The peak home buying season is now underway, and for every person looking for that perfect home, there’s someone trying to sell it to them. Fortunately, whether selling to move up to a larger home for a growing family, or downsizing for retirement, many people are in good position to cash in. Home sales rose 11.8 percent in February, aided by record low unemployment rates, accelerating wages and falling mortgage rates.
According to the National Association of Realtors, February sales revealed growth in homes priced between $250,000 and $500,000, a range that is generally affordable to middle-class families, but sellers looking to attract first-time home buyers are also in good shape. According to a new survey data released in March by Realtor.com®, nearly half of shoppers this spring are looking for homes at or under $200,000. This price point in housing has actually experienced the largest inventory decline year-over-year.
But beware – buyers are fickle. They want freshly painted walls and a home looking like it’s new. So, how does a seller stand out among prospective buyers and also make money on the sale? Before hiring a Realtor® and taking the plunge, here are a few recommendations:
Understand the Financial Impact of Selling Your Home. Many people who bought a home several years ago and have watched real estate prices rise believe a financial windfall is coming their way. But because of the costs involved in selling a home, that’s not always the case. A seller must be prepared to pay for required repairs, seller-paid closing costs, the real estate commission, and moving costs to your next home. Start by making a list with an estimated cost for all of these items. If the amount drastically reduces your estimated profit, you may want to reconsider selling right now.
Gather Information on Key Items. A savvy buyer will want to know the age of a house’s roof, HVAC system, water heater, appliances and other major items. Sellers need to make certain these items are in good working order and have been replaced or repaired in recent years. For example, if a roof is 20 years old or older, you may need to replace it before putting your home on the market. And, it’s important to have copies of your maintenance records or receipts.
Do A Deep Cleaning. To present your house in the best possible light, spend some time making it look clean and fresh. Scrub all the fingerprints off the door jambs, wipe down the baseboards, clean the carpets, make certain the bathrooms are spotless and touch up any spots on the walls. Hire a cleaning service if necessary, but don’t let a dirty house cost you money on the sale price.
Examine the Home as if You Are the Buyer. Do your own home inspection. Go into each room and look closely for any damage that could reduce your home’s value. Common problems include rotting wood around door frames, window ledges, and garage doors; water stains on ceilings and leaks under sinks or around toilets. And, of course, fix doors that don’t shut correctly and make cosmetic repairs, like painting.
Get a Professional Evaluation. Once you’ve done this work and believe you are ready to sell, consider hiring a home inspector to examine any potential problems, such as bad wiring or outdated plumbing. While it may cost a few hundred dollars, a home inspection will make sure you haven’t missed anything and a report will show buyers they aren’t in for any surprises.
Eliminate the Clutter. Potential buyers will envision themselves in the home, so keep the house free of items that will distract them. Rooms that feel crowded or overly decorated will make it tough for them to see how their things fit in. It may feel weird to take down family photos, put away family heirlooms, and make the space more minimalistic, but it’s critical to take these steps to sell your home quickly.
Market Your Home. The house should look its best in the property photos and collateral materials. As more and more buyers are turning to the internet to begin their home search, good photos are critical. A good real estate agent will hire a professional photographer to take photos of your home’s interior and exterior. The photos will be used on the MLS® for viewing by all licensed REALTORS® and prospective buyers, print advertising and marketed through the internet.
Don’t Set a Price That’s Too High. The biggest mistake a seller makes is asking too much money for their home. If the home is overpriced, it will stay on the market longer and may impact the final sales price.
When determining the sale price, doing an analysis of comparable sales during the past six months in the same neighborhood, subdivision or surrounding area provides the true market value. You may also want to look at the prices of other homes for sale in the neighborhood and make sure your price is in line. Make certain you and your real estate agent are comfortable with the initial price and move ahead with your plan.
Mark Cole is Chief Executive Officer of HLP, a nonprofit mortgage technology company based in Baltimore. HLP ’s web portal is a one-stop technology solution to help homeowners nationwide ensure that critical documents from distressed homeowners reach mortgage companies. To find out more about HLP’s services, visit www.hlp.org.