Selling a home can put you on an emotional roller coaster. At the top, you feel excited and proud that your place looks the best it ever has and relieved when it finally sells.
At the bottom, though, you might be disappointed at the offers that come in or even desperate when you don’t get any offers at all. What if the buyer’s deal falls through? Now, that’s a potential freak-out moment!
Real estate guru and FrontDoor Insider Tara-Nicholle Nelson offers these 10 simple steps and strategies to get you off the emotional thrill ride of selling your home.
#1: Get -- and stay -- clear on the reasons why you are selling.
For eons, self-help gurus have told us to further our goals by asking ourselves, “What’s your why?” Staying mindful of why you decided to sell your home in the first place can help you steer a straight and stress-free course through the rocky seas of seemingly interminable days on the market, disappointingly low offers and buyer requests for repairs. Focusing on your why is simple -- it just takes a yummy little mixture of conscious intention and few minutes’ effort glazed over with the courage it takes to own your personal vision and values.
Your 'why' can be as unique as you are! Back in the day, people sold homes for a few basic reasons: to cash in on appreciation, to get a bigger or smaller house or to relocate. Now, there are as many reasons to sell as there are sellers! The era of Conspicuous Frugality has replaced the era of Conspicuous Consumption, so downsizing to create a sustainable lifestyle is a valid, even commendable reason to sell. So is closure -- if you’ve been doing the underwater dance with your lender and are just unable to keep up with your mortgage payments, it might be time to wrap it up and move forward with your life by doing a short sale. If you’re in a good equity position, you might even want to move up while the market is still favorable for your purchase. Whatever your reason, so long as it’s yours, it’s a good one!
Write your 'why'. Once you are clear on your reasons for selling, write them down. Take 10 minutes to journal your motivations and the vision for your life that you hope to manifest by selling.
Revisit your 'why' at key decision points. When you are faced with the tough decisions involved in selling in a buyer’s market, like whether to counter an offer or take it, flip open your notebook and revisit your why. It’s natural to get depressed when your home is getting no bites, but returning to your why can make the otherwise somber thought of a price reduction seem like an empowered no-brainer that gets you closer to your true goal for selling.
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#2: Price it right.
As the old saying goes, pride goes before a fall -- and one of those falls is the fall in the your home’s sale price. Some sellers are simply too proud to listen to the market about what their home is worth, and they list it too high. Don’t fall into this trap just because you wish it were worth more. Your list price can actually have an inverse relationship to the actual, eventual sale price. What I mean is, if you list it just a tad lower than its fair market value, you are more likely to get multiple offers. List too high, though, and you can end up with no offers or only the dreaded lowballs.
Embrace your inner Goldilocks. Remember her mantra? Not too high, not too low -- your aim should be to price your home juuuust right. How do you do that? It’s all about the comps, real estate slang for comparables -- the similar homes in your neighborhood that were recently listed on your local Multiple Listing Service (MLS). To price your home right, look at how the comparables were priced, making adjustments upwards or downwards for differences in size and upgrades between the comps and your home.
Comp it out. Looking at the closest comps (those most similar to yours in beds, baths, square feet and location) that have sold within the last few months will help you narrow down the universe of possible prices to a reasonable range. Then, pay special attention to the ones that sold quickly or for more than the asking price. These are the ones whose pricing you might want to emulate. The pending comps give you an idea of what price points attracted qualified buyers from the same exact pool of folks as those who will see your home, in the same market time frame -- usually, the pending properties will have been on the market within the last few weeks. The active comps help you assess the competition; also, actives that have been sitting on the market for a long time tell a cautionary tale. They are often overpriced, which helps you know how high is too high.
Go team! Lest you start to worry that this is a big project to take on all by your lonesome, don’t despair -- this is not a DIY task. Pricing your home right is one of the most important advantages of having a Realtor. Your listing agent has the info, the experience and the good horse sense to help you figure out the price point that will attract buyers, but knowing how to work with comps helps you have a richer pricing discussion with your agent. More importantly, when your Realtor gives you pricing advice, listen to them and don’t give into the temptation to overprice your place. Nothing turns a good buyer off faster than an overpriced listing.
#3: Catch qualified buyers on the Web.
If I told you that 92 percent of dogs like peanut butter, you'd generalize that to make your new Labradoodle your BFF, you might want to slip him some creamy Jif, right? Well, get this -- 92 percent of homebuyers start their house hunt on the Internet! So, if you want to unload your house anytime in this century, your best bet is to make sure that it is fully exposed on the Web.
