What’s the process of selling a house? What are the exact steps? What can I expect?

Sound familiar?

If you’re like most people selling a home, you have a million questions.

And you want the best answers. 

Well, you’ve come to the right place.

This guide will break down the entire home selling process step-by-step. 

But here’s the thing…

You need to know more than just the steps in the selling process.

You need to know why each step is important. 

Because when you do, you maximize your chances of making the most money and having an easier home sale. 

And that’s what I want to share with you.

So buckle up.

We’re going to cover everything from start to finish about selling a house. 

How to sell your house in 9 key steps

Selling a house can seem overwhelming and confusing.

Some sellers procrastinate and end up having a devastating experience.

The reason?

They don’t have a plan.

But it’s not their fault.

They’re never told what to expect – so they start the process without understanding how it works.

This is what you want to avoid.

And that’s what this home selling guide is going to help you do.

Follow these 9 steps to learn how to sell your house the right way so that you can avoid a disaster.

STEP 1: Estimate how much you can make from selling

Many sellers skip this step. 

But you shouldn’t. 

Why?

Because you’re going to have to make decisions on certain things throughout the process.

And some of these things will affect how much you’ll make. 

Estimating your potential proceeds up front will help make these decisions a bit easier. 

Plus, it will help prevent any last-minute surprises. 

The formula to figure this out is simple:

Selling price – mortgage balance & costs = proceeds.

Start with your selling price

Have a pretty good idea of your home’s estimated value?

If so, you can just use this number for now.

You can also use an online estimate but it’s not the best approach.

These sites know the basic characteristics of your home such as the number of bedrooms and bathrooms, lot size, square footage, etc. — but they don’t know your condition, layout, and location on the street. 

And more importantly, they don’t compare your property to recently sold homes that are most similar to yours.

Keep in mind that you’re only using the estimated value to help you quickly find what you might make from selling your house. 

Don’t use this number as your asking price or a set-in-stone number for what your home may sell for. 

Get a market analysis from a real estate agent

The most accurate way to get your potential selling price is to get a comparative market analysis from an experienced real estate agent. 

This analysis is a similar approach to what an appraiser uses, but it factors in buyer desirability. 

Your home is compared to similar properties that have sold and value adjustments are included for the differences in features and characteristics.

The best real estate agents are very good at these. 

But many of them aren’t, either because they don’t have the expertise or they intentionally give you an inaccurate analysis. 

There’s a tactic behind this that can dramatically hurt the sale of your house.

I’ll tell you what this is and how you can avoid it in an upcoming step.

Now that you have a rough estimate of your potential selling price, the next step is to estimate your costs. 

Find out how much it’s going to cost to sell your house

The costs when selling your house are often referred to as “closing costs.”

These consist of several items.

The biggest one is going to be real estate commissions. 

When you sell your property, you’ll pay the commission to your realtor as well as the buyer’s realtor.

The average total commission to sell a house is somewhere between 5 and 6%. 

Commissions are negotiable, and the average depends on your area and the type of realtor you’re hiring (more on this in a bit). 

In addition to the commissions, there are other items bundled into the closing costs. 

These include escrow and title fees, transfer taxes, and miscellaneous fees. 

You can use our home sale calculator to get an idea of what these might be. 

These costs can vary depending on which state, county, and city you live in. 

Get an estimated net sheet from your real estate agent

If you use a real estate agent to sell your home, you can ask them for an estimated net sheet. 

An estimated net sheet shows you a breakdown of your costs specific to your property (based on your realtor’s estimated value).

Your realtor gets this from the escrow company and can provide this to you up front.

Here’s what it looks like:

 

Estimate of costs to sell a house

 

Confirm this with your tax person, but generally, all of your closing costs are tax deductible. 

Calculate your proceeds

Take your estimated value and subtract your mortgage balance as well as your estimated costs. 

You’ll also want to find out if you’ll have to pay capital gains taxes

This is especially important if you plan on purchasing a new home after you sell your current property. 

While knowing your exact proceeds is impossible to know up front, using this approach to get an estimate will get you in the ballpark. 

Now that you have a rough idea about how much you’ll make when selling your house, the next step in the process is to time your sale to help you sell for a higher price.

Step 2: Determine the best time to sell

Listing your home for sale at the right time can make a huge difference. 

The best time?

When supply is low and demand is high. 

Real estate prices are controlled by supply and demand. 

Supply is the number of homes for sale, and demand is the number of buyers. 

A real estate market where there are more buyers than there are homes for sale is known as a “seller’s market.” 

This is the type of market where you see homes selling quickly, and in many cases, with multiple offers over the asking price. 

The opposite of this is known as a “buyer’s market.” And somewhere in the middle is known as a “neutral market.”

Get an inventory analysis from a real estate agent

You can get an analysis from a real estate agent that compares the current inventory (number of properties for sale) to the previous month.

This will give you insight into how many houses are currently for sale in your area and how fast they’re selling. 

The key number in this analysis is “months of supply.” 

This is the number of months it would take to run out of homes for sale.

You calculate this data point by taking the number of homes for sale in any given area and dividing it by the number of houses sold in the last month. 

For example, let’s say there are 500 homes currently on the market and 100 properties have sold over the last month. 

Dividing 500 by 100 gives you 5 months of supply.

Typically, anything under ~6 months is a seller’s market, and anything over that is a buyer’s market. 

You can also reverse the calculation to figure out the absorption rate.

An absorption rate in real estate is another way to determine the type of market you’re in.

Using the scenario above, dividing 10o homes for sale over the last month by 500 that are currently on the market would give you an absorption rate of 20%.  

Usually, 20% and above is considered a seller’s market, and ~15% and below is a buyer’s market.

Use data to help you determine when to sell your home

The real estate market can change on a weekly basis. 

So keeping an eye on the absorption rate or months of supply can help you sell for more money.

Seasonality can play a factor in both of these.  

A hot-weather spot like Florida enjoys the benefits of a snowbird effect in which cold-weather residents swarm the region in winter looking to relocate. 

On the other hand, a place like Colorado, with its cold and snowy climate, can experience a drop in demand from home buyers.

And places like Silicon Valley or Los Angeles can see minimal impact from seasonality. 

No matter the area, many sellers assume that spring is the best time to put their house on the market. 

While this can be true, in many cases, it’s not. 

Yes, in many markets, more buyers can pop up in the springtime.

But there are also usually more homes for sale.

This is why using data to help you determine the best time to sell your house is key.

STEP 3: Decide how you want to sell your house

At this point, you have a pretty good idea of how much you might make and when you might want to sell.

The next step in the process is to decide how you want to sell your house.

You have options:

  1. Find a cash buyer.
  2. Do it yourself.
  3. Sell with a realtor.

It’s important you understand the pros and cons of each. 

Let’s break these down. 

Sell your home to a cash buyer

This is what every home seller wants.

But, as with most things in life, if something sounds too good to be true, it usually is. 

And selling a house for cash is no exception. 

The catch with this is that you’re almost always selling well below market value. 

The three most common types of cash buyers include the following:

  • Instant buyer (also known as “iBuyer”)
  • Fix and flip investor
  • Buy and hold investor

Sell to an iBuyer

Commonly referred to as iBuyers, instant cash buyers are companies that will purchase your home for cash. 

