According to CNBC, nearly 40% of Americans cry during the process of selling their home. That sounds like a mental health crisis and a possible divorce waiting to happen. To help you avoid that, here are my top five tips for selling a home in 2021.
Top Home Selling Tips
1. Find your agent.
Should you use an iBuyer or should you use an agent? I pay more attention to OpenDoor stock than I do to my husband, and that’s because I believe one day iBuyers will take over the field of real estate and make me irrelevant. But that day isn’t here yet.
Do your research: iBuyers are still not a good deal for the seller. They take heftier commissions than the local market (they just call them something else, like experience charge or credit) and they are incentivized to pay you a lot less than market rates. For now, a traditional real estate agent still makes more sense.
2. Prep for the sale.
The seller should pay for their own inspection and address any major issues. This is an important step, as 95% of contracts that fall apart do so because of conflict during the inspection. By addressing major issues ahead of time, like the roof, sewer, or HVAC, you can limit the undue stress and lost time that frequently accompanies a sale.
Professional photos are inexpensive and very important. In Colorado, you can get approximately 10 for about $100. It’s a numbers game and you will get the most volume with the best photos. Do not skimp on this.
3. Make sure your comps are correct.
There are a few criteria I consider when pulling comps.
- Proximity. Within a mile is preferred since the one thing you can’t throw money at post-close is location.
- Square footage. Larger homes have a cheaper price per square foot than smaller properties, so it’s important to pull from houses with a similar footprint.
- Bathrooms. I care about bathrooms a lot more than I care about bedrooms. It’s much more difficult and expensive to add a bathroom, which requires plumbing and expertise, to a house than it is to add a room, which just needs drywall. Also, the difference between one bathroom and two is huge, so that counts for more.
- Parking/garage. Many of my clients are in Denver, where parking is limited. But even in Colorado Springs, where parking is more abundant, people understandably still want garages because of hail and snow. A garage is not always cheap or easy to add.
- Zoning. This is becoming increasingly important with the popularity of Airbnb, house hacking, and co-living arrangements. Depending on who your buyer is, certain zoning categories are worth more than others.
- School district. Go figure. People care about their kids’ education.
- Year built. Houses in the same development were likely built around the same time, but if you live in a market with a tight inventory (like Denver or Colorado Springs), you may be pulling from a wider radius just to get a handful of properties. If you do that, you might go outside the development, so make sure the other houses being pulled were built within 20 years of the house you are selling.
4. Set the right price.
“Bidding wars” are a hot topic locally because the inventory is so low that sellers often get multiple offers on their listing. I understand the inclination from buyers to reject this, but here’s the thing to remember: the price is not the price. It’s a somewhat arbitrary number the listing agent recommended (or the seller demanded). Ultimately the market decides.
If the property is overpriced, it sits, acquires a stigma, and the seller is likely unhappy with the listing agent. If it is underpriced, it moves quickly, and the seller is likely to be very happy with their agent. Market demand still dictates the price, but based on expectations, the client walks away with a very positive or negative experience.
Related: How to Sell an ‘Unsellable’ Home
5. Qualify your buyer.
There are actually two steps to this.
The first step is the standard lender letter and phone call. The lender letter should disclose what they qualify for and under what terms. The phone call should give the seller peace of mind that the lender is local and available to talk if issues come up.
The second part of qualifying your buyer is proof of funds. Get a screenshot of a bank balance that shows they have the necessary money for the down payment, and if appraisal gap coverage is part of the contract, that they have the funds for that as well.
Buying or selling a house is a big deal. It’s likely one of—if not the—largest financial decisions you’ll make. It’s fair for it to be stressful, but you can limit a lot of this stress by knowing what to expect.
What do you do to make sure your properties are sale-ready?
Share your presale process in the comments.