Selling a home can be one of the biggest decisions you make in your life. The process can seem long and confusing if you aren't prepared. When you look for a realtor, be sure to find someone who takes the time to help you set expectations, timelines and strategies so you can protect and your most important investment, reduce stress, be in control of your situation, and make the most profit possible. These 27 Tips will help you set yourself up for success during the home selling process.
1. Understand How Your Motivation for Selling Affects the Sale Process
There are generally three types of sellers.
- The seller who needs to get a certain dollar amount from their sale
- The seller with a tight timeline
- The seller who just wants to test the water
There is no right or wrong reason to sell a home, however the motivation will determine the amout of time, money and effort you invest in preparing your home for sale, and will also affect the pricing strategy. Your realtor will be able to advise you on the upgrades, repairs and market positioning that will help you meet your goals.
2. Understand the Psychology of a Buyer
Look at your home through the lens of a buyer. A buyer is not concerned with your needs or wants, so removing yourself from the equation can help you understand what the buyer sees when they look at your home. Your buyer will primarily be concerned with the condition of the home and possible repairs versus the cost to them. As most buyers have a strict price range and set of desired features, they have likely seen several homes with the exact same stats as yours, and they will automatically file yours ahead or behind other homes in terms of getting the most house for the least amount of money. In addition to physical and monetary features, a buyer is also looking for the intangible feeling of being comfortable and welcomed, but in a non-personal way. Think of a hotel suite. Walking into a pristine and beautiful space just for you is a wonderful feeling, but how quickly would that feeling fade if someone else's personal items were in the room?
3. Before Setting a Price - Do Your Homework
Price is a misleading word in real estate. Rarely does a home sell for the amount it is listed at, however the goal as a seller is to have your home sell for as close as possible to that list price. Your home can be offered to thousands of buyers, but if it isn't the right product at the right time, in front of the right person, it won't sell. Come in too high, and buyers won't take you seriously, but too pricing too low can result in selling for a much lower price than you were hoping for. We always recommend a tiered pricing strategy.
Valuing a home is complex, including the evaluation of size, features, and condition in relation to similar homes to determine a starting price for your marketing plan. Look at recent sales in your neighbourhood of homes with simliar or identical floorplans and of the same age as your home. As neighbourhoods change over time, each home may be different in various ways, making finding a directly comparable home more challenging. Remember, the list price is not the sold price, and in Canada the sold price of homes is not publicly available. A realtor has access to this and more information regarding the real estate market and the homes within it, and your agent will be able to help you narrow in on the appropriate price range for your home.
4. Do Some "Home Shopping" Yourself
The best way to learn about learn about your competition and find out how buyers feel when they view a home is to look at other houses. Open houses are a great way to do this because they are free, and open to the public. Take note of floor plans, condition, appearance, size of the lot, location, as well as decor and design choices and how they impact the feel of the home. The realtor hosting the open house will likely have information on other homes sold in the area. Remember, if your goal is to sell your home fast, don't price it higher than your neighbour's!
5. When Getting an Appraisal is a Benefit
Appraisals generally happen after you receive an offer. The lender for the buyer's mortgage will request an appraisal to approve the financing. While the appraised amount does not determine the market value of your home, it tells the lender how much risk there is for them - they are looking for an amount that is similar to or higher than the selling price. Getting an appraisal before selling can be a good way to show buyers the value in your home. You'll occasionally see headlines on listings that the home was appraised over market value. However, an appraisal does cost money, has a limited life, and there's not guarantee you'll like the figure you hear.
6. Tax Assessments - What They Really Mean
Many home owners look at their annual tax assessment and are pleased to see the numbers increase. Then when it comes time to sell, they are surprised to learn that tax assessments are not always indicative of the value of the home. The challenge here is that the city assessment is based on criteria derived from the overall size, shape, and location of your property. It does not take into consideration the condition of the home, or interior upgrades. It also does not factor in that proximity to different things - amenities, schools, major routes - can affect how desireable the home is to buyers, which is always reflected in the market value of your home.
7. Choosing a Realtor
According to the National Association of Realtors, nearly two-thirds of the people surveyed who sell their own homes say they wouldn't do it again themselves. Primary reasons included setting a price, marketing handicaps, liability concerns, and time constraints. When deciding upon a Realtor®, consider two or three. Be as wary of quotes that are too low as those that are too high. All Realtors® are not the same! A professional Realtor® knows the market and has information on past sales, current listings, a marketing plan, and will provide their background and references. Evaluate each candidate carefully on the basis of their experience, qualifications, enthusiasm and personality. Be sure you choose someone that you trust and feel confident that they will do a good job on your behalf.If you choose to sell on your own, you can still talk to a Realtor®. Many are more than willing to help do-it-your-selfers with paperwork, contracts, etc. and should problems arise, you now have someone you can readily call upon.
8. Ensure You Have Room to Negotiate
Before settling on your asking price make sure you leave yourself enough room in which to bargain. For example, set your lowest and highest selling price. Then check your priorities to know if you'll price high to maximize your profit or price closer to market value if you want sell quickly.
