When it's time to sell your home, most sellers are looking to get more money, but may not know how to go about it. When real estate prices are high, and inventory is low, it can be tempting to list as-is and grab a quick profit. However, taking the time to study your local market and evaluate your property can end up putting more money in your pocket.
The biggest mistake that many people make is not knowing which updates and changes will result in the best return on their real estate investment. If you've ever watched any home improvement shows, you've likely seen the perils of over customization or over-improving.
Not every improvement works in every market. You don't want to end up with the most expensive home in the neighborhood because it will likely take more time to sell. Conversely, the house on the lower end of homes available for sale may sell fast but probably isn't receiving its full value.
Steps for Selling Your Home For The Most Money
First things first, examine your local market. At this point, you can bring in a real estate agent to do a comparative market analysis (CMA) for you. A CMA will be a presentation on properties that recently sold or are on the market in your area and will show you where your property fits in and the possible price it could fetch.
If you aren't ready to meet with an agent, you can do some of this research independently. There are a variety of sites that will give you an estimate of your home's value. However, you may want to take some of these evaluations with a grain of salt as they are generally based solely on the rudimentary data of your house's size and location. You can also request an offer from Zillow Offers, Opendoor, or any of the iBuyers in your area. An iBuyer, or instant buyer, will provide a cash offer for your home. This price will be below the home's market value, but it gives you a place to start.
What about Zillow or Redfin?
Sites like Zillow or Redfin give information on homes that recently sold. Pay attention to the list price and the sold price to see if there's any difference and observe how long it took between when the home was listed and when it sold. The number of days on the market can be an indicator of how active the market is.
When you do this research, look at the photos of the homes as well. You want to find the closest equivalents to your property as possible. You'll be looking for similar bedroom counts and square footage and lot size, but you also will want to see the comparable homes' age and how renovated they are. In some markets where prices are high, you may discover that most of the homes have got modernized and updated regardless of their age. What you are looking for here is the home's overall look and feel and how trendy the updates are, and what types of finishes are used.
Getting realistic with your homes’ potential selling price
This research type can give you a realistic assessment of what you can expect to get for your home. A substantive remodel is only worthwhile if it will result in a marked increase in your final sale price. Remodeling Magazine puts out a Cost vs. Value report each year that looks at renovations and their investment return. Indeed, a remodel can help sell your home for more money, you have to watch the potential return. Also, the report is a great resource and can give you a broad look at which projects you should consider. However, what it can't tell you is what will work in your neighborhood. If you can, attend local open houses and showings. That way, you can see first hand what your potential competition looks like.
What is Google saying about your house?
While you are doing your neighborhood research, you should also review what is already online about your house. You might be surprised to find that Zillow and other websites have already assigned a value to your house. The Zillow Zestimate may not be accurate, and your best shot at changing it is before your home gets listed for sale. According to Zillow, the first step is to claim your house on the site, which will give you the right to update your property information if it is inaccurate.
Another benefit of claiming your house on Zillow and other sites is that you can also ask to remove the photos associated with any previous listings of your home. Usually, once a home gets listed for sale through a multiple listing service, the new images replace the old ones, but it doesn't always happen. Removing old photos gives your property a blank slate online.
To inspect or not to inspect?
It's likely that when you sell a home, the buyer will request a home inspection. One way to get prepared is to order an inspection before you begin any repairs or renovations. There are a couple of reasons for this. The first is that you may find something like a pest control issue, worse, like a foundation issue which could eat into your overall renovation budget. The second is that you can address something foundational before you do surface fixes. An inspection does cost money, but it can pay off later.
Disclose, disclose, disclose
The only negative about doing an inspection is that it means you now know anything that might be wrong with the property. As a result, you may need to disclose that when you sell your home. Disclosure laws vary by state.
Suppose you can walk through the property with the inspector. They will tell you what a must-fix is and can also give you guidance on the potential costs. If there are repairs you don't want to make, you can build this into your price. In general, fixing what is wrong will yield you a higher price, but it may not equal out the cost of repairs. For example, if you have an older roof, you may opt to repair it versus replacing it even though it will probably need to get replaced at some point within the next several years.
Potential buyers tend to not notice the small cosmetic fixes. However, substantive updates tend to be more appreciated by potential owners. In considering which repairs to make, you'll want to balance both of those drives when selling your home for the most money.
Building your to-do list
If you've followed this process, you should now know two key facts. First is the lower and upper limits of what you probably can receive for your property based on your research of comparable properties. Second is your property needs on a core level to make it pass a future inspection from your buyer. The third factor is determining your potential budget and building out a list of what you want to do that may add value.
Some of these decisions will rest upon how much equity you have in the home, what you paid initially, and how much time and money you are willing to spend on fixes. Now, it's time to create your list of to-dos.
Must-do's and To-do's
You can break these down into the must-dos and the nice-to-haves and further segment into what you can handle yourself and what you need to bring in a professional. In general. it makes sense to start with the most substantive projects where you may need outside help to work from the most core systems (electrical, plumbing, etc.) out toward the lighter fixes like paint, fixtures, and finishes.