The importance of being on the MLS (Multiple Listing Service). First things first: today’s homebuyer’s Web obsession makes it critical that your home’s MLS listing has as many clear, attractive photos as possible. More photos is better. While you do run the risk of showing a feature that might turn someone off, the reality is that if it’s a deal-killer for them, you’re not going to trick them into buying the house by not having a picture of the feature with the listing. They’ll just get turned off after they come see it in person! Ensuring that the Web photos of your home are as full and attractive a representation of your home as possible just makes it more likely that the buyers who come will be buyers who are serious about your place.
Now for some logistics. There are literally dozens of real estate listing sites out there. You already know that -- you’re on one of the best ones around right now! Most of these sites’ listing databases are fed by your local MLS. That’s why it is critical that you work with a listing agent who will list your place on MLS; unless you’re an uber-exclusive multi-million dollar price range, you want as many buyers as possible to be aware of your place.
Make your home like Paris and Kim -- inescapable on the Web. Ideally, your Realtor will also have a plan in place to post your home on other popular sites like Craigslist -- it’s free, and it’s another very common starting place for your target market, Web-savvy homebuyers, to check for homes. Oh and did I mention that it’s free?! Funny enough, when I’m scouting for properties for my own buyer clients, sometimes a Craigslist posting will catch my eye, when the MLS listing for the very same property didn’t! In real estate, it pays for your home to be like a reality-show-having celebutante: everywhere.
Know your role: to check and to charm. I know, I know, you’ve got to be thinking that all this stuff is your Realtor's job. And it is; but it’s your job to constantly check to make sure that your Realtor’s postings of your home are easy to find on the Web. Also, one of the most innovative forms of Internet marketing, YouTube home and neighborhood video tours, can be done by your Realtor, but are always more engaging when they are done by you -- the seller. You can narrate all the reasons why you loved the place as you give the property tour, then your Realtor can link to it in the other Web postings.
With your Realtor blasting the Internet with your place via MLS, FrontDoor and Craigslist, and you telling a video love story about your home via YouTube, you’ll lure Web buyers to your home -- just like peanut butter to a puppy!
#4: Be creative, open and flexible about structuring the deal.
Cookie-cutters are for baking, not for real estate deals during this recession. If you’re clear that you want or need to sell your home, you might need to stay open to alternative ways of getting that done. The more flexible you are, the more prospective buyers you open your home up to.
Don’t sell yourself short, sell your home short. Home values have taken a beating over the last couple years. This can leave you feeling trapped because you can’t sell your home for enough to pay off your mortgage debt. If you get offers on your home for less than what you owe, it doesn’t mean you can’t do the deal, you just need to get your lenders to sign off. In fact, if you think your home’s market value is no where near what you owe, you’re better off finding an experienced short sale listing agent up front who can handle the bank if you need them to.
Give buyers the option to buy or not to buy. If you can move on to your next place without the proceeds from this one, offer your home for sale and also as a lease with the option to buy. This gives your buyer a couple of years to work on their downpayment savings, their credit or their commitment issues! In the meantime, they can live in and rent your house. Usually, you get a premium rent and purchase price; in exchange, you put some of the rent money in a savings account every month to go toward the buyer’s down payment if and when they exercise their option to buy.
Do your part to ease the credit crunch. The stats say 1 in 10 homeowners is upside down. But the flip side of that is that 90 percent of potential sellers actually have some home equity. If you’re a member of that 90 percent, consider using your home equity to carry back some or all of the buyer’s mortgage. You can set the arrangement up however you’d like: you can finance as much or as little as you want, for a short or long period of time and at whatever interest rate you and the buyer agree on. Financing some portion of the deal yourself makes it easier for buyers to, well, buy -- with or without the help of their bank.
#5: Make sure your buyer can close the deal.
What’s worse than putting your home on the market and getting no bites from buyers? Getting into contract with a buyer who can’t close the deal! And it happens all the time -- the buyer’s loan falls apart, dashing both your hopes and your moving plans. And, you’re left in the lurch, kicking yourself for all the potential buyers you missed out on during those weeks that your MLS entry was marked Pending -- Do Not Show.
When you get an offer, don’t let your gratitude and relief fuel an immediate acceptance. Before you pull your place off the market on a buyer’s word that they are both willing and able to buy it, go the extra mile to make sure they can do the deal.
Read the pre-approval letter. Of course, at a minimum, you’ll need to see the buyer’s loan approval letter. But you’ll need to take an extra step to be a super-smart seller: read it! Make sure that the letter is a pre-approval, not a pre-qualification. The difference is, a pre-approval should state that the letter’s author has actually reviewed the buyer’s credit report and found it meets lending guidelines. You’ll also want to know that the mortgage rep has verified that the buyer has the assets and income it will take to obtain a mortgage. If the letter doesn’t say so, you might want to have your Realtor give the buyer’s mortgage broker a ring and give the approval the smell test. How certain is the mortgage broker that the buyer will qualify? How certain is your Realtor that the mortgage broker knows what they’re talking about?
