Preparing to Sell Your Home
You probably think I’m going to tell you to gut your kitchen or repaint the home, but in reality, the most important thing you can do to prepare your home for the real estate market costs nothing but time and elbow grease: deep clean the entire house, indoors and out.
When buyers come through your home, they are likely to open closets, peep in the garage, and look inside the refrigerator. You want every surface to be gleaming. The cleaner everything is, the more the buyer will trust that you have taken care of and properly maintained the home itself.
Clean inside the kitchen appliances, beside them, behind them, and under them. Wash the windows inside and out, including the frames, trim, and blinds. Clean out closets and storage spaces. You’re going to move anyway -- why not get a head start on packing up and giving away unwanted items?
If you have the budget, bring in a cleaning crew, have carpeting and flooring cleaned professionally, and have someone out to check for landscaping that’s in need of a trim. When you’re finished, your home should sparkle. Maintain it carefully throughout the process leading to the sale, keeping clutter out of sight and keeping it clean for any subsequent showings.
Odors are probably the number one thing that will kill a sale. Some buyers won’t even walk into the house if they detect an unpleasant odor. The most common odors are pet odors, smoke odors, cooking odors, and musty, mildew odors.
Besides a thorough cleaning, look into ways to mitigate odors, including repainting and replacing soft surfaces like rugs, drapes, and upholstered furnishings that can hold odors. If you are a smoker, smoke outdoors while the home is on the market.
Depersonalization is the process of taking away identifying elements from the home’s interior, including personal photos, memorabilia, political and religious items, and distracting decorative items. Many people become offended when asked to depersonalize their space, but the process is necessary for maximizing the home’s appeal to buyers.
Psychologically, your goal when selling your home is to allow a buyer to picture him or herself in your home. It is difficult to do this if they are looking at pictures of you and your family on vacation or looking at decorative items that are highly unusual or those that are reflective of your personal taste or beliefs.
Please remember, your goal is to get your home sold. Since you are moving anyway, it makes sense to go ahead and pack up photos and other personal items. In order to make this process as easy as possible, go ahead and take this step early in the process. You will find that it helps you and your family as you begin to transition emotionally from your current home into your new home.
If you are leaving your home vacant, you may want to save money by shutting off air conditioning or heating systems. This is a bad idea for a number of reasons.
First, many of your home’s systems depend on a fairly stable climate to work at maximum efficiency. It’s not good for pipes and appliances to experience large, frequent shifts in temperature. In addition, extreme heat can bring out unpleasant odors. Think about that stale smell when you first come back from vacation -- do you want buyers to encounter it when they enter your home?
Speaking of buyers, their comfort is the most important reason for keeping the home at a comfortable temperature. Whether the house is too hot or too cold, the uncomfortable buyer will be eager to leave and get back in his or her car rather than lingering to find out more about the house.
If you haven’t already, consider installing a smart home thermostat. Besides being a nice upgraded selling feature, it allows you to adjust the home’s AC or heat remotely so that you can ensure the house is always maintained at an optimal level, no matter the weather. In addition, you can set the thermostat higher or lower at night and on days when there are no showings, then adjust it for comfort when buyers are on the schedule.
A fresh coat of paint offers one of the highest ROIs (Returns on Investment) possible when it comes to preparing your home for buyers. If you are a careful and skillful amateur painter, paint it yourself to save even more money. If, however, you are not a good painter, hire a professional.
Why hire a pro? Having been in many homes with rushed, DIY paint jobs, the difference is striking. Bad color matching, sloppy edging, and drips on the trim or floor make a poorly completed paint job worse than no paint at all. Buyers not only have to repaint; they have to repaint and correct additional damage.
While you may be able to get away with just painting the walls and not the ceilings and trim work, be sure and paint ceilings if there are signs of previous water damage. Make sure that the water intrusion has been corrected and that the area has thoroughly dried out.
While some interior designers creating beautiful and dramatic looks with wallpaper, more often buyers think of wallpaper as old-fashioned and undesirable. Often, it is considered dated and, unlike an old-fashioned light fixture or other decorative elements, wallpaper is considered hard to remove as well. That means that buyers won’t want to deal with the mess and expense of removal, so you will probably have to do so for them.