They’re relatively new; almost all of them have popped up within the last 10 years or so. 

Two of the biggest names are OpenDoor and Zillow. 

These companies will make you an instant offer but leave some of the important details out until later in the process. 

Here’s how it usually works:

  1. You get an instant cash offer for your home.
  2. They go over the details and costs with you.
  3. You accept their offer.
  4. They inspect your property.
  5. You get an updated offer (lower to reflect improvements).

The initial offer amount is almost always below market value (they need to minimize risk and make a profit). 

The costs that are factored in include closing costs, commissions that you would have paid to a real estate agent, and a “convenience fee.” 

If you accept their offer, you agree to have someone view the property in person. This is where a lot of them will make an additional profit. 

In many cases, they’ll tell you that certain repairs need to be made and will subtract the costs (their estimate) from the amount you think you’re netting. 

How much can I make selling my house to an iBuyer?

The difference in how much you net from an iBuyer versus selling your house on the open market can be quite drastic. 

Think 8-15% (not including commissions and closing costs). 

Only a small percentage of home sellers who request an instant offer from one of these companies ends up selling to them. 

iBuyers know this and use the “instant offer” tactic as a “hook” to get your information and sell it to realtors in your area

There are also matching sites that will connect you to iBuyers. 

They get a fee for doing so, and that fee is factored into your offer price.

They also use the “instant cash offer” as the “hook” so that they can sell your information to realtors

You’re better off going to the iBuyer directly, not to a site that makes the connection. 

Sell to a fix and flip investor

Have you seen a sign while driving that says something like, “I’ll buy your house for cash?” 

Or maybe you’ve received a postcard that says something similar.

These are usually “fix and flip” real estate investors.

These types of investors are usually looking to buy a house that needs work. 

Their profit margins are usually in the 10-20% range. This is after factoring in the costs of selling the home and the amount of money that needs to go into it. 

When you do the math, these types of buyers are looking to purchase properties for way under market value. 

Usually, they strike deals in desperate situations or with homeowners who are unaware of the real value of their home. 

Sell to a buy and hold investor

These types of real estate investors are the opposite of the fix and flip. 

They’re looking to buy your home and keep it as a rental property for a long period of time. 

Many buy and hold investors are looking to buy a home in average to good condition, but are almost always looking for a “discount.” 

Most of them will use a real estate agent and are looking in areas they think have great potential for growth. 

What are the benefits of selling a house for cash?

The main benefit is a quick home sale. 

In many cases, these types of buyers can close the transaction in just one to three weeks. 

Which means you’ll eliminate many steps of the selling process.

You don’t need to worry about showings, inspections, and having your house sit on the market. 

Need to sell fast and don’t mind sacrificing tens of thousands of dollars for the sake of convenience?

Then you may want to think about selling your house to one of these cash buyers.

Sell your home by yourself

Let’s start with the number one reason why homeowners decide to manage the entire process themselves: to save on commission.

Selling your home yourself can save you thousands by not having to pay the commission to your realtor.

But it will most likely cost you much more than you’ll “save.” 

If you decide to go this route, you can cut your commission costs in half. 

You’ll be able to skip the amount you would have paid to your real estate agent.

But it would be in your best interest to still pay the buyer’s agent. 

Saving money is the biggest benefit when selling your own home; however, you need to consider the potential negatives.

The biggest one?

Time. 

There are many steps involved in the home selling process.

And time is the price you’ll pay for not having to pay your realtor’s commission. 

But that’s just the start. 

You’ll need to factor in the required paperwork when selling a home, making sure you price it right, marketing, negotiating, and much more. 

All of these are crucial steps in the process and a few reasons why choosing the right real estate agent to sell your house can make you much more than you’d save. 

Is it worth selling your house yourself?

In my opinion, the answer has a lot to do with your availability, personality, and how savvy you are.

Do you have extra time? How well do you handle stress?

Are you comfortable setting the best asking price?

Do you know how to market a home (not just put it on the MLS and Zillow)?

How well do you negotiate? Do you know what to say and when to say it to squeeze more out of the buyer?

Do you know the requirements for the numerous disclosures that are required to sell a property?

If you can honestly answer all of these with a yes, then save the money and sell your house yourself. 

If not, you’re risking thousands of dollars and a boatload of stress.

And you may want to consider the next option.

Sell your house with a real estate agent

If you go this route, you can pretty much skip everything I just mentioned above. 

This is your real estate agent’s job. 

Your job is to make sure you choose the right agent. 

How do you do this?

You need to ask them the right questions, and you need to get the right answers. 

Because reviews can be fake and manipulated (e.g. Yelp and Zillow).

And just because a realtor was referred to you (or someone you worked with in the past) doesn’t mean they’re going to put your interests before theirs. 

There are plenty of great realtors out there. 

Unfortunately, there are a lot of bad ones too. 

There’s one main reason for this: the contract you’ll sign with them. 

Let me explain.

Don’t be forced into a contract when selling with a realtor

When you sell a house with a real estate agent, you sign a contract with them.

This contract is often referred to as a “listing agreement.”

And in almost all cases, it’s an exclusive agreement. 

This means that you’re bound to your agent for the duration of the contract, whether you’re pleased with their services or not. 

This also means that they know they will be paid a commission as long as your house sells. 

As you can imagine, this isn’t in your favor. 

Many real estate agents will overpromise when meeting with you so that you sign this agreement. 

This can be anything from intentionally telling you they can sell your house for an inflated price (more on this shortly) to an exaggerated marketing plan that they never plan on implementing.

These tactics are often the reason why a house will sit on the market and sell for less than it should.

How to not get stuck into a contract with a realtor

Want to increase your chances of selling with a realtor you can trust?

Then here’s what you should do.

Ask them if they’ll add a clause in the agreement that will allow you to cancel at any time. No questions asked.

Anything other than a “yes” should be an immediate red flag, and you should seriously think about not working with them.

It should look something like this:

 

Cancelation clause added in a contract when selling a house with a realtor

When you’re not forced into a contract, your ability to trust your realtor skyrockets. 

Why?

Because they know that there’s a possibility they might lose your business. 

When you don’t have the option to cancel, they have a sense of security that they’ll still get paid. 

In many cases, you’re looked at as another “number” while they try to get the next home seller to sign an agreement.

Although, let me say this. 

Most realtors strive for excellent service. 

And many of them accomplish this.

Don’t sell with the wrong person

The forced contract is the root cause of why many people have a bad experience when selling a house.

And the root cause for the tactics that you’re not aware of when selling.

Having the option to cancel should be your number one requirement if you decide to sell your house with a real estate agent.

It is for us. 

That’s why SoldNest only matches home sellers with real estate agents who allow the listing agreement to be canceled at any time.

We analyze sales data to find the best agents who can be trusted.

If an agent has a track record that meets our stringent criteria, then we interview them.

And the first question we ask is whether they allow the agreement to be canceled. 

Anything other than a no is a deal-breaker for us.

And it should be for you too.

Asking if you’ll have the option to cancel is only one of several crucial questions you should ask when interviewing realtors to sell your house

But you’ll need to do more than just ask the right questions.

You need to get the right answers and make sure you have a “good feeling” about them.

