Dos and Don’ts of Selling a Home: A Guide for First-Time Sellers

Peter Warden

 

 

Selling your home for the first time

Just like buying a home for the first time, selling yours can be an exciting venture.

Similarly still, it comes with a list of things you should and shouldn’t do in order to get the best deal for yourself.

Read on to see the best ways to prepare yourself and your property before putting it up for sale.

 

 

Dos of selling a home

Most real estate agents now talk about marketing a home rather than selling a home. And they’re right to do so.

Selling techniques get you only so far. That means understanding what motivates your “target market,” which is the pool of potential buyers who are looking to buy a property in your area and price range.

Put yourself in their shoes and try to imagine what most of them want. At a minimum, it’s safe to assume they’ll be looking for a home that is:

1. In good condition — no cracked sidings, missing tiles or other obvious defects
2. Clean and smelling fresh
3. Attractive from the street and with tidy yards, front and back
4. Tastefully decorated in mainstream, neutral colors
5. Uncluttered
6. Somewhere they can easily aspire to live in

Get those things right before you even begin to market your home and you’ll give yourself a head start.

Should you use a real estate agent when selling a home?

Real estate agents charge high commissions, often between 5% and 6% of the sale price, depending on where you live. And nobody likes paying out that sort of money.

But you might benefit from appointing an agent for the first time you sell, if only because that buys you a ringside seat of the whole process. That way, you can use what you learn when you’re selling in the future.

Plus, many sellers value the service they get enough to continue using agents for all their future sales. The range of functions and expertise they provide throughout the sales process can often be the difference between a quick sale at a great price and a slow one that sees you settling for too little. But you must pick a good one.

Should you get a seller’s home inspection?

Traditionally, the buyer commissions a home inspection. So why would the seller pay an average of $340 for one before even putting the home on the market?

Well, it’s a marketing tool. An independent home inspection can give buyers confidence that they’re not buying a money pit with hidden defects. Or if there are defects, they are clear and easy to assess. And that might embolden potential buyers to offer a higher price than they otherwise would.

Are these worth it? The International Association of Home Inspectors lays out the pros and cons from the inspector’s point of view. But it’s also revealing for home sellers.

Setting the right asking price

If you have a real estate agent, you should explore the optimum asking price with them. A good agent will understand the current dynamics of the local housing market and provide good advice. But it’s ultimately your choice.

The danger of asking too high a price is that your home might sit on the market for months or years with close to zero interest. And every potential buyer will have seen it and actively ruled it out. That presents the risk of eventually having to reduce the price, perhaps to less than you could have gotten within weeks had you listed it more reasonably.

If you’re not using an agent, it’s up to you to decide your own asking price. To figure out your property’s value, there are four helpful tips to follow.

 

 

Don’ts of selling a home

Marketers talk about the “Four Ps,” which are fundamental to success: product, price, place, promotion (aka the “marketing mix”). Let’s use those as headings to explore the things that home sellers often get wrong.

Product

Don’t launch your product (your home) before it’s ready to market. Your job is to optimize its appeal to as many people in your target demographic as possible.

We listed the basic requirements in the opening section of this article. But don’t spend too much on preparing your home for sale (see next section). The chances of getting your money back on major works (remodeling, additions, landscaping) are slim. So, stick to the basics.

 

Price

No matter what you’re marketing, getting your price point right is vital. We covered that in the last section.

Place

No, we’re not going to suggest you physically move your home. In this context, “place” refers to the environments where you are going to market your product. If you have one, your agent should handle this.

Today, an online presence is essential. You should always get your home on the Multiple Listing Service (MLS). Your agent should do this for free. But you can get a listing on the MLS for a small fee ($99 is sometimes advertised) if you’re selling by yourself. And find other online outlets, such as community boards and local media, though you may have to pay for some ads.

Consider a For Sale sign in your front yard to catch desperate home buyers who often cruise the neighborhoods in which they want to buy. You could even try delivering flyers to neighbors and leaving bunches of them in local stores.

 

Promotion

Again, this is your agent’s job. But, if you’re a do-it-yourself seller, this is the range of marketing techniques (the “promotional mix”) open to you: advertising, sales promotion, publicity (PR), direct marketing (direct mail and email) and personal selling.

Personal selling is huge if you’re marketing a home by yourself. It’s when you show people around your home and negotiate with them. Sales promotion could be an open house, complete with balloons and an invitation sign outside and refreshments inside.

Advertising is likely the most expensive but gives your message reach. Publicity (free coverage of the fact the home’s for sale in news media) is unlikely unless your property is unique or historically important. Direct marketing? Well, if friends or relations have admired your home in the past, reach out to let them know it’s for sale.

Disclosures

This has nothing to do with marketing or promotions. But it’s a legal requirement across America. Legal website NOLO explains:

“When selling your home in the United States, you are likely obligated to disclose problems that could affect the property’s value or desirability. In all states, it is illegal to actively, fraudulently conceal major physical defects in your property. Beyond this, however, most states’ laws require sellers to take a proactive role in making problems known to buyers, by making written disclosures about the condition of the property, usually using a standard form.”

