Purchasing your first home is always an education process – you learn about the local market, mortgages, housing codes and zoning and negotiation. Depending on how quickly you have to move to be able to snap up a home, the purchasing process can be a bit of a whirlwind.
Then, a few years down the road, you’re ready to move to a new home that’s bigger, closer to work or has all the extra features you’ve been dreaming of. And while buying again is a whole re-education process with new market trends and regulations, this time you'll also need to learn the ins and outs of being a first-time seller.
Again, it’s an education process, which is why you’ll want to enlist the help of a real estate agent you feel comfortable taking advice and instruction from to get your home ready.
“We help showcase their home in the best light to get the best price, and in today’s market, to help them get premium pricing,” says Lennox Scott, chairman and CEO of John L. Scott Real Estate in Bellevue, Washington.
While the housing market may appear to be ideal for sellers, with bidding wars common and many markets reporting all-time low inventories of properties on the market, sellers should keep perspective when it comes to sale prices. Just because your home’s value has increased doesn’t mean your home will go for millions when it was worth $250,000 a couple years ago.
According to the National Association of Realtors’ Summary of July 2017 Existing Home Sales Statistics, 76 percent of existing home sales were sold for $500,000 or below. Homes that sold for between $500,000 and $1 million accounted for 12 percent of sales nationwide, and just 3 percent of homes sold for above $1 million.
To better prepare yourself for putting your property on the market, follow these six do’s and don’ts for first-time home sellers:
Do establish an offer due date. The key to selling your property for the price you want is positioning it so the right buyers get a chance to see it and mull it over.
For that reason, a strategy that’s proven effective for Shane Marrion, broker and owner of Benoit Real Estate in Somerville, Massachusetts, is to price a home slightly below expected value and place the property on the market, but don’t accept bids right away.
“Hold off offers for approximately seven days, group show it and do a couple open houses, and that’s the best way to maximize your money,” Marrion says.
By waiting, a successful purchase isn’t dependent on who’s able to make an offer first, but who’s serious about purchasing the property and able to put together the most appealing bid, whether that includes a flexible timeline or even an all-cash offer in addition to the right price.
“It helps drive your price up and keeps everyone honest,” Marrion says.
Someone wants to buy your house. Here’s how to tell if the deal is good.
Don’t price too high from the start. Even in a hot seller’s market, an asking price that’s too high can keep buyers from even looking at your property. Overpricing your home from the get-go will cause the property to lose momentum, which can be the biggest killer for real estate sales success.
“You don’t want the market to hesitate,” Scott says.
Of course, real estate agents are aware that it can be nerve-wracking for sellers to concede to a lower asking price than they want to see in the end. This is where hiring a real estate agent you trust is key, Marrion says.
“It’s not natural for [sellers] to accept listing their property for a little bit less, but that whole less-is-more strategy works in today’s market,” Marrion says.
Do what’s best in the current market. Your real estate agent will likely have a strategic plan for the sale of your home based on what works best in the market for achieving top dollar. Depending of the right price range for your home, that could mean anything from hosting multiple open houses to presenting it as a pocket listing.
Currently in the Boston market, Marrion’s strategy of setting a date for offer submissions in advance is proving successful. However, he doesn’t expect it to last. “When the market changes, we’re not going to be doing that. Right now, less is more,” Marrion says.
As the market changes, caused by additional inventory or a drop in the number of active buyers, for example, agents and brokerage firms will adjust their strategy to fit demand and buyer preference.
Don’t assume you can only sell in spring. If you’re on a tight moving schedule or you have an eye on buying a home currently on the market, you don’t have to hold off until the traditional selling season in spring and summer.
Especially if you’re in a market where buyers are still outnumbering homes on the market, a sale for the price you want is still feasible.
“The buyer-to-new-listing ratio is actually better over wintertime than it is during the spring and summer,” Scott says.
Because markets are strapped for listings particularly in fall and winter, active buyers will be eager to see the newest property for sale. “All the energy is about the new listing coming on the market,” Scott says.
Help potential buyers picture themselves in your home before they even make an offer.
Do listen to your agent for home prep. Curb appeal, clutter and room updates are all things most sellers are going to hear about from their real estate agent – and they shouldn’t be taken lightly. Regardless of how fast homes are receiving offers, your home needs to look stellar to get the price you want.
Not everyone has the money to put in hardwood floors or replace countertops, and that’s OK. The most valuable changes to make are ensuring you have a well-manicured front yard and pleasant entry and clean rooms that allow buyers to focus on the home itself, not your stuff.
“The buyers feel like a million bucks walking up to your house, I don’t care what your price range is,” Scott says.
Don’t lead with contingencies. Tight seller’s markets throughout the U.S. mean it may be hard for you to find a new house to buy without getting stuck in a bidding war of your own, so you may need some extra time if your house sells fast.
But Marrion stresses you should not make the sale contingent on the purchase of a new home for you. “It actually devalues the property, and this is the best way to avoid that,” he says.
Instead, Marrion says he’ll instead include a 60-day use and occupancy clause – noted in the original listing on the MLS so it’s not a surprise in negotiations. The limited leaseback option gives you the option of an extra 60 days to find a house, and the period also helps avoid any potential problems with the buyer’s mortgage approval.
A buffer of 60 days should be enough to let you find your own next home, or at least establish a plan for other temporary housing while you continue your search.
