Most home sellers dream of a stress-free sale in which they simply list their house, quickly find a qualified buyer, collect the cash and hand over the keys. If only it were that simple! In reality, selling a home involves many moving parts — some that you can control, and some that are out of your hands.
For example, geography might influence how long your house lingers on the market or how high of a list price you can get away with. In locations where competition is hot and inventory is low, odds are you’ll sell faster and command a higher price. Conversely, in places where home sales have cooled, you will likely have to work harder to attract the right buyer.
The real estate market has shifted since the frenzied heights of the pandemic. Frantic bidding wars are (mostly) over, and both prices and mortgage rates remain high. With fears of a recession looming, many buyers are staying on the sidelines until either rates or prices (or both) come down. Ultimately, this has created a more balanced market: Sellers no longer have the clear upper hand.
So, as a seller, it’s smart to be prepared and control whatever factors you’re able to. Things like hiring a great real estate agent and maximizing your home’s online appeal can translate into a smoother closing — and more money in the bank. Here are nine steps to take to sell your home in 2023.
1. Set a timeline for selling your home
Selling a house is a major undertaking that can take several months from start to finish — or much longer, depending on local market conditions. So it makes sense to plan ahead and stay organized.
As soon as you decide to sell your house, jump right into researching real estate agents to find someone with the right experience for your situation (see Step 2). But don’t stop there.
At least two or three months before you plan to list, consider getting a pre-sale home inspection. This is optional but can be useful to identify any problem areas, especially if you suspect serious issues. Leave enough time to schedule necessary repairs.
About a month before listing your house, start working on deep cleaning in preparation for taking listing photos. Keep clutter to a minimum, and consider moving excess items to a storage unit to show your home in its best light.
2. Hire an agent who knows the market
The internet makes it easy to delve into a real estate agent’s professional experience, helping you choose the right person to work with. Look up agents’ online profiles to learn how long they’ve been in the industry, how many sales they’ve closed and what designations they may have earned. Pay attention to how and where they market their listings, and how professional their listings’ photos look.
“Any designation they’ve earned is a huge plus, because it’s a sign they’ve taken the time to learn about a particular niche,” says Jorge Guerra, president and CEO of Real Estate Sales Force and a former global liaison for the National Association of Realtors (NAR).
Some homeowners might be tempted to save on paying a commission and instead sell their home themselves, without an agent. This is known as “for sale by owner,” or FSBO. The amount sellers stand to save on those fees can be thousands of dollars, usually 2.5 percent or 3 percent of the total sale price. However, as the seller, you’ll still need to pay the buyer’s agent’s commission — and an agent does a lot to earn their fee. For example, they can expose your house to the broadest audience and negotiate on your behalf to garner the best offers possible. If you go it alone, you’ll have to personally manage prepping your home, marketing it, reviewing buyers’ offers and handling all the negotiations and closing details. When working with an agent, keep in mind that real estate commissions are often negotiable. As a result, you might be able to get a break at the closing table.
3. Determine what to upgrade — and what not to
Before you spend money on costly upgrades, be sure the changes you make will have a high return on investment. It doesn’t make sense to install new granite countertops, for example, if you only stand to break even on them — or even lose money. Plus, these improvements may not be necessary to sell your home for top dollar, particularly if inventory levels are low in your area. A good real estate agent will know what people in your area expect and can help you decide what needs doing and what doesn’t.
In general, updates to the kitchen and bathrooms provide the highest return on investment. But inexpensive DIY projects can also go a long way: A fresh coat of neutral paint and spruced-up landscaping are low-cost ways to make a great first impression.
There’s also the option of getting a pre-sale home inspection. This is optional, but it can be a wise upfront investment, especially in an older home. For a few hundred dollars, you’ll get a detailed inspection report that identifies any major problems. This alerts you in advance to issues that buyers will likely flag when they do their own inspection later in the process. By being a few steps ahead of the buyer, you might be able to speed up the selling process by doing repairs in tandem with other home-prep work. Then, by the time your house hits the market, it should be ready to sell, drama-free and quickly.
4. Set a realistic price
Even in competitive markets, buyers don’t want to pay more than they have to, so it’s crucial to get the pricing right. Going too high can backfire, while underestimating a home’s value might leave money on the table. To price your home perfectly from the start, consult comps. This information about recently sold properties in your neighborhood gives you an idea of what comparable homes around you are selling for, thus helping you decide how much you might reasonably ask.
“A frequent mistake sellers make is pricing a home too high and then lowering it periodically,” says Grant Lopez, Realtor at Keller Williams Heritage and former chairman of the San Antonio Board of Realtors in Texas. “Some sellers think this practice will yield the highest return. But in reality, the opposite is often true: Homes that are priced too high will turn off potential buyers, who may not even consider looking at the property.”
In addition, homes with multiple price reductions may give buyers the impression there’s something wrong with a home. So it’s best to eliminate the need for multiple reductions by pricing your home to attract the widest pool of buyers from the start.