You’ll boost your chances of selling your house with a realtor who will treat your home sale like it’s their own. 

And if you want to sell for the best price and make the process easier, you’re going to need this person. 

When you think you’ve found the right realtor, the first step to working with them is signing the agreement. 

Here are a few other things you need to know before doing that:

The type of listing agreement you’ll sign with your realtor

The most common type of listing agreement is the one that is exclusive to you and your real estate agent. 

This is called an exclusive right to sell. 

It gives your agent the right to list your home on the multiple listing service (MLS), take photos, market your home, and receive a commission if your home sells before the expiration date listed in the agreement. 

The other two agreements are called open agency and exclusive agency. 

An open agency agreement is the opposite of an exclusive agreement. It allows sellers to hire more than one brokerage at a time (most realtors will not agree to this).

With an exclusive agency agreement, the seller can try to sell the house themselves while working with only one realtor. 

If the seller finds a buyer and sells it themselves, then the realtor is not due a commission.

A listing price that doesn’t feel right

This occurs way more than it should. 

But most sellers don’t say anything. 

Or they don’t know the tactic that’s being used on them.

Here’s how it usually plays out:

  1. The agent suggests a list price that is higher than market value.
  2. You sign the agreement.
  3. Your home sits on the market.
  4. Buyers wonder what’s wrong with your house.
  5. Your agent suggests reducing the price, so you do.
  6. You sell for much less than you should have.

Why does this happen?

Because the real estate agent is hoping that the “more money” sales pitch will get the seller to sign the agreement when initially meeting with them.

The agent knows that the price is inflated from the get-go and that the house is going to sit. 

But all they care about is getting that agreement signed. 

Why?

Because they get a commission no matter how long your home sits on the market. 

You’d be surprised at how many “top” agents use this tactic. 

Their entire business model is based on the “turn and burn” approach.

Do anything they can to get the agreement signed, move on to the next homeowner, and keep marketing themselves as a “top agent.” 

This is one of many reasons why it’s important that you have the option to cancel. 

Your realtor will be much more inclined to recommend the best listing price.

Which means your home will be less likely to sit on the market. 

And your chances of selling for more money will be much higher. 

But it can work the other way too.

Don’t set the listing price too low

Some selling agents will want to drastically underprice your home.

The pitch for this usually has something to do with “getting lots of buyers interested to drive up the price.” 

While this is true, there’s an ulterior motive behind this.

So that they can use your home sale to market themselves with something like, “Just sold for $50k over asking!”

You’re happy because you sold way over your asking price. 

But there’s a chance that you could have sold for more. 

A home is worth what someone is willing to pay for it, but there’s a psychological factor that’s involved with buyers.

Some of them don’t want to feel like they’re overpaying.

So they won’t offer a certain percentage over your asking price. 

This means there’s a chance that you won’t sell your house for its full potential.

But your realtor will look like a hero. 

So if you think the price they’re recommending might be off, then dig deeper.

Why are they suggesting that price? Which comps are they using to justify it?

And if you have a gut feeling that the price is off and they’re not doing a great job justifying it, then consider it a red flag. 

The asking price is listed in the agreement.

But this is not set in stone. 

You and your agent will confirm the price before listing your home for sale (one of the upcoming steps we’ll discuss). 

Be aware of the commission being paid to both realtors

When you sell a house, you pay the commission to both your real estate agent and the buyer’s agent.

The way that the listing agreement states how the commissions are paid can be a little confusing, so here’s a simple explanation. 

The total commission you’ll pay goes to your real estate agent’s brokerage (the company your agent works for). 

And your agent will state in the agreement how much of that is being offered to the buyer’s agent. 

This is what you want to watch out for. 

The norm is that this is split 50/50. 

Half to your realtor and the other half to the buyer’s realtor. 

But some agents will try to sneak this past you and offer less to the buyer’s agent, leaving more for them. 

When this happens, buyer’s agents will be less inclined to show your home because you’re paying them less than other sellers in your area.

Here’s an example of what this would look like:

 

Commission in real estate agents listing contract

The key takeaway here is that you want to be aware of how much commission is being offered to the buyer’s real estate agent. 

A longer-than-usual expiration date in the agreement

The listing agreement has an expiration date. 

If your home doesn’t sell by this date, then the agreement with your realtor is automatically terminated. 

The expiration date should line up with your realtor’s estimated selling timeline.

For example, if your realtor is estimating that the time to sell your house from start to finish is 3 months, then an agreement with anything longer than, say, 4 months, might be a bit concerning.

But if you have the option to cancel, then the timeframe shouldn’t really be an issue for you. 

You could have it for a year, and it still shouldn’t be a concern. 

But it should be a concern when you don’t have the option to cancel.

This is when you’ll want to make sure that the length of the agreement doesn’t extend too far past their estimated timeline of selling your home. 

If it does, then consider it a red flag. 

Choose the right realtor to sell your home

The right real estate agent is worth their weight in gold. 

That might sound like an exaggeration, but it’s true. 

Selling a house is stressful and the process can be confusing.

It is most likely the largest financial transaction in your life. 

You need someone who is going to make you a top priority. 

And someone who will sell your house as if it’s their own.

This is how you’ll maximize your chances of having an easier sale and making more money. 

Follow these steps to help you choose the right realtor:

  1. Ask the right questions.
  2. Get the right answers.
  3. Understand your listing agreement.
  4. Make sure you have the option to cancel.
  5. Go with your gut to make sure there’s a connection.

You might be tempted to skip some of these. 

Especially if you’re referred to an agent from a friend or go online and see a bunch of five-star reviews. 

But don’t. 

The steps above will prevent you from selling with the wrong person. 

And they will help you find the right realtor who you can rely on throughout the process. 

Here are just a few things they’ll be doing for you (more on these in the next steps):

  • Provide an analysis to help you price your home right
  • Help you prepare to get top dollar 
  • Marketing (telling the world that your house is for sale)
  • Handling disclosures, inspections, and other paperwork
  • Scheduling and coordinating showings
  • Negotiating 
  • Walking you through the offer process
  • Vetting prospective buyers
  • Making sure the deal closes

All of these can have a big impact on how much you sell for and how long the process takes. 

So make sure you’re selling with someone you trust.

Step 4: Prepare your home for sale

Now that you’ve found the right real estate agent, it’s time to get ready.

If done right, this step is where you really boost your chances of selling for more money.

And in less time. 

But in order to give yourself the best shot, you’ll need to start the prepping process with something important.

Remove your emotional attachment. 

Think of selling your house as a business transaction. 

Because that’s what it is.

The goal is to sell for the highest price.

And in the shortest amount of time. 

You do this by appealing to the largest possible audience of prospective buyers.  

This sometimes means you might need to remove your personal preferences from parts of the decision-making process. 

But this can be tough to do.

Especially if you’ve lived in your home for a number of years and have raised your family there. 

Think of selling as the launching pad to the next step in life’s journey. 

Leave parts of the decision-making process to your real estate agent and other experts. 

If you do, you’ll appeal to a larger pool of buyers. 

Which can bring you an offer at a higher price than you were anticipating.

Let’s show you how to do that by going through the prepping process step by step.

Declutter and maximize your space

Buyers need to envision themselves living in your house.

