There is plenty of advice on the net and elsewhere for first-time buyers. Mortgage lenders are happy to impart their knowledge to help facilitate a loan, and realtors will do their best to clinch a sale. But, what about first-time sellers?
There were 5.64 million house sales in 2020. Over that year and the next, both sales and house prices rose. It has been a seller’s market from then, right through until this point now.
Many of those house sales would have been by people new to the experience, and many would have struggled to understand the options available to them. If you are planning to sell a property now, then you may want to read on for a basic breakdown of what you can expect.
What routes are available for selling a home?
The first step to selling a house is to choose your method. Invariably, most people will choose a realtor to market their home. This is a standard route, and the same one they were likely to have chosen when they bought their home.
Yet, there are more options available. Depending on your needs you may wish to look at property auctions or try to market the home yourself. If you need a quick sale where reaching the market value isn’t essential then you could choose a cash buyer.
The biggest realtor in the country is possibly Realogy with a sales volume of $500 billion-plus in 2019. However, for a fast sale, you may need to look at sellyourhousefast.com or some similar cash-for-homes buyer’s website.
What is the time frame for selling a property?
The biggest questions that sellers have are normally, how much is my property worth, and how long will it take to sell?
There are no set rules here but the average time to sell a home through a realtor is around 25 days for marketing and to receive and accept an offer. Plus an extra 30-45 days to close the sale.
Other sales methods can be quicker such as auctions or cash buyers. Again you need to ask whether a quick sale is more desirable than getting the maximum return on your home.
How much is your property worth?
With that last thought in mind, how much will you receive through a house sale?
House prices rose faster than ever in 2021, and sales also increased – this demand pushed up the price of the properties on sale but things are slowing down in 2022.
There are some methods freely available to you to value your home before you market it. A realtor can give an estimate based on a comparative analysis in your area. For a more detailed approach, you can hire a professional appraiser, or you could use online valuation tools. The Federal Housing Financing Agency has an online house price index calculator too.
When do you need to carry out home improvements?
A realtor may recommend that you improve on certain areas perhaps to lift the curb appeal of the property. But take into consideration that you may lose money on renovations.
Typically, you could expect to see an 80% ROI on areas such as landscaping, decking, and kitchen installations. Other installations may see you get a poor ROI and fail to break anywhere near even.
For instance, solar panels can help to reduce the cost of electricity bills, but this type of home improvement is better done when you are planning to stay longer, not when you are selling.
It is also worth remembering if you are selling to a cash-for-homes buyer that home improvements are not necessary. But, if you’re selling through a realtor they may speed up a sale, as will certain repairs.
What repairs need to be attended to?
Repairs are not the same as renovations. The latter can improve the appearance and allure of your home, and help to attract a buyer. The former though is far more necessary when selling a home.
If you carry out a seller’s inspection you may find certain areas that need attention. You may need to schedule drain cleaning if problems are found there, or you may have mold in the basement, or a leaky pipe or two.
All visible problems should be fixed as these are red flags to a potential buyer. Anything that a seller’s inspection picks up should be seen too as you can be sure the buyer’s inspection will also note these problems.
What are the fees and costs involved when selling a home?
Selling a home is far more expensive than buying one, and for a first-time seller, it can be something of a shock.
If you sell through an auction you can expect to pay 2.5% of the value of the home, and perhaps incur some other fees for marketing and such. Realtors typically charge 6% of the sale price, while cash-for-homes buyers waive most if not all fees.
The difference is the sale price at an auction isn’t clear until the house goes under the hammer. A realtor charges more in commission but will get a better sale price typically. And, cash-for-homes buyers may be free but the offer for the home will not reach the market value.
Other costs to consider include closing fees, relocation fees, and taxes.
Selling a home can be a trying period but understanding the steps and costs involved can help to avoid unpleasant surprises. For instance, choosing the best selling method for you can mean getting the maximum return, or alternatively, a faster sale.
The costs involved can also be confusing for someone who has never sold a home before. As a ballpark estimate, you could expect that you will lose 10% of the sale price to cover all commissions and costs.
Fixing repairs and making some simple renovations can help to speed up the sale, but ask a realtor’s advice on what is necessary and what isn’t before you invest too much time and money.
Hopefully, sales will continue to be healthy and soon you will be looking forward to moving to your new home and saying goodbye to the old one.