- Are you selling your house for the right reasons?
- Selling a house in 3 months
- Within a week
- 3 months before listing
- A month before listing
- Week of listing
Are you selling your house for the right reasons?It’s no secret I think real estate investing can be a bad decision. One of the reasons I hear from people that drives them to sell their homes: “My house is probably worth WAY more than it was when I bought it.” Probably — but only because that’s how inflation coupled with good home maintenance works. We’ve all probably heard stories from old people talking about how they bought their house during the Taft administration for a sack of corn and a firm handshake and now it’s worth $1,000,000. The truth is, when you factor in taxes, maintenance, and other real estate expenses, most houses make a very poor investment. Yale economist and Nobel laureate Robert Shiller reported that from 1890 to 1990, the return on residential real estate was just about zero after inflation. Even Warren Buffett, one of the world’s wealthiest men, points out that houses don’t necessarily increase in value. By the way, he’s still living in the same five-bedroom house he bought in Omaha, Nebraska, back in 1958. BUT if you’re selling your home because of reasons like work, family, financial troubles, or going off the grid, etc … that’s fine. Just know that it’s not going to be the cash cow you might have thought it was going to be. If that’s the case, I want to show you how to do exactly that.
Selling a house in 3 monthsThe time you actually sell your house will vary depending on where you live. Housing markets differ from city to city. You might live in an area where it’s a seller’s paradise and everyone is looking to buy a house. Or you might find yourself in a buyer’s market, where people can’t get rid of their homes fast enough. Whatever your case, I’ve provided the exact steps you need to take in order to sell a house — along with a rough timeline.
Within a week…Below are all the steps you need to accomplish this week in order to get the ball rolling with selling your house.
Step 1: Choose your routeThere are two routes you can take when selling your house: For sale by owner (FSBO) or hiring a real estate agent. Both have their benefits and drawbacks, so let’s jump into each now so you can make the right decision for you: For sale by owner (FSBO) If you go the FSBO route, there’s the potential to save money on the real estate agent’s commission, since most agents get about 3% – 6% on the sale of a house. So on the sale of a $300,000 home, you could lose as much as $9,000 – $18,000. Of course, you save even more the higher the price of your home is. If you decide to go this route, you need to be serious and diligent about listing your home on places such as Craigslist, Zillow, and Facebook real estate groups for your hometown. You’ll also be on your own when it comes to things like:
- Home appraisal and pricing
- Listing on a Multiple Listing Service, which could cost hundreds of dollars if you do it on your own (more on this in a bit)
- Finding reputable home inspectors and photographers
- Showing the home to potential buyers
- Getting your house in front of potential buyers. Real estate agents have access to the Multiple Listing Service (MLS). This is a comprehensive online resource that has listings to the vast majority of properties in the country — and it’s a resource many American households turn to when searching for new homes. Since only real estate agents can list houses on the site, this gives them an edge on homeowners selling on their own.
- Saving you time. A Realtor will do all the legwork of scheduling and showing your home to potential buyers, as well as the tricky negotiations that will occur when a buyer decides to make the purchase.
- Referrals. If your friend or family has sold their houses recently, ask them if they know of any good agents.
- Find a Realtor. Check out the National Association of Realtors agent listings for a list of certified Realtors in your area.
- Open houses. By going to open houses, you’ll be able to get an inside look at how a Realtor conducts themselves. Get their contact information if they’re attentive and show that they know the ins and outs of the house.
Step 2: Pick a priceYour real estate agent will run a comparative market analysis (CMA) to determine a good price for your home. This is a comprehensive report comparing your house to other similar houses in your area that are listed to be sold. These houses will be comparable to yours in terms of size, the number of rooms, the number of bathrooms, etc. A good agent will walk you through the report and help you come up with an estimated price for your home. It’s important to keep in mind that while you believe your house is worth one thing, the market is the true determining factor of your home’s price. If you price your home too high, people aren’t going to want to buy. Price it too low, and you risk losing out on thousands. Work with your agent. They’ll help you come up with a good, objective price for your home.
3 months before listingOnce your agent and you come up with a price as well as a listing date, it’s time to prep your house for when it finally goes on the market. Below are all the things you’ll need to do to make sure your home is in top shape to sell.