This is what starts the emotional upswing for them.

An emotional upswing is what you want. 

It helps sell a house. 

Too much clutter and a bad use of space will have buyers asking themselves numerous questions. 

You don’t want this.

You want buyers viewing your house with minimal questions.

And decluttering is where this all starts.

It’s difficult to put a price tag on this, but it’s a biggie. 

Why?

Space. 

Buyers love it.

You want to maximize your space as much as you can. 

Start by getting garbage bags and boxes.

Go room by room and make several piles:

  • Trash
  • Sell
  • Keep
  • Donate

Stay focused and finish one room before moving to the next.

Do you plan on living in your property while it’s for sale?

If so, anything you keep can be stored in the garage. 

This is common and many buyers expect it. 

Have a basement?

I probably wouldn’t keep anything down there as a basement can be a selling feature. 

Have anything worth selling?

Think about having a garage sale.

Donating?

The Salvation Army can save you hassle by picking up the items for you.

Go through every room, and don’t forget the closets. 

You probably have more stuff than you think.

So start this process early and don’t procrastinate. 

Boost your selling price with money-making improvements

Many sellers are hesitant about making improvements because they think that the buyer will want to do them. 

Yes, some do. 

But some don’t because they don’t have the extra money.

Or they don’t want to invest the time.

This is one of the reasons why certain improvements can make you money when selling your house.

You make the improvements, and prospective buyers will factor them into their offer price.

And in some cases, the added value far exceeds the amount you paid.

Why?

Because home buyers are essentially financing the improvements through their mortgage. 

They’re willing to pay you more money because the home is in better condition and it saves them the hassle of having to do the work.

But not all improvements are worth making. 

The ones that pay off are the ones that have the biggest visual impact at a lower cost compared to the others.

The kitchen and bathrooms are always a biggie for buyers. 

But they’re also the most expensive. 

So, in some cases, doing a complete makeover for either of these rooms doesn’t make sense. 

The four upgrades that will usually make the most money when selling a house are:

  1. Flooring
  2. Stainless steel appliances
  3. Front yard landscaping
  4. Paint

Tip#1 – Update your flooring

Have carpet in your home?

Then there’s a strong likelihood that replacing it will pay off.

Many buyers prefer laminate or hardwood flooring over carpet. 

It’s easier to clean and appears more modern. 

If you already have laminate or hardwood flooring, then you probably don’t need to replace it.

But you may want to have it cleaned. 

You can use a cleaning solution like Rejuvenate to bring them back to life. 

You can find it at Home Depot for ~$6 per bottle

If you have hardwood floors and this doesn’t do the trick, then you might want to think about having them refinished. 

Have carpets but don’t want to go through the hassle of having them replaced?

Then having them cleaned instead could make the prepping process easier for you.

You can rent a professional-grade cleaner from somewhere like Lowe’s and do it yourself. 

Tip #2 – Replace your appliances

Replacing older appliances with stainless steel ones makes sense if your kitchen is at least in decent condition. 

White and black appliances were appealing 15+ years ago. 

But now, buyers like stainless steel. 

They can make your kitchen really pop. 

And not just in person, but in the online photos too. 

If you do replace your appliances before putting your house on the market, don’t buy anything expensive. 

The whole purpose of making this upgrade is for the visual impact.

So look for something cheap to medium-priced. 

Tip #3 – Improve your curb appeal

Remember how we talked about the emotional upswing for buyers?

And how that should be your goal?

Well, your curb appeal is where it all starts. 

When prospective buyers pull up to your house, they’re going to have an opinion. 

And quick. 

So you want to make a great first impression. 

You can do this by adding color and spending a day on a few DIY projects.

Here is a list of things that can enhance your curb appeal when selling:

  • Pressure wash the entire exterior.
  • Pull weeds.
  • Add mulch to dirt areas.
  • Paint your front door.
  • Knock down cobwebs (especially by your front door).
  • Add colorful plants or flowers. 

Are parts of your lawn discolored?

Don’t get new sod. 

Instead, go to Amazon and purchase a bottle of LawnLift

Then spray paint those areas and have your grass look like new. 

Tip #4 – Paint every room with a neutral color

Has it been more than ~10 years since the entire interior of your home has been painted?

Then you may want to think about having it done before listing it for sale.

But make sure you get your real estate agent’s opinion first.

If you hire a professional, you can expect to pay anywhere from $2-$6 per square foot

Neutral colors are key. 

They appeal to a larger audience, and they can make your rooms appear bigger. 

Two paint colors that work well in many homes are Wise Owl and San Francisco Fog. 

You can find these at Kelly Moore

At a minimum, you’ll want to go room by room and apply touch-up.

If you do, look for the spots that you don’t always notice.

These include things like door jams, baseboards, and crown molding.

Get inspections before listing your home

Having inspections completed before selling your house could be one of the best investments you make. 

There are two reasons why:

  1. Buyers will feel more confident when submitting their offer.
  2. It reduces the chances of the buyer asking you to repair something after you accept their offer.

When a prospective buyer is interested in your home, they’re going to want more information. 

Your home can be in great condition, but they don’t know what’s “under the hood.”

Inspections can help alleviate these concerns.

In some parts of the country, many sellers don’t do inspections before listing their house. 

They leave them up to the buyer. 

You could do this too.

But you’ll give the buyer more leverage after you’re under contract. 

You’ll take this leverage away if you get inspections before putting your house on the market.

Why?

Because it’s much more difficult for a buyer to say they weren’t aware of something when they were given the inspection reports up front.

This means that you reduce the chances of them asking you to make repairs after you accept their offer. 

And you’ll also reduce your chances of having them back out of the sale. 

Can a buyer still do their own inspections if you provide them up front?

Yes. 

But many of them don’t. 

Even if they did, in order to justify asking you to make repairs, their inspector would need to find something that your inspector didn’t.

Which inspections should I have done before selling?

These are the three most common inspections when selling a single-family residence:

  • Property
  • Termite
  • Roof

A roof inspection is almost never needed for condos and townhomes as the roof is the HOA’s responsibility. 

The cost for each will depend on the size of your property and where it’s located. 

On average, you can expect to pay somewhere between $600 and $1,500 for all three inspections. 

Ask your real estate agent for recommendations. Most of them have contacts and will coordinate for you. 

And it’s okay to make repairs before you order inspections.

But don’t spend too much time on this.

This is a mistake that many people make when selling a house. 

Instead, wait for the inspection reports to come back, and then take care of any repairs that are worth making.

It will save you time and money.

The inspectors will need access to the attic, crawlspace, water heater, and garage walls. 

So before they visit your property, make sure these are easily accessible. 

And be prepared to see numerous items mentioned in the inspection reports. 

They do this for liability reasons.

But don’t worry…

Unless your property is newly built, this is very common and expected by buyers and their realtors. 

And this doesn’t mean that you need to fix everything.

The whole purpose of getting inspections before listing your house for sale is to provide potential buyers with the information they need to make their best offer.

Make repairs (but keep them minimal) before selling your home

Now that you have inspections completed, the next step in the prepping process is to make repairs.

Do you need to fix everything that is called out in the inspection reports?

Nope.

All of it is optional and negotiable.

Of course, the more items you fix, the more attractive your home will look to prospective buyers.