Check the deets of the wanna-be buyer’s loan. Other items you’ll find in the approval letter can also clue you in. Is the buyer planning to use an FHA loan? If so, that’s great, so long as your property is in FHA-okay condition. How much is the buyer/borrower planning to put down on the place? Don’t fret just because they are putting less than 20 percent in, but know that under 10 percent is likely to be an FHA deal and, again, you may have to do some repairs unless the place is in good shape. And if you’re in the enviable position of having multiple offers, don’t just compare offers based on their price; a buyer who is putting 20 percent down is more likely to close than someone scraping in at the 3.5 percent minimum, and that’s worth something!
Make sure the buyer has some skin in the game. Is the buyer offering an earnest money deposit? How many days do they need to finalize their loan, and are they willing to beef up their deposit afterwards? If they have no funds to deposit up front, chances are they’ll struggle to close the loan. And if they are willing to increase their deposit to 2 percent or 3 percent of the purchase price after a reasonable (15 days, plus or minus a few) loan contingency period, you can at least project that you’ll be able to breathe easier shortly. In most states, if the deal falls through after the buyer removes their contingencies, the deposit money is yours. So the average buyer will do everything in their power to avoid forfeiting a large chunk of deposit money. If the deposit is substantial, they’ll be really, really sure they can close by the end of their contingency period. And if they don’t, you’ll have their deposit money to soothe your hurt feelings!
Obviously, the problem of your buyer’s qualifications is a high-class problem -- you only have to deal with it if you have a buyer in the first place! Before you take your place off the market in reliance on their word that they can do the deal, make them put their deposit money where their mouth is and do a rigorous review of their loan approval. If either is not up to snuff, negotiate to continue showing your place until the buyer removes their loan contingency. Can you say backup offer?
#6: Pick a Realtor that can manage the market and you.
Picking a listing agent is a bit like picking a high school boyfriend. The one you like the most might not be the one who is good for you. (And once your home is listed, you might find yourself sitting by the phone on Saturday night wishing they would call, but I digress.) You need to employ a couple of critical strategies to find a Realtor to handle your precious property.
What have they sold lately? As a first step, you’ll want to look at their track record. As much as you might like them, the fact that a Realtor is your hairdresser’s play cousin does not qualify them to list your home. While picking a buyer’s broker is all about the interpersonal relationship you can build with your agent, picking a listing agent is all about that agent’s track record of successfully selling properties like yours -- homes in the general price range, area and time frame that your sale will be. In fact, it is not a terrible idea to select a couple of your listing agent candidates from the names you frequently see on "For Sale" signs in your area. But prioritize the ones whose signs end up with a SOLD rider on them, more often than not! Beyond that, you should also get a referral or two from some folks you know who have recently sold their homes and loved their listing agents. Then sit down and talk with a few of the candidates.
One important note -- if your deal will be a short sale, ask your listing agent prospects to break down their recent short sale successes. These deals take experience and skill to get your lenders’ green light.
Just the facts. With Realtors, as your parents felt with your teenage beaux, sweet talkers need not apply. What you want to hear and what you need to hear are two different things. So many Realtors use the strategy of inflating their opinion of your home’s value just to get the listings (with a plan to hammer you for a price reduction after your home languishes on the market for three or four months) that there’s a name for it: buying the listing. In contrast, a strong candidate for the position of your listing agent is a Realtor who has the guts to meet you at the listing interview, sometimes for the first time ever, and give you a reality-based opinion of what your home is worth, even if they know you won’t welcome the news.
So, how can you tell if you’re being sweet-talked into a listing? Before you meet with candidates, do your own real estate reality check and educate yourself about the recent sales of homes comparable to your home. Ask your candidates to justify their opinions as to your home’s value with comps, and ask what their listings’ list-price-to-sale-price ratio is. Agents whose listings sell consistently near the asking price are the agents who price their listings smartly up front.
What’s the marketing plan, man? Inquire as to what marketing strategies they have found work well with today’s buyer and look for a very Web-savvy broker. Over 90 percent of homebuyers start their house hunt on the Web, and you cannot afford to miss them.
Paging Ari Gold. As relentless and irritating as the cocky talent agent from "Entourage" may be, who doesn’t want someone like that to have our back when it really counts? If you manage to negotiate all sorts of discounts and concessions from your Realtor, be a little concerned. If they can’t out-negotiate you, how are they going to be your advocate in negotiations with your eventual buyer? Food for thought.