Outdated flooring or flooring that is damaged should be replaced. Often, sellers are afraid to choose a new flooring because they might choose something that buyers wouldn’t like. In that case, they will add a flooring allowance in the property description to attempt to entice buyers while bypassing the problem altogether.
Here’s why that strategy doesn’t work: most buyers do not have the vision to overlook ugly or old-fashioned flooring or carpet. They would rather have a move-in-ready home than worry about choosing and installing new flooring or carpeting. If you are unsure about what type of flooring to choose, we can help you with that.
Just as with flooring, it is best to go ahead and do the work yourself. While it may sound like an added perk to give an allowance rather than choosing the “wrong” paint color or flooring, it puts the responsibility on the buyer. At the same time, it requires the buyer to envision the space with its updates -- something that most buyers struggle with.
In addition, buyers will often overestimate how much it costs to do work, so they may feel that your allowance is insufficient for the repair or improvement they have in mind. That can lead to even more negotiations and a higher cost than you would have had by doing the work yourself. On top of everything else, an allowance can create problems during the appraisal or mortgage underwriting process, further complicating the sale of your home.
Updating home infrastructure before you sell
As a caveat to this section, begin with the following assumption as you read: Buyers make emotional decisions, not logical ones. That’s why it is important to put your repair and improvement dollars into “bright and shiny” improvements wherever possible, not those behind the walls or those that are not immediately, visually apparent. Often, sellers make the wrong improvements, spending more money than they should on items that do not provide sufficient ROI. At every step, ask yourselves, “Will the buyer notice this improvement?” If not, avoid it.
If you want to provide reassurance for “back of the wall” or infrastructure items, consider purchasing a home warranty and including it in the listing. Obtain coverage for yourself during the listing period and for the buyer for one calendar year. This should cost around $550 -- much cheaper than any of the repairs on this list.
If your furnace and central air units are working properly, do not replace them, even if they are outdated or inefficient. Instead, have them serviced and cleaned, if needed, and ask for a report that shows that they are in good operating condition. This report can be shared with buyers. For more information on this topic, check out our blog post called Should I Replace My Furnace or Central Air Before Selling My House.
Unless your roof is noticeably battered, leaking, or otherwise showing obvious signs of damage, do not replace it. Have the gutters cleaned and explore the possibility of cleaning the roof if it has been discolored by tree sap, moss, or other debris.
If windows fail to open and close properly, are cracked, or have broken seals causing clouding and discolorations, you may need to replace them. Otherwise, do not replace windows. Check to ensure that there are no missing or torn screens and repair or replace screens as needed.
In most cases, superficial cracks in a driveway will have little impact on a buyer’s opinion of the home. Unless there is a real safety hazard, do not replace a driveway or part of a driveway. If necessary, consider power washing the driveway and walkways to make it look better as buyers approach the home.
As with all rooms in your home, deep cleaning, removing any offensive odors, replacing flooring and painting, if needed, are the most important things that you can do when preparing your home to sell. Besides that, the goal in the kitchen is to maximize space and give the impression that there is plenty of room for everything the buyer could possibly need to store or use.
- Remove magnets, pictures, and other personal items from the front and sides of the refrigerator.
- Remove items stored on top of the refrigerator including oversized bowls, serving pieces, or pantry items.
- If you have a pantry, make sure it is clean and attractively organized. Remove any unneeded items to maximize space.
- Remove everything but everyday necessities from surfaces, including blenders, mixers, crockpots, and other cooking utensils. You may want to leave a few decorative items out to enhance the space, but not enough to make it look crowded. Overall, the impression should be uncluttered and uncrowded.
- Remove dirty dishrags, sponges, dish soap containers, cleaning brushes, and other unattractive, unappealing items.
Imagine walking into a spa-like bathroom in a hotel or inn. The space smells sweet. There is no mildew on the caulk or rust stains in the tub. Towels are dry and freshly hung or folded. No toiletries or personal items are sitting out on the countertop.