5. List your house with professional photos
This step will likely involve your real estate agent registering the listing with the local MLS (multiple listing service). Here are some tips to get your home market-ready:
Get professional photos:
Work with your real estate agent to schedule a photographer to capture marketing photos of your home. With the ubiquity of online house-hunting these days, high-quality photos are critical. A pro photographer knows how to make rooms appear bigger, brighter and more attractive. The same goes for your lawn and outdoor areas.
Focus on online appeal:
You’ve probably heard of curb appeal, but professionals say online appeal is now even more important. In fact, nearly all homebuyers look at online listings — 96 percent, according to NAR. “Your home’s first showing is online,” Guerra says. “The quality of your web presentation will determine whether someone calls and makes an appointment or clicks on the next listing.”
Stage it and keep it clean:
Staging a home entails removing excess furniture, personal belongings and unsightly items from the home while it’s on the market, and arranging rooms for optimal flow and purpose. If you’re in a slower market or selling a luxury home, investing in a professional stager could help you stand out. Nationally, professional home staging costs an average of around $1,770, according to HomeAdvisor, but prices range between about $778 and $2,839.
Clear out for showings:
Make yourself scarce when potential buyers come to view your home. Let them imagine themselves in the space, free from the distraction of meeting and talking to you. “Seeing the current homeowner lurking can cause buyers to be hesitant to express their opinions,” says Lopez. “It could keep them from really considering your home as an option.” Generally, buyers are accompanied by their real estate agent to view your home. You can also ask your own agent to be present at showings.
6. Review and negotiate offers
Once buyers have seen your home, the offers will ideally start rolling in. This is where a real estate agent is your best advocate and go-to source for advice. If your local market favors sellers, buyers will likely offer very close to asking price, or possibly even above. On the other hand, if sales are slow in your area, you may have to be open to negotiating.
When you receive an offer, you have a few choices: accept it as-is, make a counter-offer or reject the offer. A counter-offer is a response to an offer in which you negotiate on terms and/or price. Counter-offers should always be made in writing and provide a short timeframe (ideally 48 hours or less) for the buyer to respond. You can offer a credit for paint and carpet, but insist on keeping your original asking price in place, for example. Or, you might offer to leave certain items behind to sweeten the deal.
If you’re lucky enough to get multiple offers, you might be tempted to simply go with the highest bid. But look closely at other aspects of the offer, too, such as:
- Form of payment (cash versus financing)
- Type of financing
- Down payment amount
- Concession requests
- Proposed closing date
Be mindful that if a buyer is relying on lender financing, the property will have to be appraised. If there’s any shortfall between the purchase price and appraised value will have to be made up somewhere, or the deal could fall apart.
7. Weigh closing costs and tax implications
In any real estate transaction, both parties must pay at least some closing costs. The seller typically pays the real estate agents’ commissions, which usually total around 5 percent to 6 percent of the home’s sale price.
Some other closing costs commonly paid by the seller include transfer taxes, recording fees and outstanding liens. Additionally, if the buyer has negotiated any credits to be paid at closing — to cover repairs, for example — the seller will pay those, too. Your real estate agent or the closing agent should provide you with a complete list of costs you’ll be responsible for at the closing table.
The good news is that you may not owe the IRS taxes on your profits from the sale. It depends on whether it was your primary residence, how long you lived there and how much you make on the sale. If you’ve owned and lived in your home for at least two out of the previous five years before selling it, then you will not have to pay taxes on any profit up to $250,000. For married couples, the amount you can exclude from taxes increases to $500,000. If your profit from the home sale is greater than that, though, you’ll need to report it to the IRS as a capital gain.
8. Consider hiring a real estate attorney
Some states actually require sellers to have a real estate attorney to close on a home sale, but many don’t. Regardless of your state’s rule, the expense is worth it to protect such a large financial transaction. It may cost you a couple thousand dollars, but there’s a lot more money than that at stake, and it can never hurt to have a legal expert give everything the OK.
In addition, an attorney can help fill out paperwork correctly, review contracts and documents, identify potential issues and ensure the sale goes as smoothly as possible. An attorney would also be able to spot title issues that could hold up your sale for weeks or months — or even torpedo the deal — such as outstanding liens or encumbrances, trust or issues and encroachments.
9. Gather paperwork and close
Lots of paperwork is needed to properly document a home sale, so keep it organized all in one place to help things go more quickly. Your agent can help you make sure you’ve got everything you need. Some of the main documents you’ll need to compile include:
- Original purchase contract
- Mortgage documents
- Tax records
- Appraisal from your home purchase
- Homeowners insurance
- Home inspection report, if you had one
Finally, once everything is signed and handed over, your house is sold!
Making The Dream Reality
Everyone has a dream they want to come true in life. Whether it’s having the Ultimate job, living where you’ve always wanted, starting a family or a combination of all these, our aspirations motivate us to pursue these passions and interests. But reaching your dreams starts by setting goals for yourself and having the tenacity and initiative to achieve them.