Be sure to ask each agent about his or her commission rate. While most agents charge somewhere between four and seven percent, rates are not set in stone and it’s always possible to negotiate.
The Beginner's Guide to Selling Your Home
First time selling a home? Here are some easy-to-follow tips that will help smooth out the process.
Tricia Mangabat | Relationship Manager
First Republic Bank
3 min read
So the time has come to move on from the first and only home you’ve ever owned. The next phase of your life awaits — but first, you’ve got to sell your current abode. And, as you have likely guessed, selling a home can be a very different process to navigate than purchasing one.
The good news is: This is a seller's market — according to the National Association of Realtors, sellers received a median 98 percent of their asking price in 2017 — and there are a few simple steps you can take right now to further set yourself up for success.
Step 1: Find the right listing agent
Why it’s important: Remember how important your real estate agent was in helping you discover and purchase the right home? Well, finding a knowledgeable and skilled agent is going to be even more essential this time around — especially if you want to secure top dollar for your home while avoiding unnecessary stress.
In practice, this may or may not be the agent who helped you purchase your home. Interview agents who have a proven track record of selling homes at asking or above-asking price in your area — preferably even in your neighborhood. Request references. See how your personalities mesh. The stakes are high and this person will be acting as both your filter and advocate. Don’t be afraid to take your time to get it right.
Bonus tip: Be sure to ask each agent about his or her commission rate. While most agents charge somewhere between four and seven percent, rates are not set in stone and it’s always possible to negotiate. Balance a listing agent’s rate against other factors that are important to you such as personal availability and selling philosophy. Getting the best possible outcome from a sale takes a lot of time and effort, and while the best agents likely won’t be cheap, they should provide commensurate value.
Step 2: Don’t skimp on the photos
Why it’s important: You might think you’re pretty handy with a camera and that taking the photos of your house for your listing yourself could save you a couple hundred bucks. Keep in mind, however, that most homebuyers scroll through dozens — if not hundreds — of photos online. In order to make your house stand out, you’ll need great-looking photos with just the right angles and editing. Some realtors prefer to work with professional photographers to get the best shots. Others might try to take the photos themselves. Be sure you and your realtor are on the same page before moving forward with the photography phase.
Bonus tip: Staging your home appropriately is an important step for not only listing photos, but also for future open houses. So take down family photos, remove clutter — think excess furniture, kids’ toys, etc. — and, at the very least, add a fresh coat of paint.
Step 3: Be focused but flexible
Why it’s important: It can be easy to get caught up in a preconceived idea of how things will play out. But if you’ve done your due diligence and have found an experienced selling agent, it’s important — both for a successful sale as well as your sanity — to maintain a degree of flexibility. For example, if you aim too high when it comes time to set a listing price, you might scare off motivated and prepared buyers and find yourself forced to undergo multiple price reductions. Similarly, though you may be eager to move, it can sometimes make more sense financially to wait until peak homebuying season between early spring and early fall.
Bonus tip: Keep in mind that some buyers might be more enticed to offer your asking price if you throw in some additional perks such as new kitchen appliances, a washer and dryer, mounted flat-screen televisions or new blinds for the windows.
Step 4: Spend your money wisely
Why it’s important: Speaking of incentives, you may need to dish out some cash for cosmetic upgrades in order to make your home more appealing to buyers. The trick is knowing where to spend your money in a way that allows you to recoup it — and, hopefully, a bit more — in a sale.
Bonus tip: Most realtors will tell you that brand new carpet and a fresh coat of paint — generally in neutral tones that can easily go with anyone’s style of furniture — are among the best smart, basic renovations to undertake. On the flip side, you might want to skip renovation efforts that are unlikely to result in a break-even scenario, such as a bathroom remodel, which may only recoup you 50 percent of your spend.
Step 5: Think ahead to your next move
Why it’s important: While everyone’s financial situation is different, you might not be able to put down a substantial down payment on a new home without first selling your current one. Or perhaps you’ll be moving across the country and will need time between selling your current house and your move to plot out new living arrangements. Whatever your situation, it’s worth preparing a tentative plan for how long you’ll need after you sell to actually move.
Bonus tip: Rather than making the sale of your current house contingent on your purchase of a new home — which realtors advise against, if possible — if necessary you can always include a clause in your contract that allows you to still occupy your home or to rent it back from the buyers for a certain amount of time after a sale.
The takeaway
A little research and pre-planning is often all it takes to turn your first home sale from a trial into a triumph. Surround yourself with the right people, educate yourself in the process beforehand, stay proactive and you may even find yourself enjoying this exciting transition between two ways of life.
The strategies mentioned in this article may have tax and legal consequences; therefore, you should consult your own attorneys and/or tax advisors to understand the tax and legal consequences of any strategies mentioned in this document. First Republic does not provide tax or legal advice. We make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained here. This information is governed by our Terms and Conditions of Use.