This is how you want buyers to feel when they walk into the bathrooms in your home. Clean, then clean some more. Put away personal items, even if you find it inconvenient to do so. If you don’t have sufficient space in the bathroom cabinet, consider storing them in a basket and leaving it under the sink or in a linen closet.
If you have multiple bathrooms, you may want to consider closing off one or more of the bathrooms in your home from daily use. That way you’ll have less bathrooms that you need to keep perfectly clean each day.
Consider storing or donating off-season, outgrown, or little-used clothing in order to keep closets from looking crowded and disorganized. If you are currently storing sporting equipment, toys, or other items in closets, consider finding alternate storage space or rent a storage unit until you are settled in your new home. You want the closets to appear as if they have plenty of space.
While many buyers like the idea of a basement for storage or for later conversion as additional living space, they fear water intrusion in a basement. Evidence of water currently in the basement or past water damage will send buyers running.
There are three main reasons for water intrusion in a basement. The good news is that they are often fairly easy to correct. Check for the following:
- Full gutters: have these thoroughly cleaned before putting the home on the market.
- Improperly configured downspouts: Ensure these are cleared and long enough to funnel water away from the home’s foundation.
- Improper grading: Ground should slope away from the home to ensure that water does not flow into the basement.
Once you have corrected these problems, paint the walls a neutral color and paint the concrete floor gray. This makes the space look clean and fresh and helps to cover up any prior mustiness from previous water damage.
This depends on a number of factors. If the home is attractively furnished and uncluttered, it is generally best to market it furnished. This helps buyers picture themselves in the home. However, if the home is poorly decorated, outdated, dirty, and cluttered, it will look better once it is vacant and thoroughly cleaned.
You know yourself best. Keeping a home thoroughly clean and buyer-ready is a commitment of time and energy. If you have pets, small children, or are otherwise unable to keep your home in tip-top condition, you may benefit by waiting until you have moved out of the home to put it on the market if at all possible.
Many buyers need to sell their home before purchasing another home. If that is the case, selling a vacant home may not be an option.
Home staging is the process of optimizing a home’s interior design to make it more attractive to potential buyers. It seeks to minimize flaws and maximize the home’s selling points with the goal of a faster, more profitable, sale.
According to the National Association of Realtors, 96% of buyer agents say that home staging has a positive effect on their buyers. Why? Well, it goes back to what we were talking about earlier -- vision. By helping buyers picture the home at its best, they are better able to accurately gauge its value and make better-informed decisions about its potential.
When considering whether or not you wish to stage your home, take into consideration how staging can improve the sale process, including:
- making it more attractive in online marketing photos and videos
- allowing it to spend fewer days on the market before going under contract
- resulting in a higher purchase price and fewer repair requests
In addition, remember that buyers make their decisions based on emotion more than logic. Don’t underestimate the emotional impact of greeting buyers with a beautifully designed and decorated space.
There are different types of home staging depending on your home’s size, your budget, and your personal preferences. Some staging services optimize the home’s current decor by offering consultation on rearranging existing furniture, decluttering, and adding decorative accents. Other staging projects involve the installation of a whole house full of furniture, artwork, and accessories to optimize the home’s appearance.
If you are interested in staging and want to know more about the process and prices, visit the website of our preferred stager for more information.
Whether they are driving by the home and notice the For Sale sign, looking online at homes for sale in your area, or visiting for an Open House or scheduled showing, it’s important to make a great first impression on potential buyers. Here are some easy and affordable ways to optimize your home’s curb appeal.
- Park all vehicles in the garage and close the garage door.
- Trim bushes and trees, especially alongside the driveway and walkways.
- Keep the lawn mowed and fertilize and water as needed.
- Remove weeds from flower beds and plant seasonally appropriate annuals in planters.
- Refresh mulch or gravel around landscaping.
- Make sure all exterior lights are in working order.
- Store garbage cans, recycling bins, garden hoses, bicycles, and tools out of sight.
- Pressure wash outdoor terraces, patios, and other hardscapes.