Step 3: Clean out the homeMove anything that isn’t essential to your day-to-day life out of your home. This means things like:
- Electronics (TV, stereos, the 15 Amazon Alexas you got for Christmas)
- Art (paintings, statues, etc.)
- Seasonal clothes
- Non-essential cookware
- Workout equipment
Step 4: Hire a home inspectorHome inspectors help assess your home for anything that could negatively impact its value. This includes things such as:
- Structural (walls, foundation, ceilings, windows, etc.)
- Heating / Cooling
A month before listingYou’ve made the repairs and cleaned out your home. Now you’re ready to put the finishing touches on before potential buyers see it.
Step 5: Stage your homeIt’s now time to make sure your house looks attractive for potential buyers as well as the photographer (more on that in a bit). This means giving your home a DEEP clean. Every surface needs to be cleaned and polished. The carpets need to be destained. Dingy walls should be washed and repainted. Make sure your house is well lit. Replace old / burned out light bulbs and consider getting lamps for darker rooms. You don’t want potential buyers to walk in and feel like a vampire lives there. Also, keep your closets empty. Potential buyers should be able to walk into your walk-in closets and peek into your pantry and see a spacious area. They want to envision their things in there. Not yours. While it’s important to keep your inside space clean, don’t forget the outside of your house too. You’ll want to maximize “curb appeal” (how your house looks from the sidewalk or curb) as much as possible. Some things you might want to do:
- Power wash your driveway and deck.
- Add a fresh coat of paint to your door and trimming
- Place plants and flowers near your door.
- Consider removing that novelty welcome mat from your entryway
Step 6: Hire a photographerDon’t think you can snap a few pics on your iPhone, slap a filter on it, and call it a day. A good photographer can make or break your home listing. They’re responsible for giving potential buyers a look at your house for the first time. As such, they’re on the vanguard of the house selling process. That’s why you need to hire not only a photographer, but also a good photographer. Doing so will 10x your chances of getting your home looked at by your potential buyer. This is classic “Craigslist Penis Effect” — the idea that if you’re even a little better than your crappy competition, you’ll find great success (e.g., sending a thoughtful message on a Craigslist personal ad rather than just sending a picture of your bollocks like everyone else). ACTION STEP: Get attractive photos of your house. There are a few places you can look into when finding a real estate photographer. First, your agent likely has a list of great photographers they’ve worked with already. They’ll be perfect if you’re looking for a trusted, proven photographer. Second, check out listings of homes similar to yours and see what photos really stand out to you. If the photographer’s contact information isn’t listed, you can contact the Realtor directly and inquire about the photographer. Find at least five potential photographers. Look at their portfolio to make sure their photos are well lit, showcase the outside and inside of the houses well, and have actually sold the houses. Once you’re done, just choose one and arrange for a time for them to come photograph your house.
Week of listingThe big day is almost here. Your house is clean, the photos are taken, and everything is set for you to list your home — which brings us to …
Step 7: List your homeOnce your home is listed and your real estate agent has staked a sign in your yard, it’s time to conduct showings. Much of this will be up to your real estate agent. But there will occasionally be times when you’ll need to interact with the potential buyer and answer questions. When that happens, it’ll typically be a short-notice showing. That’s fine. Just do the best you can to clean up any clutter that might be lying around, and politely answer their questions. For open houses and showings planned in advanced, there’s no obligation for you to stick around — in fact, it’s probably better you’re not in your home. This allows potential buyers to more easily imagine themselves living in your house. So make plans to be out of the home during these times. Once your home is listed, though, congrats! Most all of the hard part is over. I say most because you still need to negotiate and sell your house.
Step 8: Sell your homeSo you’ve hooked a few potential buyers — it’s now time to reel them in. (That’s how fishing works right?) Your agent should have run a credit and background check into the potential buyer’s information to make sure they’re able to purchase the home. They’ll also give you the asking price offered by each of the potential buyers to you. The asking price will be lower than the price you decided on in step two. After all, your buyer wants a good deal too. At this point, you need to decide upon a settlement price. Your agent will help you come up with a number. A few things to keep in mind when deciding upon a number:
- Real estate agent’s commission
- Home inspector’s cost
- Repairs and improvement costs
- Closing costs (this is typically on the buyer but you might encounter it depending on the market you’re in)
- Taxes and fees (homeowners association, attorney fees, insurance, etc.)
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