#7: Jumpstart your stalled listing by evolving your sales strategy.
You primped and spruced your house beyond recognition, analyzed every recent sale within a mile to come up with a price and interviewed four different Realtors before entrusting one with your listing. And after all that work, your house has been on the market 90 days with not one single offer! Every day that goes by just deepens your sense of ominous dread that you might never get an offer and the panicky feeling that you might be trapped. So what now?
Stay engaged. See, putting your home up for sale is not a set-it-and-forget-it type exercise -- you cannot put it on autopilot. Your job is to stay actively engaged and listen to what the market is telling you. When you have had no offers for a long period of time, there’s really no need to ask buyers’ brokers for feedback. They are giving you their feedback loud and clear! The market is telling you that your home is priced too high, and it may take extraordinary measures to re-ignite the interest in your property.
Find your home’s pricing sweet spot. I’ve seen it time and time again -- a property languishes on the market for months, then has a price reduction or two and voila! -- they end up with multiple offers and get more than their asking price. To find your home’s sweet spot, start reducing the price, and I’m not talking about a few hundred dollars. You want your reduction to make a big splash, get some new attention and put every buyer in town on notice that you are serious about selling.
If you can bring your price just below a $25,000, $50,000 or $100,000 price point break, you’ll get your home into the searches of buyers in a totally new price range, folks who haven’t seen your place before. So, instead of going from $250,000 to $235,000, reduce the price to $224,999. Then you’ll expose your house to buyers who enter an upper price range limit of $225,000 in their web property searches -- people who might never have seen your home before.
Put every Realtor in town on the case. Believe it or not, if your home is languishing on the market, your Realtor may be losing just as much sleep as you! If you want to create a veritable sales force of agents, though, light a fire under the local Realtor community by creating some incentives for them to show -- and sell -- your home. You can offer a higher than normal commission to galvanize folks. I’ve seen commissions as high as 5 percent for a low-priced home! Also, offering a few thousand bucks in a bonus to the buyer’s broker that closes the deal definitely makes a tough-to-sell home a more compelling listing for buyer’s reps to show.
#8: Get a real estate market reality check. (And kiss fantasyland goodbye.)
Walk a mile in the shoes of a prospective buyer for your home. They are out there. And they are well-educated. Today’s qualified homebuyers have every piece of data about home prices and sales trends in your neighborhood. They are willing to pay a fair price, but they know how to formulate a fair offer to a degree that previous generations of buyers have never had the ability to do. All the info is just a few keystrokes away! And they have an incredible level of house hunting stamina from having seen so many foreclosed homes with abandoned remodeling projects and ripped out plumbing.
Clueless is as clueless does. So, a buyer is doing their nightly obsessive scouring of the Web listings of homes for sale in their price range in your town, and your listing comes up. What will their first response be? Do they think it’s a serious prospect they should mull over? Do they instantly autodial their Realtor to set a first-thing-in-the-morning appointment to see your place? Or do they grab their sides as they roll on the floor in hysterical laughter, wondering what planet the seller is from to think someone would pay that for that place?
Long story short: Clueless is a very bad look for a home seller. It’s the easiest route to getting lowball offers or no offers at all. In a market like this, you might wish desperately that your home was worth more than it actually is. But check yourself -- wishing it were so doesn’t make it so. If you’re selling now, you probably really want or need to, so get over yourself and get clued into the realities of your market if you want to get it sold.
When on the Web, do as Web buyers do. Before you ever list your home with a Realtor, spend some time on FrontDoor.com perusing MLS listings the way a prospective buyer would. Check out the other listings in your neighborhood, and do an honest mental comparison of their homes to yours. This will start to give you a reality check on prices and price ranges. Then visit a site like Cyberhomes.com and type in your address to get an estimated value. It will show you the actual sales prices from nearby similar homes that have closed escrow, so you can begin to appreciate the difference between list price and sales price in your area.
Experience the competition, live and in person. Once you are familiar with recent sales prices and you’ve hired a Realtor, get up close and personal with your competition. Stroll through a few open houses and see what your house is up against, in terms of condition and staging. Then ask your Realtor to analyze the competing listings on the basis of how many days the active, pending and recently sold MLS listings in your area have been on the market. That way, you’ll know up front which price points get quick buyer interest and about how long you should wait for an offer before you reduce your price.
Now, get real! Remember that the same buyers who come to see your place will have seen the other active listings too. So price or prep your place to be more attractive than the others. You will eliminate the clueless factor and get buyers to take you seriously when you get a real estate reality check, and let the data drive a fact-based pricing and property preparation strategy.