- Remove flaking paint on deck and secure loose boards, spindles, and railings. Paint or stain as needed.
- Power wash exterior and paint if needed. (Note: vinyl siding cannot be painted, though aluminum and wood siding can.)
Pricing Your Home to Sell
You’ve probably heard the real estate maxim: Location, Location, Location. That’s because the home’s location accounts for the largest portion of your home’s value. If you can picture a triangle divided into three parts, location would be the bottom largest part, followed by the middle level that would consist of:
- Size of the home
- Lot size and characteristics
- Any detached structures or exterior features
- Number of garage stalls
The top smallest portion of the triangle would include amenities plus the following factors:
- Number of bedrooms
- Number of bathrooms
- The level that the bedrooms and bathrooms are on
While finished basements can add value, the amount of value is much less than above-grade square footage.
While online home evaluation websites are getting better, there is no substitute to an in-person walk-through by a licensed real estate agent or appraiser.
An in-person walk-through will always be more accurate than an algorithm.
There is just no substitute for real-life expertise when it comes to determining your home’s value.
Homes for sale matter only to the extent that they are your competition for buyers. Instead, comparing your home to those that have recently sold will tell you what the market is willing to pay for homes that are similar to yours -- not what sellers are hoping to receive.
Pending listings -- those that have gone under contract but not yet closed -- can also offer valuable information. They are the most current gauge of the market, but you won’t always know the final sale price until it is recorded at closing. Real estate agents should be keeping an eye on current pending listings and tracking their performance for the most up-to-date information available.
A lot of sellers want to build in bargaining room, and while I agree that you should build in some bargaining room, there is no need to build in much. Your price is like a magnet. The closer your price is to market value, the more buyers you will attract.
If there are two homes that are worth $200,000 and one lists for $204,900 and the other at $214,900 to build in more bargaining room, which home do you think will look better online and attract more buyers?
Buyers search for homes online using minimum and maximum prices ranges. A buyer that can spend $200,000 is probably looking up to $204,900 or $210,000. By listing at $214,900, your home becomes invisible to some of the most qualified buyers.
When you pick your price, you also pick your competition. By pricing at $214,900, you are now competing against all of the other $214,900 homes. While your home may compare favorably against all other $200,000 homes, it may not compare favorably to other $214,900 homes.
If you do price your home at $214,900 and find an ill-informed buyer who is willing to overpay, their lender will not be willing to give the buyer a loan if the home does not appraise for at least the sales price. If this happens, you’ll need to either renegotiate the contract with the buyer for the appraised value or the deal could fall apart.
The price you paid for your property, whether it was one year ago or twenty years ago, has little relationship to its current market value.
While home appreciation is common, it is certainly not guaranteed.
Consider this example: What if you acquired your home through an inheritance, in which case your cost was zero. How much would you try to sell it for today? You would likely attempt to get market value even though you paid nothing for it. Regardless of their cost, homes sell for market value.
There are a variety of improvements that add value to your home, including capital improvements such as additional bathrooms or the addition of structures or systems that were not there before.
Many people expect expensive repairs like a new roof or new HVAC system to add value. However, these are considered maintenance costs, not value-added improvements. While they may improve your home’s marketability and help you sell, they do little to add additional value.
Cosmetic changes and decorating can definitely add value but are also subject to individual tastes.
By overpricing at the start, you are wasting your best marketing period. The greatest interest generated in your property will come in the first couple of weeks when your listing is new and then showings typically taper off. Don’t make the mistake of overpricing your home during the period of its best activity, only to lower the price once the buyers are gone.
Overpricing your home at the start would be as foolish as a retailer marking their prices down a week after Black Friday. You can only create that demand one time.
In addition, you will have lost quite a bit of negotiating leverage that you would have had early in the process when demand was higher and activity was greater.
Most sellers think their home is worth more than it is, and most real estate agents will list at the price the homeowner wants without giving any guidance.
When multiple agents are competing for the same listing, some agents choose to tell the seller an inflated price just to secure the listing.
Both of these situations are a sure recipe for disaster! An agent who gains your listing at a high price now, will simply push for price reductions later.