9. Appearances Do Matter - Make them Count!
Appearance is so critical that it would be unwise to ignore this when selling your home. The look and "feel" of your home will generate a greater emotional response than any other factor. Prospective buyers react to what they see, hear, feel, and smell even though you may have priced your home to sell. Complete the "First 90 Seconds" test to find out what your home's first impression is.
10. Invite the Honest Opinions of Others
The biggest mistake you can make at this point is to rely solely on your own judgment. Don't be shy about seeking the honest opinions of others. You need to be objective about your home's good points as well as bad. Fortunately, your Realtor® will be unabashed about discussing what should be done to make your home more marketable.
11. Get it Spic n' Span Clean and Fix Everything, Even If It Seems Insignificant
Scrub, scour, tidy up, straighten, get rid of the clutter, declare war on dust, repair squeaks, the light switch that doesn't work, and the tiny crack in the bathroom mirror because these can be deal-killers and you'll never know what turns buyers off. Remember, you're not just competing with other resale homes, but brand-new ones as well. You want your home to be "the prettiest girl at the party".
12. Allow Prospective Buyers to Visualize Themselves in Your Home
The last thing you want prospective buyers to feel when viewing your home is that they may be intruding into someone's life. Avoid clutter such as too many knick-knacks, etc. Decorate in neutral colors, like white or beige and place a few carefully chosen items to add warmth and character. You can enhance the attractiveness of your home with a well-placed vase of flowers or potpourri in the bathroom. Home-decor magazines are great for tips. Most realtors include a staging walk-through before photos to ensure your home looks great online and in person!
13. Deal Killer Odors - Must Go!
You may not realize but odd smells like traces of food, pets and smoking odors can kill deals quickly. If prospective buyers know you have a dog, or that you smoke, they'll start being aware of odors and seeing stains that may not even exist. Don't leave any clues.
14. Be a Smart Seller - Disclose Everything
Smart sellers are proactive in disclosing all known defects to their buyers in writing. This can reduce liability and prevent lawsuits later on. It will also communicate to the buyer that any defects are already accounted for in the asking price, giving them less negotiating power.
15. It's Better With More Prospects
When you maximize your home's marketability, you will most likely attract more than one prospective buyer. It is much better to have several buyers because they will compete with each other; a single buyer will end up competing with you.
16. Keep Emotions in Check During Negotiations
Let go of the emotion you've invested in your home. Be detached, using a business-like manner in your negotiations. You'll definitely have an advantage over those who get caught up emotionally in the situation.
17. Learn Why Your Buyer is Motivated
The better you know your buyers the better you can use the negotiation process to your advantage. This allows you to control the pace and duration of the process. As a rule, buyers are looking to purchase the best affordable property for the least amount of money. Knowing what motivates them enables you to negotiate more effectively.
18. What the Buyer Can Really Pay
Having a knowledge of the typical price range of a prospective buyer looking at your home will give you the ability to negotiate more precisely so you can end in a win-wn situation.
19. When the Buyer Would Like to Close
Quite often, when buyers would "like" to close is when they need to close. Knowledge of their deadlines for completing negotiations again creates a negotiating advantage for you.
20. Never Sign a Deal on Your Next Home Until You Sell Your Current Home
Beware of closing on your new home while you're still making mortgage payments on the old one or you might end up becoming a seller who is eager (even desperate) for the first deal that comes along. Check out our Guaranteed Sale and Trade Up Program for more information on the Real Estate Catch-22!
21. Moving Out Before You Sell Can Put You at a Disadvantage
It has been proven that it's more difficult to sell a home that is vacant because it becomes forlorn looking, forgotten, no longer an appealing sight. Buyers start getting the message that you have a another home and are probably motivated to sell. This could cost you thousands of dollars. Staging is a great way to present a welcoming front even if the home is vacant.
22. Deadlines Create A Serious Disadvantage
Don't try to sell by a certain date. This adds unnecessary pressure and is a serious disadvantage in negotiations.
23. A Low Offer - Don't Take It Personally
Invariably the initial offer is below what both you and the buyer knows he'll pay for your property. Don't be upset, evaluate the offer objectively. Ensure it spells out the offering price, sufficient deposit, amount of down payment, mortgage amount, a closing date and any special requests. This can simply provide a starting point from which you can negotiate.
24. Turn That Low Offer Around
You can counter a low offer or even an offer that's just under your asking price. A counter offer lets the buyer know just how willing you are to move, as well as communicates just how seriously you are considering their offer. Your realtor will advise you on the best counter offer for your particular situation.
25. Maybe the Buyer's Not Qualified
If you feel an offer is inadequate, now is the time to make sure the buyer is qualified to carry the size of mortgage the deal requires. Inquire how they arrived at their figure, and suggest they compare your price to the prices of homes for sale in your neighborhood.
26. Ensure the Contract is Complete
To avoid problems, ensure that all terms, costs and responsibilities are spelled out in the contract of sale. It should include such items as the date it was made, names of parties involved, address of property being sold, purchase price, where deposit monies will be held, date for loan approval, date and place of closing, type of deed, including any contingencies that remain to be settled and what personal property is included (or not) in the sale.
27. Resist Deviating From the Contract
For example, if the buyer requests a move-in or to leave items on the property prior to closing, just say no and that you've been advised against it. Now is not the time to take any chances of the deal falling through.