How to Sell a House
Updated April 12, 2021 12:00 AM By Matt Langan
Overwhelmed. That’s how most people feel when they think about selling a house, buying a house, or moving in general. There are many different ways to sell a property, but let’s focus on how to sell a house for the most money and with the least amount of stress. Sound good? Great, let’s dive in!
This guide covers:
3 Different Ways to Sell a House
When you initially decide to sell your house, you probably have a general idea of how you’ll do it, which will involve reaching out to and working with a real estate agent. In fact, eighty eight percent of sellers use real estate agents to guide them through the selling process. However, there are a few other ways to sell your home that are sometimes worth considering.
The three primary ways to sell your house are:
- For Sale By Owner (oftentimes referred to as FSBO)
- Hire a real estate agent or broker to help you sell your house
- Sell your home for cash to an investor, or to an online service (oftentimes referred to as iBuyer companies) like Homelight, Zillow Offers, Opendoor, Offerpad or RedfinNow
Selling your home online is a relatively new method. The major benefits of selling your home for cash is time and convenience. If you go with this option, you don’t have to prepare your home for a sale and you could move and close in a matter of days. In fact, you may even be able to choose the exact date that you want to close and move, making it a quick and easy process.
However, the major drawback of selling your home to an iBuyer is that you will make significantly less money on the sale of your home. In fact, you likely won’t receive the market value of your home. Since we want to show you how to sell your house for the most money and with the least amount of stress, the rest of this article will focus on more profitable methods of selling your home: hiring a real estate agent or selling a home on your own.
Selling a House with a Real Estate Agent vs. For Sale By Owner (FSBO)
The process of selling a house is actually the same regardless of who does the work. The main difference is that by hiring a real estate agent, the homeowner does less work and has a better chance of selling their home for a higher price.
When you hire an agent, they should have a legal contract, access to a local Multiple Listing Service (MLS), a marketing strategy and many professional connections that will help facilitate the home prep, marketing and selling processes such as lenders, stagers, contractors, inspectors, appraisers, real estate attorneys, title companies and more. When you hire a real estate agent you will still have to help prepare your house for the market and move out of your home, but every other aspect of the real estate transaction will be handled by your agent. You won’t have to worry about contracts, marketing, showings, staging, etc.
Listing a home for sale on your own requires a lot of time and work but you may profit more by doing so. FSBO home sales could save you money since you won’t have to pay a seller’s agent fee; however, if the buyer of your home uses an agent, you will still need to pay the buyer’s agent fee.
Additional fees associated with marketing and selling a home on your own can add up fast. For instance, you may have to pay for:
- Listing your property in the MLS
- A real estate attorney
- Marketing materials (brochures, signage, flyers, etc.)
- Photography and videography
- Virtual or in-person staging
When deciding whether or not to sell a home on your own, you should also consider your opportunity cost (the loss of gain from an activity which you miss out on by spending time selling your home) of doing so. If your opportunity cost is high, you should hire an agent to sell your house while you do a different activity that creates more value for you (which could be relaxing, exercising or spending time with loved ones - value can be measured in many more ways than in dollars).
You should also consider that most homes sold by homeowners sell for less than homes sold by real estate agents. The median sales price for FSBO homes was $217,900 in 2020 compared to $242,300 for agent-assisted homes (source: National Association of Realtors 2020 Profile of Home Buyers and Sellers). In other words, the average FSBO makes less money and wastes more time than homeowners who hire real estate agents even though FSBOs make a higher percentage of their home’s selling price.
Below is a high-level summary of how selling a home on your own and selling a home with a real estate agent compares:
4 Basic Steps to Sell A House
There are actually a lot more than four steps to sell a house. The exact steps to sell a home will differ depending on your local market, competition, and your home’s condition and value. We recommend hiring a real estate agent or consulting with a professional in the industry, but the process of selling a home boils down to these four steps:
1. Do Research and Make a Plan
You can and should make a plan for your home sale before you even decide how you’re going to sell your house. Consider what repairs or improvements could be done to your home, what you’re able or willing to do, and maybe even research the tax implications of your home selling.
You’ll also want to have an idea of the timeline ideal for your family. Think about how long it will take you to prepare your home for the market, how long it will take you to move, and your financial needs in your new living arrangements.
Next, reach out to one or a few agents to ask questions or do interviews. Make sure the agent that you work with is an expert in your area and has a proven track record of selling houses.
Your real estate agent will most likely have their own unique method of selling homes in your real estate market. There are a few common things that successful agents and homeowners do before preparing a home for sale:
- Do a comparative marketing analysis (CMA)
- Set an official timeline
- Create a marketing plan or promotion strategy
If you’ve never heard of a CMA, you’re not alone. Basically, a CMA is a real estate term for research that helps you determine the market value of your home. You can do a basic CMA on your own by looking at similar homes that have recently sold in your area. You’ll see some patterns in about ten minutes of scrolling Zillow, but a real estate agent will be able to give you much more in-depth information which they have access to by being a member of a local MLS. Doing a CMA is a vital step in the home selling process. If a home is not priced appropriately, it is at risk of not selling at all and wasting your time (if it’s overpriced) or costing you money (if it’s underpriced).