I believe it’s better to lose a listing by telling the truth than to gain it by overpricing. You want your real estate professional to give you honest advice. It's the only way you can make proper decisions and plans.
Say you overprice your home, either to test the market or to build in bargaining room. Now, imagine that weeks pass and no one makes an offer on the home. You reduce the price to the level it should have been in the first place. Now, however, the home has been on the market for a while and the longer a home is on the market, the less perceived value it has and the harder it is to sell. If the house doesn’t sell at the new price, you may need to reduce it even more. Now, however, the listing is more stale, there are brand-new listings on the market capturing attention, and your home is becoming less desirable each day.
You will almost always net more money by pricing your home correctly at the start.
Because your real estate agent will provide a CMA and will have the most up-to-date information on pricing trends in your market, a pre-appraisal is generally not necessary. If you have particular concerns or an unusual property, you may want to consult with an appraiser to gain his or her perspective.
While a finished basement can be a good selling feature, it doesn’t add as much to your home’s value as above-grade square footage. Generally, finished basement square footage is valued at around 30% of above-grade square footage.
It depends if it is an above ground pool or an in-ground pool. Above ground pools do not really affect the value either way. In-ground pools add value to the price of a home but it also eliminates many prospective buyers that do not want a pool. Many homebuyers do not want the safety concerns of a pool or feel that a pool takes up too much precious yard space.
While it is very real to you, your financial situation has nothing to do with the market value of your home. If anything, a precarious financial situation and an urgent need to sell puts you in a weaker negotiating position. While you can list and refuse to negotiate, don’t expect anyone to play ball based on your personal needs.
Would you pay more for a home if you knew the seller needed the money?
List price is the advertised price that the seller is hoping to receive for a property. The sale price is the final price that they actually receive at closing. There can be a significant difference between listing price and sale price, depending on factors like negotiations, home repairs, seller assistance, and other adjustments.
A CMA (otherwise known as a Comparative Market Analysis) is a tool that real estate agents use to calculate a home’s value. Your home is compared to similar homes, known as comparables, that have sold in the past 6-12 months in your market.
Real estate agents will also look at homes that are currently for sale, currently pending, as well as expired or withdrawn listings that didn’t sell for whatever reason. They will also look at the supply vs the demand of the real estate market in your area, determining whether it is currently a seller’s, buyer’s, or balanced market.
An appraisal is a certification by a licensed professional that a house is worth a certain amount based on comparable sold properties. Appraisers are not interested in looking at current market trends or homes currently for sale. The value is based only on other sold properties over the past 6-12 months.
If the appraisal was completed more than a year ago, it has no relevance to current market conditions. In addition, if the appraisal was completed for refinancing or a home equity loan, it may not provide much information on the price a buyer would be willing to pay.
The appraisal process is usually completed after the seller and buyer have a fully executed purchase contract. The appraisal is completed by an appraiser that the buyer’s bank or mortgage lender hires. The bank wants to make sure that the home is worth at least the purchase amount before the loan process is completed.
There are a variety of options, including the following:
- A reappraisal can be requested (only if errors are found in the appraisal).
- The seller can change the sale price to reflect the lower appraised value.
- The buyer can add additional funds to the down payment to cover the difference.
- The buyer and seller can split the difference.
- The buyer can cancel the purchase agreement based on the appraisal contingency.
Assessed value refers to your home’s valuation for tax purposes. In some markets, the assessed value is lower than the market value. In other areas, the market value is higher than the assessed value. In most cases, the assessed value is based on historical information and may have little to do with the home’s current condition, thus assessment has little application when pricing the home.
The value your insurance agent assigns to your home is based on the replacement cost needed to rebuild or repair your home in the event of damage or loss. It has little or no relationship to market value based on comparable properties.
This is known as the principle of regression, which means that a large home’s value may be negatively impacted by smaller homes in the same neighborhood.
This is known as the principle of progression, which means that a smaller home’s value may be increased by proximity to larger homes in the surrounding area. This is where the advice “buy the smallest home in the best neighborhood you can afford” comes from.