#9: Differentiate your home from the competition.
Between the short sale next door and the foreclosure down the street, it’s very tough to demand top dollar for your home when buyers have so many bargains to choose from.
Let’s get one thing straight -- this is a competition. When a buyer sees your home, they are choosing between your house and the others on the market in their price range. The home they choose is the winner.
So, how can you spank your home’s competition, real estate-style?
Make your house the place to be. Short sales and foreclosures are notorious for skimping on the marketing. So go all out to get neighbors and buyers into your home and talking about it by having an Open House party that highlights the best lifestyle features of your property. If your home has ocean views, throw a twilight cocktail party. If it's a great family home in the best school district in town, have hot dogs, a bounce house and face-painting. Be a little over-the-top, and have your Realtor invite the neighbors and the local buyers’ brokers.
Take your staging to the next level. When I show foreclosures to my clients, I generally keep a vat of hand sanitizer in the car and pass it around between properties; that’s just how filthy they can be. You can set your house totally apart from the bargain-basement priced competition by making sure it is only shown in immaculate condition. Bathrooms, kitchens, walls and floors should be pristine, and if you can swing new chic paint and flooring choices, that’s even better. Stage it with tasteful furnishings and decor that depict the uncluttered, space-maximizing life every buyer wishes they could live, even if it means you have to move out in the meantime!
Use incentives to buy some house hunter love. Any expensive lifestyle amenities that you can leave behind, especially house hunter faves like stainless steel appliances and fireplace-mounted plasma TVs, make good buyer incentives your Realtor can tout in your home’s marketing. I’ve even seen sellers offer to park a new Prius in the garage at closing, you know, so that the new buyer can save on gas to afford their new mortgage! (Do check with your Realtor regarding incentive strategies; some items might not be allowed by the buyer’s bank.)
Make your place easier to buy than a short sale or foreclosure. Every homebuyer on the market today knows that doing a deal with the bank can be, how shall we say, less than fun and less than fast. Okay, it can be slow and painful. So, your home’s marketing should let the world know that buying your place will be a smooth, easy deal. If you are in the position to offer any seller-financing or other creative deal structures, like a lease-purchase option, even better -- you’ve just expanded the pool of folks who can qualify to buy your home!
#10: Know your power. Understand what you can do to get your home sold, fast and at top dollar.
So much of the drama of selling a home is the sense of helplessness. It can feel like you're at the whim of the market, prospective buyers and even your local force of Realtors!
Not so -- in fact, you have a huge amount of power to control the outcome of your home selling experience. You actually make the decisions that have the most impact on whether your home sells, how fast it sells and what price you get for it.
It’s all about the Benjamins. You and only you get to set the price, and the price is the single most important determinant of how fast and for how much your home sells. Now, look -- you know good and darn well from your own shopping experience -- both real estate and retail -- that a bargain-priced product catches your eye much more quickly than a regular priced product. Everyone wants a deal, so if you want your home to sell quickly, either price it lower than the similar houses on the market or make sure it is tricked out in features that buyers care about to warrant a premium price. The more buyers you lure into your house, statistically-speaking, the higher the price you’ll get for it. If you price your home low, you’ll get more buyers in it and maybe even get multiple offers. Yep, it happens -- even in this market, but it usually happens to great homes listed at low prices.
Conditional love. You get to choose what you are putting on the market: a contractor’s special, a cosmetic fixer or a Pottery Barn-chic casa in move-in condition. If your home is in really bad shape, it’s probably not cost- or time-effective to fix it for sale. But if it has one major issue that you can afford to fix, like replacing the roof or trading out the rotten windows with dual-paned, it might just be worth the effort. Talk to your Realtor first about how the repair might get you more money or help you get the place sold at all!
If your home has lots of little handyman projects that need to be fixed -- a hinky bathroom exhaust fan that sounds like a lawnmower; scuff-marked walls; or grungy, old-school cabinet hardware -- get them done! Homes that are almost “there” are the easiest ones to get some big upside out of a good sprucing up. But do interface with your Realtor on this, and coordinate your spruce up with her staging strategy.
To market, to market. You control how your home is marketed, because you pick your listing agent! Be smart and pick one with a strong marketing plan that has demonstrated success attracting buyers in your area. And don’t ever mentally check out of the marketing process. Until your home is sold, go online periodically and have a look-see at how your home is being presented to web-surfing house hunters. If you don’t like what you see, take it up with your Realtor. They aim to please and will usually work with you to tweak your home’s marketing pieces till they reflect your home in as good a light as possible without using pics of someone else’s house!
See, you have a lot more power over the sale of your home than you thought. Wield it wisely!