But not everything is worth fixing.

Go over the reports with your real estate agent and get their advice about which repairs are worth making.

Need help or don’t have the time to do the work yourself? Speed up the process and contact a service professional on one of these websites:

HomeAdvisor

Porch

Thumbtack

Make a list of the items you fix and give them to your realtor. 

They can attach this list to the inspection reports so that buyers are aware of the work you’ve done

Doing this will show prospective buyers that they don’t need to spend the time and money fixing certain things. 

This makes them happy.

And happy buyers help sell a house for more money and in a shorter amount of time.

Get a deep cleaning and make your house shine

There are places in your home that you haven’t noticed in years.

But buyers will.

Anything that’s dirty might make them think that your house hasn’t been well taken care of. 

So getting a deep clean is almost always a must.

Hiring a professional will save you time and the hassle of having to do it yourself. 

The cost will depend on your area and the size of your home, but you can expect to pay somewhere between $200 and $600.

Or you can take the DIY approach. 

If you do, here’s a list of what you’ll want to make sure you clean:

  • Walls
  • Baseboards
  • Floors
  • Showers
  • Sinks
  • Toilets
  • Grout 
  • Vanity doors and handles
  • Appliances (including inside of oven)
  • Countertops
  • Cabinets (including inside shelving)
  • Windows (inside and outside)
  • Window coverings
  • Vents (and replace filters)

Transform your space by staging your home

You’re in the final steps of getting your house ready to sell

But you need one final touch. 

Staging.

You need buyers to envision themselves living in your home.

Because if they can’t, their chances of submitting an offer deteriorate. 

This is why staging pays off when selling a house.

And if done right, it maximizes your space, making your home look bigger than it really is.

But staging also does something else. 

It helps with the emotional impact on prospective buyers. 

Not just when they view your home in person. 

But also when they see your listing online.

Let me show you.

Look at this house:

Selling a house without staging

 

Now look at this one:

 

Staging in a vacant home for sale

 

Pretty big difference, right?

Both of those homes were vacant.

You shouldn’t think twice about staging if your property is going to be vacant when selling.

Online photos of a vacant home make a bad first impression.

And a bad first impression can easily convince buyers your home isn’t worth visiting. 

Staging your house while it’s occupied

You can still stage your home if you plan on living in it when selling.

You have two options:

  • Get partial staging
  • Stage it yourself

Partial staging

There are stagers who can work with your furniture. 

In most cases, they’ll use a combination of what you have and their own decorative pieces.

Be prepared as they might make suggestions that you don’t agree with.

But remember, selling your house is a business transaction.

So let them do their job.

Ask your realtor for recommendations.

Most of them have at least one stager they work with and can help coordinate.

Stage it yourself

The other option is to stage it yourself. 

It might not look as good as it would with partial staging, but you’ll save on costs.

The key to staging your own home is to put yourself in the shoes of the buyer. 

Think about how you can appeal to as many potential buyers as possible. 

And how you can maximize your space. 

This means removing the family photos and anything else that’s personal and easily visible.

Go room by room and see if there is any other furniture that can be removed.

Reclining chair in the living room that doesn’t need to be there?

Remove it.

Extra nightstand or dresser in one of the bedrooms?

Put it in the garage and make the bedroom appear larger. 

Remember, you’re selling a house. 

Which is the largest financial transaction in most buyers’ lives.

They’re going to have some doubt.

You want to minimize (or eliminate) their doubt. 

Staging helps with this.

Take professional photos

All right, now your house is “show-ready.” 

But you need to convince prospective buyers that they should take a look.

This is why you need professional photos.

Let me repeat one word in that sentence. 

Professional.

Do not take these photos yourself, and do not let your realtor take them.

Most realtors will hire a professional photographer and cover the cost.

But some won’t.

When this happens, it can be damaging. 

The difference between a professional photographer and an amateur is night and day. 

Even for a home that is upgraded.

Want proof?

 

Photo you shouldn't take when selling a home

 

Forgot the mess.

Look at the angle and lighting. 

It’s terrible. 

Here’s another one.

 

Photo of a house for sale with bad lighting

 

That house was recently renovated too. 

According to the National Association of Realtors, 90% of home buyers search online

Which means your photos (and price) will be the first thing home buyers see. 

A great photographer can make your home look better than it really is.

Photos like the ones above can do the complete opposite. 

How to get ready for photos

You can expect your real estate agent to coordinate the photo shoot. 

Here’s what you’ll want to do to prepare:

  • Make sure your house is clean.
  • Turn on all lights.
  • Open all window coverings.

Show as much light as you can.

Buyers love it.

You should also expect your realtor to tell the photographer to not show any negative property characteristics or features.

Some of these might include things such as high voltage lines, a really small stall shower, or maybe a backyard that needs work. 

Even if your photos are great, these can turn prospective buyers away. 

The entire purpose of taking photos when selling a house is to entice buyers to visit in person. 

So they need to be eye-popping. 

Without showing anything that gives them a reason to not visit.

Fill in your selling disclosures

There’s a lot of paperwork involved when selling a house.

But don’t worry — your real estate agent will handle this for you and guide you through the process.

Some of this paperwork is commonly referred to as “disclosures” or “disclosure documents.” 

Many of these are template-based and only require signatures from the seller and buyer, but several will give you a list of questions that you’ll need to answer.

Here are a few examples of what you’ll be required to disclose:

  • Water damage
  • Neighborhood noise 
  • Environmental contamination
  • Potential risk from natural disaster
  • Repairs
  • Death in the property
  • HOA information

Here’s an example of what one of these disclosures looks like:

 

Disclosure for selling a house

 

These are meant to give prospective buyers information about the property that could have a potential negative effect. 

The exact legalities will depend on where you live, but here’s the key takeaway:

Do not conceal any information that you think might impact the value in a negative way

Doing so can mean a future lawsuit from your buyer. 

So fill these out as best you can and remember that it’s always better to over-disclose. 

Open escrow

An escrow company is a neutral third party between the buyer and seller. 

They’re responsible for:

  • Making sure that the seller doesn’t receive their proceeds until all of the conditions in the purchase contract are met
  • Ensuring the buyer doesn’t receive the deed to the property until those same conditions are met
  • Handling the funds between the buyer and seller

Someone will need to contact an escrow company to start the process. 

In some areas, the seller opens escrow, and in others, the buyer does. 

Most of the time, one of the real estate agents will do this. 

If you live in an area where it’s common for the seller to open escrow, you can expect your realtor to do this. 

This is what will start the escrow process. 

Step 5: Set the best listing price

You’re almost ready to put your house on the market!

But there’s one key step before you do: Set the best list price.

Notice how I said, “list price” and not “selling price?”

That’s because the list price does not mean your selling price.

This seems obvious, but many sellers get too hung up on this. 

They think that the price they “ask” for is the maximum amount a buyer will pay. 

Maybe it is. 

And maybe it’s not. 

Your house is worth what a buyer is willing to pay for it.

The “asking price” should be used as part of your marketing strategy to attract the most buyers AND maximize your selling price. 

If you’re working with the right real estate agent, this is exactly what they’re going to help you do.

How to set the best listing price

You’ve already discussed the list price with your agent before you signed the agreement with them.

