Selling a House: Strategies & Process

Instructor: Dr. Douglas Hawks

Douglas has two master's degrees (MPA & MBA) and a PhD in Higher Education Administration.

Part of the American Dream is owning your own home, but at some point, you may want to sell that home. In this lesson, we'll talk about some common home selling strategies, and the basic process involved.

Using an Agent or Selling on Your Own

The first decision that has to be made is if you are going to use a real estate agent or try to sell your house on your own, often called for sale by owner, or FSBO. One of the big advantages with going to an agent is the marketing access agents have. They can get your house listed on major websites, on the national database of homes for sale, and they are only paid if your house sells, so they have all the motivation in the world to sell your house.

However, they can charge a total of 6%. If you have a lot of equity in the house, that might not be a big deal, but if it has to come out of your pocket, or limits how low you can go when you negotiate, you'll need to prioritize. But, if paying $12,000 on a $200,000 sale makes you nervous, statistics do show that using a real estate agent typically results in selling for a higher price, helping offset the cost of using the agent.

Marketing Your Home

Whether you use a real estate agent or not, you will want to get the best price possible for your home. This means you will need to prepare your home to look attractive to potential buyers, determine the right price to ask for your home, and attract the attention of as many buyers as possible.

Prepare Your Home for Sale

You are probably familiar with some of the basics of preparing your home for sale from your own experience, articles in the media, and TV shows. Your real estate agent can make additional suggestions and you may even choose to have an inspector do a pre-sales inspection to make sure necessary repairs are done before you put your home on the market.

Some common sense tips include:

  • Make sure the exterior of the home has 'curb appeal' by performing needed repairs, cleaning or painting, and sprucing up the landscaping
  • Repair anything that is not in good working order--no leaky faucets, unfinished projects, or even sticking doors that can raise questions in buyers' minds about home maintenance
  • Declutter your home and remove personal items so that the rooms and storage areas look spacious and buyers can imagine their own things in the space
  • Open blinds and drapes and turn on the lights and make sure your home is thoroughly cleaned and smells fresh

Determine the Right Price

One of the most important decisions you'll make early is what the listing price should be on your home. The listing price is the price that will show on any ads, databases, or websites. Unless the market is incredibly strong in your area, you probably won't actually sell your house for the listing price, so there are a few things you need to think about.

First, how much do you really think your home is worth? We all want to overvalue our own assets, but try to be objective. What would a reasonable person pay? You or your agent should check the actual prices that homes like yours in your area have sold for. Second, how badly do you need to sell? Are you moving for a job and need to sell within two months? That will motivate you to sell. Remember, each month you don't sell your home you are making another payment on it.

Attract Buyers' Attention

A real estate agent will almost always list your home on the multiple listing service, or MLS. This is a database that includes almost every home for sale by an agent in the United States. The MLS is nationwide, meaning agents in Maine can see your property for sale in Arizona. You aren't limited to a local market or a specific population, but you have the whole country as a potential market.

You could post on websites especially set up for 'for sale by owner' listings, but most of the time you are limiting yourself to buyers who are also looking for a deal. They know that if they shop with an agent the seller pays that agent 3%; so, instead of having an agent, those buyers are going to tend to be more aggressive in negotiating. So, while 6% sounds like a lot of money to sell your house, make sure you really think about the amount of work that is left on your shoulders should you decide to go it alone.

Negotiating a Price

When buyers want to put in an offer, you may get a verbal offer first, but you'll soon get a signed contract that essentially gives you the price, and any considerations they want. Maybe they want you to leave the kid's swing set. Maybe they want you to fix the fence. They can put almost any conditions in they want. Don't worry - you don't have to accept them; it's all just a piece of the big negotiation puzzle.

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