8 Home-Selling Buzzwords That Annoy Consumers
Draw buyers to your home, not away from your online listing.
Eighty-eight percent of homebuyers use the internet as part of their home search, according to a 2015 National Association of Realtors report. That’s clearly a portion of buyers you can’t afford to miss when selling your home. But what makes an enticing home description? Specifics and honesty are key, but with so many home listings out there, it’s also important to avoid phrases and terms that have become cliche or have taken on a new meaning. Read on for real estate buzzwords to leave out of your listing.'Quaint' or 'cozy'
'Quaint' or 'cozy'
Any description of a house pushing the “quaint” and “cozy” factor is likely trying to mask the fact that the house is uncomfortably small. And while the size of a home matters to most buyers, let them determine if it's the right size based on the square footage listed. “Consumers look through a lot of listings. They don’t have the patience to decode all the cliches and euphemisms,” says Steve Udelson, president of Owners.com, a website for self-directed homebuyers and sellers.'Luxury'
High-end homes attract a whole new set of potential buyers, but “luxury” has been so overused it’s hard to tell the difference anymore. “You’ll find various listings that are by no means ‘luxury’ or ‘luxurious,’” says Michelle Farber Ross, a broker and managing partner at MMD Realty, based in Fort Lauderdale, Florida. “Agents use those buzzwords, and you look and think, ‘Oh gosh, this would never be a luxury home.’” She notes the true luxury market begins at $1 million (and starts even higher in pricey cities such as New York and San Francisco).'Up-and-coming'
The description of being in an “up-and-coming” neighborhood has taken on a whole new meaning – and often not a positive one. This phrase is a veiled attempt at pointing out a high-crime neighborhood, which gets into dangerous territory, as the Fair Housing Act prohibits providing subjective information that may steer homebuyers toward or away from a neighborhood based primarily on race or any other form of discrimination. “You can’t red-flag a neighborhood,” says Tim Brinkman, owner and broker of The American Real Estate Co. in Keyser, West Virginia. He tells his agents that they should only share information about the neighborhood that's location-based, such as the home's proximity to a grocery store or park.'Priced to sell'
'Priced to sell'
This all-too-common phrase has zero impact on a home description. Plus, Udelson explains, “priced to sell” raises awkward questions for online house hunters: “What does that mean? That means all other listings are not priced to sell?” A home description should remain focused on the home's qualities and let the listed price speak for itself. This phrase and others – including “motivated seller” – diminish the property's selling points and may leave you with lowball offers from buyers looking to score a deal.'Updated'
Every homebuyer may want an updated kitchen and master bath these days, but the word is so vague that it can lead to major letdowns when it comes time to tour the house. “Take that down a notch and be more specific,” Udelson says. New quartz countertops and recently installed stainless steel appliances should be described as such to differentiate from a kitchen that only got a fresh coat of paint.'Needs TLC' or 'Handyman Special'
'Needs TLC' or 'Handyman Special'
Overly vague terms get obnoxious when it comes to fixer-upper properties. Phrases like “needs TLC” and “great potential” fail to note how much work the home needs, often leading buyers to assume the worst so they don't even bother to see the home in person. Brinkman’s least favorite home description is “handyman special.” “Just how handy do they have to be?” he asks, noting this could be minor maintenance or a complete remodel.'Walking distance'
Close proximity to stores, restaurants and public transportation can be a huge selling point for many homes, but clarity is essential because “walking distance” varies significantly by person. While anything less than a mile might be considered walkable by one buyer, any more than a block may be too much for another. “That’s not bad, but you can be more direct,” Udelson says. Note the physical distance to the nearby shopping center or explain that there are no major roads to cross, which makes walking much easier for those who are inclined to pay a higher price for convenience.'This home has it all.'
'This home has it all.'
Lacking an actual description of the property, this phrase does little to draw homebuyers to a home showing. Udelson notes this and other expressions like “the possibilities are endless,” for example, are “vague, overused abstractions” that do little to sell to a new owner. You don’t want to leave room for a potential buyer to doubt a description. Instead, ensure the home's features speak for themselves. A home with a pool, master suite and chef’s kitchen might be everything a buyer wants, but if it’s simply described as having “it all,” the buyer may never check it out.Remember: No need to repeat the basics.
Remember: No need to repeat the basics.
When a property goes into a multiple listing service, the information that breaks down key details of the home, such as the number of bedrooms, bathrooms and age of the house, is presented in list form. Farber Ross warns against repeating those details again in the description you write: “They can see all those statistics on their own – you don’t need to reiterate any of that.” Instead, use the description as an opportunity to describe the type of hardwood floors and countertops that may pique a buyer’s interest.Read More
She has appeared in media interviews across the U.S. including National Public Radio, WTOP (Washington, D.C.) and KOH (Reno, Nevada) and various print publications, as well as having served on panels discussing real estate development, city planning policy and homebuilding.
Previously, she served as a researcher of commercial real estate transactions and information, and is currently a member of the National Association of Real Estate Editors. Thorsby studied Political Science at the University of Michigan, where she also served as a news reporter and editor for the student newspaper The Michigan Daily. Follow her on Twitter or write to her at firstname.lastname@example.org.
Devon Thorsby | June 5, 2019
Homeowners should not fret, as long as they're prepared for the possibility of a downturn.