need to compile include: • • • • • • •

Original purchase contract Property survey, certificate of occupancy and certificates of compliance with local codes Mortgage documents Tax records Appraisal from your home purchase Homeowners insurance Home inspection report if you had one

Finally, bring all that paperwork — plus payment of any fees and the keys to give the new owners — to the closing. Once everything is signed and handed over, your house is sold!

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