Selling Your Home: Overview
by
Ilona Bray, J.D.
Learn about the home selling process, step-by-step.
Selling a home brings on a whole host of questions, and sometimes, anxieties: How much is your house really worth -- what if you set the price too high or too low? Are you willing to pay a 5-6% commission for an agent 's help? Should you repaint or remodel before putting the house on the market?
This article will look at the home-selling process step-by-step, and provide links to other sources of information.
Step One: Decide How the Local Market Will Affect Your Sale
Hot or cold? A "hot" market is one in which there are more buyers than sellers, so the buyers are competing with each other and driving up prices. A "cold" market is one with more sellers than buyers, so the buyers can be choosy and bid low. The hotter the market, the more aggressively you can price your house.
Do some research. Simply chatting with your neighbors can teach you a fair amount about the heat of the local market. Also, read your local newspaper's real estate section and talk to real estate agents you meet at open houses.
Step Two: Use Comparable Houses to Set Your List Price
What is a "comp"? The best source of pricing information comes from houses directly comparable to your own. In the real estate industry, a "comparable," or "comp," is a house with similar features, preferably located near yours. When identifying comps, look for houses with the same number of bedrooms, bathrooms, and other amenities.
Check current listings. To get comps, visit open houses, read classified ads (in print and online), and check out websites containing real estate listings. Websites that publish the Multiple Listing Service (MLS) are particularly helpful, such as www.realtor.com, by the National Association of Realtors (NAR).
Review actual selling prices. Of course, list prices don’t tell you how much houses ultimately sell for -- that's the comparable data you really need. In a hot market, houses might go for well over list price, and vice versa. Do some research at websites that collect this data, such as http://realestate.yahoo.com/re/homevalues or www.domania.com. This information will also help you decide which of the incoming purchase offers are realistic.
Do your own homework. Don't wait for your real estate agent, if you work with one, to put a dollar figure on how much your house is worth. For one thing, less scrupulous agents may inflate their estimates to capture your business. More important, you want to be educated about your house’s real value so you can work intelligently with your agent and make rational decisions when negotiating with buyers.
Step 3: Assemble Your Team of Professionals
Most sellers prefer to work with a real estate agent or a lawyer at some point in the process. (In fact, in a handful of U.S. states, a lawyer must help finalize the sale.) Real estate agents usually charge a commission -- usually about 5-6% -- to be split between your agent and the buyer's agent, if any. Lawyers normally charge by the hour, around $200 per.
Despite the costs, experienced, responsible professionals can ultimately save you time, money, and aggravation. Unfortunately, there are plenty of incompetent or unethical ones out there, too. Take the time to get referrals from friends, and meet with a few prospects before you hire anyone.
Or, if you're organized, good with finance and legal issues, and have some time to spare, you can sell the house on your own, and save the commission. For more on whether and how to get outside help, see Do You Need a Real Estate Agent to Sell Your House?
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