NOLO also lists disclosure laws by state. Don’t get this wrong or your buyer could sue you — and likely win.

 

 

Preparing your home for sale

We already listed the minimums that most buyers are likely to require in the opening section. But this is something many buyers struggle with.

When you’re living in it, there’s absolutely nothing wrong with your home being an expression of your personality. So what if some people find your color scheme garish or your decorations too much? It’s your home.

But when you come to sell, you either cater to majority tastes you might find bland — or risk selling for a lower price than you could otherwise achieve with a narrowed pool of interested buyers.

Do-it-yourself staging

Unless your home is worth a fortune, you won’t want to get it professionally staged. But check out listings of high-end properties that have been and try to copy that look.

Find another place to store your knickknacks, ornaments, collections and any oversized furniture that makes your rooms look smaller than they really are. Similarly, store any excess clothing and shoes that make your closets look inadequate or cluttered.

Decorate in the neutral shades you see on property renovation shows and in magazines. And add splashes of color using framed prints and posters, cushions and rugs. If you don’t have those, consider buying some that you like and taking them with you to your next home. With art, make sure you don’t display anything anyone is likely to find offensive.

 

The sweet smell of a sale

Even more important than your home looking great is that it’s scrupulously clean and smells good. If you lack the time, ability or inclination to do it yourself, hire a cleaning crew. Once it’s done, keep it that way. And pay particular attention to pet smells creeping back in.

Equally important, make sure any obvious defects are fixed before you list your home — no slipped or missing roof tiles, cracked sidings or damaged panes of glass. And try to spruce up (pressure washing or painting) the exterior as best you can. That should improve your home’s curb appeal.

 

 

Enhancing curb appeal when selling a home

Remember how we mentioned eager home buyers cruising neighborhoods? It’s why For Sale signs can be a good idea in your front yard.

But such signs are useless if they stand in an uncared-for yard. First impressions count. And that’s why real estate professionals go on about “curb appeal.” That’s how attractive your home is when potential buyers first see your home from the road.

And that applies to everyone, not just the weekend cruisers. Real estate agents have endless stories of buyers telling them to drive on because a home looks bad from the road.

It’s worth investing a little in upgrading your yard. If it has a lawn, keep it closely cropped and looking lush. Prune scraggly shrubs and trees. And buy some flowers that will bring color and beauty. Potted plants and hanging baskets can add yet more color and add to your home’s attractiveness.

Unless it’s visible from the road, your backyard doesn’t affect your home’s curb appeal. But you should still keep it in good shape. Your front yard will have raised expectations that you don’t want to dash. However, keeping it neat should be enough.

 

 

Negotiating with buyers when selling a home

This is the point where a real estate agent often really earns his or her commission. It’s difficult for an owner to remain calm and professional, especially when up against a buyer’s agent.

 

Don’t always immediately accept the highest offer. You need to be sure that the prospective purchaser:

1. Is preapproved for a mortgage. It’s hard to take offers seriously from buyers who haven’t got their financing lined up. They might easily drop out later
2. Requires only reasonable contingencies or none
3. Has sufficient cash resources to provide an “earnest money” deposit (which is payable on signing the sales agreement but will be deducted from the proceeds you receive on closing). If not, why not?
4. Will take ownership at a reasonably convenient time. There should be give-and-take on both sides when agreeing on the occupancy date

When you receive an offer, you may accept it, reject it or make a counteroffer. Your decision is likely to be largely determined by how easy it is to sell homes in the local housing market at that time. If it’s hard, you may have less leverage. Indeed, you might even be asked within the negotiation to agree to contribute to the buyer’s closing costs.

 

 

Closing the deal

Unfortunately, your duties don’t end when the sales agreement is signed. You’ll likely have to make your home available to a couple of professionals, the appraiser and the home inspector. And, if you don’t have a real estate agent, you might have to field queries from the buyer and chase progress across the whole process.

Closing day is when you finally receive the proceeds of the sale. But your real estate agent’s commission, the outstanding balance on your existing mortgage and any other related amounts due will be deducted before you get your hands on any cash.

 

And that might be a relatively small sum if most of your proceeds are going straight into a down payment on a home you’re buying. Often you’ll close on your purchase on the day you close on your sale so much of the money doesn’t touch the sides as it passes through.

Legal ownership of the home changes hands on closing day. And you’ll have to sign some documents before passing over the keys to your purchaser. Only then can you claim you’ve sold your home.

The process is overseen by an independent third party, sometimes an attorney, acting as a “settlement agent” or “escrowee.” And you’ll likely have to attend its offices on closing day.

 

 

Bottom line for home sellers

When you’re ready to sell your home, it’s important to take all the preparatory steps before listing. These include researching comps before setting your price, making your home clean and presentable, and boosting your curb appeal.

If you’re a first-time seller, a real estate agent can guide you throughout the process, providing valuable advice about how best to price and present your property. And their expertise and negotiating skills could see you save their commission.

Whichever route you take when selling your home, we hope your experience will be painless and profitable.