But now it’s time to revisit.

The real estate market can change on a weekly basis. 

So checking recent market activity is crucial. 

Get an updated analysis from your realtor and ask them to include the following:

  1. Recently sold homes
  2. Properties that are currently for sale
  3. Listings that are currently pending (seller accepted an offer, but the sale hasn’t closed yet)

Buyers will put more weight on the houses that have sold.

So you should do the same.  

The properties that are pending are good to look at because they’ll give you insight into how long it took for the seller to accept an offer. 

And the ones that are currently on the market will be your competition. 

As we discussed in an earlier step, the homes that you should compare yours to are the ones that are: 

  • Closest to your interior square footage
  • Most recently sold
  • Closest in proximity

Finding at least three recently sold homes that fit these criteria is ideal. 

Make sure that the “value adjustments” are included

This is important.

Value adjustments are dollar amounts for key differences between your home and the ones you’re comparing to. 

Some of these differences include the following:

  • Interior square footage
  • Lot size
  • Bedrooms
  • Bathrooms
  • Condition
  • Layout
  • Street noise
  • Schools

The dollar amount for each adjustment will depend on the sold price of the comparable home. 

The best approach is to take the comparable price of each home and divide it by the number of homes to get an average. 

For example, if the comparable prices for the three homes in the analysis are:

  • $1,100,000
  • $1,060,000
  • $1,020,000

Then you would use $1,060,000.

Determine the perfect number

The last thing you’ll want to do is determine the actual number to use for your list price. 

Using numbers that are slightly less than a rounded number is very common, and it works.

For example, in the scenario above, since the average is $1,060,000, setting the list price to $1,049,000 is probably the best strategy. 

The key is to not set your price too high or low. 

An inflated price will discourage buyers from wanting to learn more about your home

However, if you price it too low, you could be leaving money on the table. 

Remember, your house is worth what a buyer is willing to pay for it. 

Finalize the perfect number with your real estate agent, and you’ll maximize your chances of getting a top-dollar offer sooner than you think. 

Step 6: List your house for sale

Now it’s time to sell your house.

And find that perfect buyer. 

This is done through marketing.

There should be one goal when it comes to marketing your house: to tell the world that your house is for sale.

This is how you increase demand.

Which will increase your chances of selling for more money.

You do this by utilizing the right channels to reach your target audience.

A sign in your front yard and postcards to your neighbors aren’t the best ways to do this. 

They can help.

But they’re not nearly as effective as they were 20 years ago. 

Nowadays, buyers search for homes on websites and apps.

So this is where your real estate agent will want to focus their strategy. 

And this strategy should have one goal: Get buyers to visit. 

Upload your listing to the MLS

The “MLS” is a database used by brokerages and agents across the country to list their homes for sale. 

This is the number one marketing tool to sell a house. 

It allows every real estate agent and broker to easily see the listings that are currently on the market in their area.

Your real estate agent will strategize with you on a date to upload your listing to the MLS. 

This is what usually starts the marketing process. 

And your listing doesn’t just go on the MLS.

It gets syndicated out to numerous sites, including all of the major real estate search sites, such as Zillow, Redfin, Trulia, and realtor.com.

This means that you should see your listing plastered online on the day that your home is officially listed. 

Include all property characteristics and features

Make sure your realtor uploads the property characteristics and features to the MLS. 

These are things such as countertops, flooring, heating/AC, exterior features, and more. 

A lot of this optional.

If it’s not added, it won’t show when buyers are viewing your home on a real estate search site.

A lot of realtors do this. 

But for some reason, some of them don’t. 

Buyers will be looking for this information, so make sure it’s there, and make sure it’s accurate.

Utilize social media

There’s an extremely strong chance that the buyer for your home is on social media. 

So marketing your house on one or more of these platforms is key:

  • Facebook
  • Instagram
  • Pinterest
  • LinkedIn

You’ll increase the number of people who know that you’re selling your house.

Real estate agents who are tech-savvy use social media to their advantage. 

They do this by showing your listing to their audience and/or by placing ads on these different platforms.

And here’s the thing with social media…

Content can be easily shared. 

So you’re not just getting exposure to the audience that you’re targeting; you’re making it easy for those people to tell others that you’re selling a home. 

Spread the word through a network of top realtors

Working with the right realtor has many benefits.

And this is one of them.

The agents who consistently sell more homes than their peers have a lot of contacts. 

If your real estate agent falls into this category, then your listing will have access to their network of top agents.

They’ll use this network to further expand the marketing reach of your property. 

One quick side note with this: Many agents who sell a lot of homes will try to also represent the buyer to double their commission. This can be damaging because in many cases, the agent will minimize the marketing and focus on finding a buyer who doesn’t have an agent. When this happens, the house almost always sells for much less than what it should have. If you want to take full advantage of your agent’s network and make the most money, you’ll need to get a commitment that they won’t represent the buyer

Open houses

The chances are low that an open house will be the sole reason why a buyer knows that you’re selling your house. 

They most likely discovered your listing somewhere online and discussed it with their realtor. 

Which is a good thing.

This means your listing piqued their curiosity and your online marketing strategy worked. 

Now it’s time to get them interested in making an offer. 

Open houses give them that opportunity. 

Most open houses are scheduled for two to three hours on Saturday and Sunday. 

A Friday evening twilight open house can also work well.

Your realtor will game plan with you ahead of time so that you have plenty of time to prepare.

On the day of an open house, aim to keep the appearance similar to what it was for the photos.

Clean.

Turn on all the lights.

Open all of your window coverings. 

And remove anything that takes up space. 

Remember, buyers will be viewing your house from a different point of view.

So even the smallest things can make a big difference.

Private showings

Sometimes buyers can’t attend an open house. 

Or they want to view your home before others do. 

These are set up through a private showing.

Your real estate agent will coordinate a plan for this ahead of time. 

If you’re living in the property when selling, you can tell your agent to schedule these only on certain days or certain times of the day. 

This will make the process a bit easier for you. 

But if you restrict it too much, you can discourage prospective buyers from visiting your house. 

So try to be as flexible as you can. 

And it’s never a good idea to be at your home while potential buyers are viewing it. 

Many of them will feel uncomfortable asking their real estate agent important questions as they’re walking around. 

This is one of the hassles of selling a house.

But you’ll let buyers feel more comfortable when viewing your home. 

Which can help you get an offer faster.

Step 7: Vet, negotiate, and accept an offer

Now the fun begins. 

Sort of.

This is the step in the process where many sellers get anxious. 

And stressed.

Waiting for a buyer to give you an offer can be nerve-wracking. 

But if you followed everything we discussed in the previous steps, you shouldn’t be waiting too long. 

We’re going to break this step down into three “sub-steps.” 

  • Vet the buyer and their offer
  • Negotiate
  • Accept

Because the offer process when selling a home doesn’t work how most sellers think it does. 

How to vet the buyer and their offer

Vetting an offer from a buyer is key.

This will do three things:

  • Eliminate any surprises that the buyer might be trying to sneak in
  • Increase the probability that your sale closes on time
  • Minimize the chances of the buyer backing out

The offer from the buyer will be on a contract and sent to your realtor. This is commonly referred to as a “purchase contract” or “purchase agreement.”