If you are choosing a contractor, get several estimates, and be sure to talk to past clients. If you're looking for an architect, be sure to see some of their past work to ensure their style meets your taste. The cheapest estimate isn't always the best one, and a little due diligence can now add to your bottom line. The more you can show potential buyers how you cared for the home, the more confident they will feel in their offers. As a result, you'll get more money when you sell your home.
On-trend but not trendy
The truth is a person could go mad trying to chase design trends, and they don't always add to your bottom line. Today's farmhouse sink could be tomorrow's Formica countertop. Your buyers may well want to personalize the home in their own way, so what you want to do is update in a way that isn't too idiosyncratic.
When it comes to paint colors, while bold colors may look great in home decor magazines, they could scare some buyers away. Instead, think warm neutrals like taupe and greige (that popular mix of gray and beige). All white can appear too sterile, but neutral walls with white trim can feel pulled together and subtle.
Staging, warm but not personal
One of the easiest ways to improve how a house shows is to declutter it as much as possible. Decluttering is a challenge if you or your tenants live in the property, but most of us live with far more stuff than we are aware of, and all that stuff can make space appear smaller. It can also make a home feel too personalized. Renting storage space for a couple of months can help incentivize you to strip down without having to get rid of things completely.
After you do a thorough decluttering, a deep cleaning is in order. Spending just a couple hundred dollars on a professional cleaning can make a home feel fresher, and sell for more money!
The Real Estate Staging Association (RESA) found that staged homes spend less time on the market than their unstaged counterparts. You can hire a stager, but it isn't always necessary unless the property is vacant. Buyers aren't looking at the furnishings, but they are looking at how the furnishings fill the spaces and how roomy the home appears.
Another benefit of staging is that it can suggest uses. Depending on the market, you may want to stage a bedroom or den as a home office.
The basics of curb appeal
Curb appeal is the finishing touch, but it's also the first thing your buyers will see.
While you should go neutral on interior colors, the front door is one place where a bold pop of color is often welcome. A bright yellow, red, or blue door can contrast with the home's exterior and trim and creates a more dramatic entrance.
If you want to sell your home for more money, the most important thing is that the home looks well taken care of. Windows should get cleaned, and any peeling paint or cracked siding needs to get repaired. Make sure the gutters are clean, and the lawn is mowed and not patchy.
Depending on the time of year, potted plants or flowers can get positioned on the porch, steps, or walkway leading to the house.
Is professional photography necessary?
These days a cell phone can shoot pretty great pictures of your home. But, if you spend a little more money, hiring a pro may still be worth it, especially if you just renovated. Photographers are experts at using light and at choosing angles that will best showcase the home, helping it sell for more money. They also may have access to drones and other equipment to help make your property look its best.
According to the 2019 National Association of REALTORS® Profile of Home Buyers and Sellers, 52% of buyers found their home on the internet. That number probably doesn't consider the buyers who asked an agent about a particular house and then went to see it. Potential buyers will spend hours searching apps looking at real estate, making photography and video more valuable than ever.
Can going at it alone save you money?
The latest data from the National Association of Realtors indicates that 89% of sellers use an agent to list. Most sellers pay between 5 to 6% in commission on the sale of a home, and so you should factor that expense in along with other closing costs. Together with the commission, as well as title insurance, transfer taxes, property taxes, potential legal fees, escrow expenses, and other fees, can eat up 10% or more of your total return on your home.
This might make it tempting to skip working with an agent, but working with an agent is a lot to be gained, especially if this is your first transaction. Indeed, agents have the tools to sell your home for the most money. You can list a home on Zillow on your own, but an agent will list your property on the multiple listing service, as well as sharing it with other agents. Your agent also talks to buyers and sellers every day and knows what is happening in the market and how to best attract buyers.
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Skilled negotiators sell homes for the most money
However, these days, an agent's true value may not be just in marketing but in negotiating the transaction. If there are multiple offers, an agent can help you evaluate which one may be right for you and can guide you through the sales process. Keep in mind that all commission is negotiable but that if you want to negotiate your agent's commission, you need to do so before a listing contract is signed.
Just as with contractors, with agents, you want to interview more than one. The one who gives you the highest estimate of your home's potential price may not always be the one who has the experience to sell it. You want an agent with a proven track record of success in your area. The most important thing is that you trust your agent to do the best job for you and truly understand the fiduciary duties they owe to their clients.
The real best offer for your home
Although this article centers on selling a home for the most money, that may not always mean the highest offer is the one that will get you there. Consider how the potential buyer plans to finance the home, their stated timeline, as well as any contingencies they want to put in place. In a seller's market where there are not many homes on the market, you may be able to negotiate closing costs and other fees. An agent can help guide you on what may be possible.
Remember, the home's best offer is the one that closes on time and puts the most money in the seller's pocket.
This article originally appeared on The Financially Independent Millennial and was republished with permission.