Selling a home for the first time can be scary. Don’t let your fears paralyze you! Luckily there is a wealth of knowledge out there to help homeowners make the most of their sale. If you want the step-by-step playbook, we’ve got you covered. In this post we’re going to highlight a handful of key tips to guide first-time home sellers. Keep reading to see the 5 things anyone selling a house for the first time needs to know.
1. Understand What You Can Control; Outsource What You Cannot Control
Selling a home is unavoidably chaotic. It will never proceed exactly how you imagine; you must make your peace with that ASAP. Many of the challenges to come can be identified in advance, but some of them will be unknown. The only way to arm yourself to overcome these tricky parts is to accept what is in your power to affect, and recognize that you can/will need outside help for other parts of real estate transactions to avoid costly mistakes.
For example, how much home improvement does your house need to be market ready? (Even a first-time seller can probably guess — after all, you know what you deemed acceptable when you purchased your home). It would be great to save money performing a few simple repairs yourself; however, if there is a serious issue then do not fool yourself into thinking DIY will suffice. Don’t be a hero! Reach out early and often to recruit the right professionals to help. Top-notch contractors, realtors, and others are worth their weight in gold for first timers.
2. Pricing: 50% Art, 50% Science, 100% Imperfect
One of the most dangerous things a home seller can do is attempt to value their own property and become committed to that number. An intelligent and resourceful seller will check out a few online valuation calculations and monitor comparable, recently sold properties to generate a realistic price that makes sense — and that number will almost certainly be wrong.
Assessing real-time competitive market value of properties takes years of experience and insight. Truthfully, only an expert real estate broker is qualified to accurately predict what your home’s final sale price will be. Even they get it wrong sometimes too! Doing your homework is admirable, but don’t get attached to a price until you’ve gotten some expert opinion on the real estate market. Then, whenever your home finally does sell, don’t beat yourself up for feeling that you could’ve gotten more. No final sale price is ever perfect.
3. Necessity Is the Mother of Sub-Optimal Sales
This next point may seem like a no-brainer, but it is supremely unwise to try to sell a home under duress. Life happens, of course, but a sale with your back against the wall is absolutely going to yield a sub-optimal outcome. The point to take is that whatever fallbacks, whatever runway you have given yourself — it isn’t enough.
Assume the worst case scenario could transpire for every facet of the sale. Whatever timeline you have to sell, extend it. However much you are budgeting for renovations, double it. Whatever you are counting on funding with the proceeds from your sale, secure alternative means. If you’re buying a new home, prepare to pay two mortgages for a couple weeks. Do you need to execute a 1031 exchange to avoid paying a capital gains tax -- start planning for that down payment now or face the firing squad of unfortunate tax implications later.
If you can factor these eventualities into your budget, you won’t be blindsided when they arrive and force you to make desperate decisions in your sale. Being informed, prepared, and on top of your personal finance throughout the selling process will save you big time when it comes to closing costs -- and help you have a stress free sale!
4. Sentimental Value Doesn’t Show Up in an Appraisal
To capture top dollar for your home, you need to stop thinking about it as that — a home. It is property, a parcel of land with a livable structure erected upon it. Nothing more, nothing less. You must start to see your property as a pure commodity that you are preparing to introduce to a capitalist market.
If this sounds a bit cold and calculated, it’s because it is. When potential buyers look at houses, they aren’t going to see all the memories you had with your family in your home. They are not going to pay more money for a building where your children took their first steps, or where your mail carrier always greeted you by name. All of the sentimental value you place on your home means nothing to a potential buyer; more objective aspects, like functional home improvements or an abundance of natural light or neutral colors might help you sell quickly though. The sooner you can detach yourself from emotion, the sooner you can start maximizing your return on your real estate investment by boosting your home's sale price and inducing an all cash offer.
5. You Hold the Cards; Stack the Deck in Your Favor when you sell your home
Ultimately, maintain some perspective on the journey on which you’re about to embark. You are a homeowner who has something obviously very valuable to others — your property. Yet you also possess something else that is extremely desirable — your listing.
Real estate agents will do just about anything to get your listing. Let them. Make a real estate agent work for the right to represent you. That way you can get the most out of your sale, all while learning in advance if an agent is worthy of your home. At TrueParity, we put agents in competition to offer sellers the best possible sale terms. Homeowners have incredible leverage and even if you’re selling for the very first time, you can make your listing go a long way.
Summary
Selling a house can be daunting, especially if you’ve never done it before. But by following these simple lessons you can make it successful: outsource when you need expert help, don’t over commit to an asking price, give yourself extra cushion in case of adversity (especially closing costs), think objectively about home sales as voluntary asset liquidation, and flex your position before awarding your listing to a real estate agent. You're already on your way towards getting the most you can for your home equity.
Like this article? Send it to anyone preparing for their first home sale. Ready to sell your house? Get started at TrueParity today.