Vet the buyer’s offer

The first step in the vetting process is to thoroughly go through the offer and look for these:

  • Offer price
  • Contingencies 
  • Deposit amount and due date
  • Days to close 
  • Type of financing
  • Percentage of down payment

You’ll see some of these listed on page 1 of the offer contract.

Contract to sell a house

Your real estate agent will go through the offer and discuss the details with you.

For most people selling a home, price is most important.

But pay attention to the others. 

They can have a big impact on your sale.

For example, did the buyer include contingencies?

A contingency is a condition in the contract that must be met in order to make it binding. 

The three most common contingencies from homebuyers are:

  • Loan
  • Appraisal
  • Inspection

This is important to understand when selling.

Why?

Because a contingency allows the buyer to back out of the sale (for that contingency reason) and get their deposit back. 

This means that you can get an exceptional offer price, but it doesn’t mean much until the buyer removes their contingencies. 

And even when they do, they can still back out of the sale.

But it’s much less likely because their deposit is at risk.

This is just one example of why vetting the buyer’s offer is important.

It paints the entire picture of how good their offer really is.

Which helps when it comes time to decide how you want to respond to it.

Vet the buyer

The second step in the vetting process is to vet the buyer. 

Here’s how to do it…

First, make sure your real estate agent requests that every buyer submit the following with their offer:

  • Pre-approval letter
  • Proof of funds (liquid assets, 401k, etc.)
  • Signed disclosures and inspections.

The pre-approval letter will include the loan officer’s contact information and state how much the buyer is pre-approved for.

The signed disclosures and inspections are proof that the buyer is aware of all of the information you provided up front. 

This makes it difficult for them to come back and say they weren’t aware of something. 

Which makes it less likely that they’ll ask you to repair something after the offer is accepted. 

The proof of funds verifies that the buyer has enough for their:

  • Down payment
  • Closing costs
  • Remaining assets that will be required from their lender

Have your real estate agent call the buyer’s loan officer

There are two goals for this phone call:

  1. Verify that the buyer is well qualified.
  2. Extract additional information from the loan officer. 

A loan officer can only reveal so much, but sometimes they’ll say things that can benefit you. 

For example, your agent can call and ask about the buyer’s debt to income ratio.

This is one of the main qualifying factors for the buyer’s loan. There’s a certain percentage that most lenders will go up to (~42-50%). 

The loan officer might slip up and reveal that the buyer has a debt to income ratio well below the max.

This would eliminate the opportunity for the buyer’s real estate agent to use this as an excuse as to why the buyer can’t pay more (common when negotiating). 

These are the little things that can give you and your agent an advantage when negotiating.

Which can help you sell your house for more money. 

This is why vetting the offer and the buyer is key.

Negotiate with the buyer

Now it’s time to see if you can squeeze more money out of the buyer — and maybe better terms.

This is one part of the home selling process that many people assume works only one way. 

It doesn’t. 

There are two different scenarios that can take place when negotiating: 

Before you get the offer and after. 

Negotiating before you get an offer

Your realtor might talk about price and terms without you knowing. 

This happens when the buyer’s agent initiates the conversation before putting the offer in writing.

They’re trying to see if your real estate agent will show their cards. 

If you’re selling with the right realtor, they’re going to know exactly how to take advantage of this. 

The elite ones know what to say and when to say it. 

And can literally bump your selling price by thousands of dollars with just a few words. 

But many agents don’t take advantage of this opportunity.

Or even worse, they do exactly what the buyer’s agent is hoping for. 

This usually happens with real estate agents who:

  • Don’t have the experience.
  • Are just looking to sell a house for a commission check and move on to the next listing. 

Strategize with your agent before you go on market and make sure there’s a plan of attack.

Negotiating after you get an offer

You have three options when you receive an offer for your home:

  • Accept
  • Decline
  • Counteroffer

If you want to negotiate with the buyer, you do so by sending them a counteroffer. 

How to counteroffer when selling a house

The first thing you’ll need to do is accept the buyer’s offer and make it subject to your counteroffer.

You’ll do this by checking a box on the buyer’s offer contract that states this.

It looks like this:

How to counteroffer when selling a house

Next, you need to determine what you want to counteroffer.

You can counter more than just the price.

You can negotiate anything that the buyer included in their offer. 

For example, let’s say you received an offer for the following price and terms:

  • $1,100,000 purchase price
  • 14-day inspection contingency
  • 30-day close of escrow
  • Deposit made within 72 hours after acceptance

You and your realtor discuss it, and you think the best approach is to send the buyer a counteroffer for $1,120,000 and no inspection contingency.

Here’s what that would look like on a counteroffer:

 

Counteroffer when selling a house

 

There’s a default expiration date but you can adjust this to what you think is best.

In many cases, you want to shorten this so that you don’t give the buyer too long to think about it – but discuss this with your realtor.

Is there a risk of sending the buyer a counteroffer?

Yes.

Why?

Because you’re essentially turning down the buyer’s offer and sending them your own.

This means that their original offer is not valid and they can walk away. 

There are many different scenarios that can play out. 

Strategize with your realtor and weigh the risks of the price and terms you want to counter with.

If you’re selling with the right agent, they won’t just guide you through the entire process; they’ll know exactly how to maximize the opportunity to get you the best price and terms. 

This is another reason why your real estate agent can make or break your sale. 

Accept an offer

The day has finally arrived!

You accepted an offer for your home. 

Most realtors will immediately change the status of the MLS to “pending” or “contingent” (depending on whether the buyer has contingencies). 

But tell your realtor to do this instead…

Don’t change the status until after the buyer makes their deposit into escrow. 

Here’s why…

There’s a good chance that the buyer for your home was searching on a real estate search site. 

And they probably saved your home as a favorite.

Every time there’s a change in status, these sites send a notification to every user who saved that property. 

Your buyer might wonder why they aren’t seeing a change of status. 

This is what you want. 

It makes them think that your property is still on the market.

This creates urgency, which will put pressure on them to make the deposit sooner rather than later. 

You want the buyer to make their deposit as soon as possible. 

It’s the first big step for a seller after accepting an offer. 

Why?

Because the buyer is doing more than just putting pen to paper. 

They’re telling you that they’re serious. 

But don’t celebrate just yet. 

You have several more steps to complete before you officially sell your house. 

Step 8: Financing, Appraisal, and Inspections

Have you seen a listing go back on the market after the seller accepted an offer?

It’s almost always because the buyer had an issue with one of these three things:

  • Loan
  • Appraisal
  • Inspections

These are your next three hurdles in the process.

If you and your agent followed the previous step and vetted the buyer and their offer, you’ll reduce the chances of any of these being a problem. 

But a real estate transaction has many moving parts. 

Anything can happen. 

That’s why this step in the selling process is underrated. 

Having the buyer make their deposit is a great start.

But now it’s time to manage the rest of the process to make sure the sale doesn’t fall through. 

Let’s break these down so you know what to expect. 

Keep an eye on the buyer’s loan

The pre-approval letter you’ll see with the buyer’s offer is not a commitment to lend. 

The lender still needs to see other documents that are a part of the transaction (purchase contract, title report, etc.) before issuing the actual loan approval.

