You started thinking about selling your house. It is an emotional process for most. You probably hear stories about people not being able to sell, not getting the price they were hoping to get, agents disappearing after the listing is taken, etc. This article will help you avoid the frustration that is often a part of this process, maximize the value of your home and help you move to your next destination with the smile on your face, instead of a nervous eye twitch.
I will talk about preparing your house for sale in a separate blog. Here, I want to discuss a few things you need to sort out before you start any work on the home itself. The main question you need ask yourself is WHY you are moving. Are you thinking about minimizing the expense, maximizing your comfort, not wanting worry about cutting grass or cleaning snow, decreasing your commute, adding an extra room for the growing family or moving because of a job transfer? Everybody has their own reasons and you need to know what yours is. A clear and concise answer to this question will help you decide on the timeframe within which you want or must move and will give you clarity on how flexible you want to be with the price. Once you are done with thinking about why you are selling, ask yourself the next question: “Do I have to sell?” and have a clear answer to this one as well. This will give you even more clarity on your price and the timeframe.
Next, you need to get a sense of what is happening in the market. Is this a buyer’s or a seller’s market? There is easy formula for this: if there is more than 6 months of “remaining inventory” in your marketplace, it is a buyers market. We can help you answer this question, if you are in doubt. If this is a buyer’s market and you don’t have to sell, save yourself the aggravation and don’t even try it. Either stay at your home or rent it out. If you happen to be in the seller’s market, the only thing you need to do is to control your greed. Buyers will be coming in troves and you can often choose you want to sell to, as there will be a few offer on your property at the same time.
How do you price your home and do you have a specific number in mind that you would like to hit? You may have seen some sales on Zillow or heard the neighbours talk about what they have sold their house for and already have a number you would like to get for the property. I suggest to steer clear of any pricing assumptions until you talk to a trusted real estate agent, who will help you price the property. Pay attentions here, the agent should not price the property for you, but rather price the property with you. You know your house better than anyone else. You can talk about the special features and the upgrades you got from the builder or how much money you have invested in renovating the kitchen. A good agent will not only look at the sales of similar homes with you, but will take into account everything you are telling her about what you did. This, of course, begs the question of how to select the right agent. Once you have gone through the agent interview process that we designed, you can be sure that your home pricing will be accurate and that you can sell within the time frame dictated by your market.
Most sellers are wondering if they should buy first. A few considerations here. If you are in the sellers market, buying first could be an option. There are bidding wars everywhere and it may seem that every home you like disappears in a day. You may end up in a situation where the closing on your house is a week away and you still don’t have a new house to go to. However, to me, the risk of the market shift occurring after you buy, makes this option unattractive. You may not be able to get the price you were originally expecting for your home or you may not be able to sell at all. Consider these possibilities and decide whether you are ok with that. I would not buy first even in the booming seller’s market. Under all other market conditions, selling first is the only sensible option.
At this point you have made the decision to sell, know why you are selling, selected an agent and priced your home. When do you come on the market? Your agent will guide you through the available options, but I would still like to give you a general outline here. If you have to sell, any time of the year is good. Otherwise, don’t put your house on MLS during the months of July, August, December and January. In North America, the market drops a little during those months and it is harder to sell for maximum possible price and it will stay on the market longer. All the other months are good for selling.
Lastly I want to address an important special consideration. Should you be considering selling the house on your own, without hiring an agent? This is known as For Sale By Owner or FSBO. There are two options here: 1. Posting your property on craigslist or promoting it through Facebook marketplace or 2. Hiring a discount brokerage that will put your property on MLS for a small fixed fee and all the marketing and negotiations are on you. On the surface these options look appealing, especially before you look at the statistics around the sales of FSBO properties. There is a trusted source for this information - the National Association of Realtors. When you go there, you will see that FSBOs, on average, are selling their homes for 25% less than the current market value. Of course this is averaged across a wide pool of property types, territories and home prices, but even with that in mind, they give you an insight into the result you will likely get and this option is simply scary. For example: even an average agent will sell your home for 4% to 6% below market value and a top performing agent will bring you 100% of the current market value or in some cases will even be able to exceed it. These stats make the “commission saving” motivation look foolish. Working with a great agent will always be better. Even in a strong sellers market a great agent will get you more money than you could ever get yourself.