A successful real estate marketing plan doesn’t need to be extremely confusing and detailed. In fact, you may not need to spend a lot of time and effort promoting the listing if you live in a highly competitive market in a busy time of year. No matter what the price of your home or the type of market you live in, you should have a plan to get your home in front of potential buyers.
2. Prepare the House for the Market
Even if you keep your home clean and organized all the time, you’ll still need to prepare your house to go on the market. But don’t worry - unless you have the Property Brothers on speed dial - you don’t need to do a full renovation before selling. Instead, you’ll just have to think about what is most appealing to buyers.
For example, leaving lots of family photos or personal items out can make buyers feel like they are walking through someone else’s home. Instead, you want them to naturally picture themselves in your home.
There might also be a few small projects or repairs that can be done to increase the perceived value of your home. For example, replacing your light switch and outlet covers is a simple thing that makes buyers feel that the property is fresh, clean, and well taken care of.
What Should I Do to My House Before I Sell It?
Before you list your home for sale, you should:
- Declutter; remove any unnecessary items or furniture from your home
- Upgrade your curb appeal
- Organize storage areas
- Remove family photos or personal decor pieces
- Make repairs and complete unfinished projects
- Do a deep clean
- Make home upgrades (DIY or hire a professional)
- Consider getting a home inspection
- Take high-quality pictures or pay for professional photography
- Use virtual staging
Getting a home inspection done before listing your house is not a necessity, but it can shorten the negotiation process. If there are big-ticket items that need to be fixed, like a roof replacement, you may be able to use your home insurance to cover the cost. Then you can also advertise this new improvement in your home listing.
Regardless of what home projects you do or don’t do, you can attract buyers willing to pay the highest prices by using virtual staging. Virtual staging highlights your home’s best features, and professionally designs your rooms. You can even change wall colors, appliances, and add natural light without having to lift a finger.
Even if your home is not in perfect condition, virtual staging shows buyers the potential of a space and helps your home sell more quickly. In fact, staged houses sell 87% faster and for 17% more money than vacant houses or non-staged houses (Forbes)--so virtually staging your home is an important part of preparing to market and sell your home.
If you were looking for a new home, which living area would appeal to you more?
Virtually staging with Stuccco is only $29 per photo and only takes 24 hours. If you don’t want your home to sit on the market - but you want it to fly off the market, then Stuccco is the best possible tool you have.
3. List the House on the Market
Now that your home is ready, it’s time to put it on the market!
Putting a house on the market generally means listing it on the MLS, which automatically posts it to third-party listing sites like Zillow, Redfin, Realtor, and Trulia.
If you are working with a listing agent, they’ll start scheduling showings, answering questions, and communicating back and forth with buyers and buyer’s agents. As a FSBO seller, you’ll be the one responsible for communicating with everyone, which can get overwhelming.
Plan ahead of time what you’re going to do while your home is on the market. You’ll have visitors coming to your home, sometimes with very little notice, and you’ll have to continually keep it clean and organized. Many homeowners choose to go out of town when their home is listed so the real estate agent can free schedule as many showings as possible.
Bonus tip: If buyers particularly love the virtual design of your home, you can help them make it a reality. After they close on their new home, they can use online interior design to redesign each room or get the exact products used in virtual staging.
4. Accept An Offer and Close
Accepting and reviewing contracts works differently in every state, but your agent should be able to translate the notable features in different offers.
Read through your offer(s) and make sure you completely understand the purchase price, closing date, contingencies, special allowances and the buyer’s financing.
You can negotiate the offer before signing a purchase agreement.
Once your home is under contract, you’ll have a home inspection, an appraisal, and you’ll wait for the buyer’s financing. If you are still living in your home, make sure you get completely moved out with plenty of time before the closing date.
FAQs: How to Sell a House
How long does it take to sell a house?
The home selling process can take as little as a few weeks, or it can take more than six months. In 2020, houses were on the market for an average of 24 days, and under contract for an average of 46 days. To estimate how long it could take to put your house on the market, consider how many home upgrades you need to do.
When is the best time to sell your home?
Overall, the best time to sell a house is typically May, and the best day to list is on Saturday (Zillow). However, things may be different in your local real estate market--especially if you live somewhere with extreme weather. Check with local real estate agents to get their first-hand knowledge about the best time to sell your home for the most money.
What do you have to pay when you sell a house?
There’s no up front cost to list your home for sale. If you work with a real estate agent, the cost of selling your home is about three percent to six percent of the sale price. However, this cost is taken out of your profits before you receive them.
The cost of putting your house up for sale by owner (FSBO) is slightly more difficult to calculate. You’ll still pay about three percent of the sale price to cover the buyer’s agent fee, plus any additional costs like hiring a real estate attorney, title company, marketing fees, etc.
What is the fastest way to sell a house?
The fastest way to sell your house is to attract and form a positive impression on a lot of buyers. The more potential buyers who see your home, the more likely it is that your home will sell quickly. The best way to capture the attention of buyers and to make a positive first impression on them is to use virtually staged listing photos to highlight your home’s true potential and its spaces' intended use. You can get your photos virtually staged here.