Home for Sale
- Last Updated: Tuesday, 23 February 2021
There’s no doubt that everyone’s seen one of these signs in front of a house or pointing down a street. Selling a home is a big step, and it involves a lot of money. In this article, we’ve a couple of tips that might come in handy for anyone thinking about putting a “For Sale” sign on their front lawn.
Selling a Home
Before talking to a real estate agent, it’s a good idea to find out how much the home might be worth. Figuring this out is fairly easy; look around for homes that are already for sale. Visiting these homes is even better; think like a buyer. Look in a local newspaper or search online for comparable homes, because it’s important to know what the competition is offering.
Ideally, find similar style homes (colonials, split levels) with the same numbers of bedrooms and bathrooms. The closer this comparable home is to the one being sold, the better the estimate of its value.
When visiting these homes, choose ones that have the same curb appeal, are equally maintained, and are in nearly the same condition as the home being sold. Once a couple of homes have been evaluated in this manner, it should be easy to develop a good estimate.
For Sale by Owner
The least expensive way to sell a home is the “for sale by owner” route; just remember that there is no such thing as a free ride. This approach requires finding an attorney to handle the transaction. Real estate contracts are also needed as well as disclosure forms. There are a number of companies that sell kits for this market. It’s also possible to find legal software on the Internet that has all of the required forms.
Another disadvantage of this approach has to do with marketing. Instead of having a real estate agent “push” the home, the “for sale by owner” approach requires sellers to pull in buyers. That can mean placing advertisements in local papers or online.
Finally, owners will also need to assume the role of salesperson. Not everyone is up to this challenge; it takes time, and buyers may prefer to work with a professional.
Real Estate Brokers
Using a real estate broker is a more traditional approach to selling a home. Brokers are paid professionals that understand the local market and can help owners to quickly figure out the best approach to selling their home. Once again, owners should know the value of their home before talking to a broker. Remember, they earn commission on sales, so the more homes they can sell, the more money they make. It is much easier for a broker to sell a home that is valued less than the market will really pay.
As the homeowner, the objective is to make sure the price paid for the home is a fair one. Most real estate agents charge a 6.0% commission for selling a home. They do a lot of work, but if the home is worth $300,000, owners will be paying $18,000 in commissions. Don’t be afraid of making them earn this money, they should be responsive to calls and questions.
Most agents will agree to accept lower commissions if homes in the area are moving quickly and home prices have risen dramatically in the last several years. In some areas of the country, home values can double in as few as six years. This means the sales commissions owed to real estate agents have also doubled in those areas.
This particular phenomenon can cause a dramatic increase in “for sale by owner” listings. In fact, smaller companies charging only 3% commissions are starting to appear across the country. Owners need to do some research and evaluate local options, negotiate with the agent, and see if it’s possible to get them to lower their commission.
Best Time to Sell a Home
There are a lot of factors that determine a home’s value, including the school system and the economic conditions in the surrounding areas. There is also a seasonal influence to home prices, especially if it’s located in a community where the school system is highly valued.
Most people are unwilling to pull their children out of school mid-term and move them to a new community. The laws of supply and demand mean there will be much more activity for buyers in the months just prior to school’s close in the June timeframe. This way, moving can occur over the summer months and families are settled in before September.
According to Census Bureau statistics, from March through August, there are more homes sold than any other time of year. Selling a home during times of peak demand should yield more money.
Negotiating with Buyers
The ultimate objective when selling a home is to create a win-win situation. Neither the buyer nor the seller should be looking to take advantage of the other party. Buyers should pay what the home is worth, not a dollar less or a dollar more. If negotiations are stalling, then keep the lines of communication open. Try to determine why there might be a fundamental difference in opinion.
Has the buyer been visiting other similar homes? Is there something about the home’s condition that makes them think it requires a major repair? Focus on the issues that can be resolved, and keep the negotiations moving along. Finally, if negotiations come to a halt, figure out if there is some way to find a middle ground.
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