This is what the loan officer will be working on as soon as you and the buyer have a ratified contract.

They gather all of the documents and send them off to an underwriter. 

An underwriter is the person who says yay or nay to the buyer’s loan. 

Your real estate agent should be following up with the loan officer and keeping an eye on this process.

Why?

Because when the buyer does receive loan approval, their chances of getting the loan skyrocket. 

This is why most buyers will not remove their loan contingency (if they have one) until they’re approved. 

But the approval doesn’t mean that the buyer is guaranteed the loan. 

There are still going to be several conditions that need to be met before the lender will draw up the final documents for the buyer to sign. 

One of these is an appraisal.

Complete the appraisal process

Your property will be used as collateral for the buyer’s loan.

So their lender will want to make sure that the collateral is valued at the price the buyer is paying. 

The appraisal report will be proof of this.

The buyer’s loan officer will start the appraisal process by ordering the appraisal (buyer pays for it).

Your real estate agent will let you know the day and time that the appraiser will be at your property. 

They usually take ~30 minutes, and there’s no need to stress about cleaning beforehand. 

Cleanliness doesn’t help with the appraised value.

When the appraiser arrives at your home, they’re aware of the selling price. 

Their job is to justify the price with comparable homes that have recently sold.

This is why, in many transactions, the appraised value will match the purchase price. 

When this happens, the buyer’s underwriter will look it over and remove this as a condition for the buyer’s loan. 

And if the buyer included an appraisal contingency in their offer, this is the time that they’ll remove it.

What happens if the appraised value is less than the selling price?

This happens when the appraiser can’t justify the price.

Can this have an impact on your sale?

Absolutely. 

Here’s how.

When the appraised value is less than the purchase price, the buyer is going to have to make one of three choices:

  • Pay the difference.
  • Renegotiate.
  • Walk away.

Their decision is going to be influenced by whether or not they have an appraisal contingency. 

If their offer did include an appraisal contingency, most buyers are going to renegotiate. 

They do this by having their real estate agent send your agent an addendum to the contract. 

The addendum will reflect the updated purchase price (usually the appraised value). 

Then, you’ll have a decision to make. 

You’ll need to decide if you want to accept the updated price or cancel the contract. 

If you cancel the contract, the buyer gets their deposit back and your house goes back on the market. 

This is an example of how a high offer price with an appraisal contingency can initially look better than it really is.

If this happens, you’ll want to discuss the pros and cons with your real estate agent. 

What if the buyer did not include an appraisal contingency in their offer?

Then more pressure is put on them to perform.

Most buyers are aware of the risks when waiving their appraisal contingency with their offer. 

The biggest one?

Coming up with a larger down payment. 

But this doesn’t work how most people think it does. 

Lenders will lend on the selling price or the appraised value, whichever is lower. 

For example…

Let’s say you accept an offer for $1,100,000 and the buyer plans on putting down $220,000 (20%). 

The appraised value comes in at $1,050,000.

This means the lender will use $1,050,000 as the number they’ll lend on, but the purchase price is still $1,100,000. 

In this example, the buyer’s down payment will now be $260,000 (20% of $1,050,000 + the difference of $50,000).

The nightmare scenario is when the property doesn’t appraise and the buyer doesn’t have the extra money for the difference. 

If this happens, you’ll have one of two choices to make:

  • Accept the appraised value as the new selling price.
  • Put your house back on the market. 

If you decide to put your house back on the market, you might be entitled to the buyer’s deposit.

But this is something you’ll need to discuss with your realtor. 

These situations can be messy if the buyer tries to put up a fight.

This is why vetting the buyer and their proof of funds is imperative. 

Buyer’s inspections after an accepted offer

The buyer can choose whether or not to have inspections done.

It doesn’t matter if you provided your own inspection reports up front or if they waived the inspection contingency in their offer. 

In some parts of the country, it’s uncommon for sellers to get inspections before selling their house. 

But as we discussed in an earlier step, doing so can pay big dividends for you.

Why?

Because the buyer has this information before making their offer. 

This means they will be less likely to:

  • Renegotiate
  • Ask you to repair something.

In many cases, this also means that they might waive the inspection contingency in their offer.

As a seller, this is the ideal scenario. 

It makes it much more difficult for the buyer to back out of the sale.

But what happens when the buyer’s offer is contingent on inspections?

Let’s go over this part of the process so you know what to expect.

What type of inspections can a buyer have done?

Any type of inspection they want.

The three most common ones are:

  • Property
  • Termite
  • Roof

A few others include:

  • Pool
  • Chimney
  • Foundation

The buyer will have a certain number of days to get their inspections completed after you accept their offer.

This is spelled out in the contract.

Their real estate agent will let your agent know what day and time the inspections are scheduled for. 

And the reports will usually come back within 48 hours. 

What happens when the buyer gets their inspection reports?

The first thing they’re going to do is discuss them in detail with their realtor. 

Then, there’s a strong likelihood that they are going to renegotiate the price or ask you to fix certain things. 

To what extent will depend on what’s included in the reports. 

Any requests from the buyer will be put on an addendum and sent to your real estate agent. 

All of this is negotiable, but you’ll have a decision to make.

As with the buyer’s original offer, you can:

  • Accept
  • Decline
  • Counteroffer

If you decide to fix certain things, the buyer will want proof before removing their inspection contingency. 

If you and the buyer cannot come to an agreement, they can cancel the contract and get their deposit back. 

This means you’d have to put your house back on the market. 

And you would need to disclose the buyer’s inspection reports to the new buyer. 

This can be a big negative, so you’ll want to discuss the pros and cons with your realtor. 

The buyer’s inspection contingency is a critical part of the process for many people selling their home. 

And it will be for you too. 

Once the buyer removes it, you’re one step closer to a successful sale. 

Step 9: Close the sale

The big hurdles are out of the way. 

The buyer has removed all of their contingencies, and their loan is almost finalized. 

Now it’s time to complete the final step in the process. 

The buyer’s final walkthrough

The buyer will conduct a final walkthrough of the property with their realtor several days before the closing date.

This walkthrough is not a contingency. 

The purpose is for the buyer to acknowledge that the property is in the same condition as when they first saw it. 

They might check for things like:

  • Leaks
  • Functioning heater/AC
  • Broken windows
  • Working appliances

If all is good, then they’ll need to state this on a disclosure that you’ll also need to sign.

If for some reason, there is something that comes up, their real estate agent will discuss the issue with your agent.

This is rare, but it can happen. 

If it does, the buyer may ask you to take care of the issue before closing.

Check to see if you need an attorney at the closing

Some states require you to work with an attorney during the closing process.

They’re there to look over the contract and final documents that will officially transfer the property to the new buyer. 

Here are the states that make it mandatory:

  • Alabama
  • Connecticut
  • Delaware
  • District of Columbia
  • Georgia
  • Kansas
  • Kentucky
  • Maine
  • Maryland
  • Massachusetts
  • Mississippi
  • New Hampshire
  • New Jersey
  • New York
  • North Dakota
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • Vermont
  • Virginia
  • West Virginia

If your property is not in one of these states, you can still hire an attorney. 

Many sellers don’t and choose to rely on their real estate agent instead, but it might be something to consider. 

Especially if you have specific questions regarding real estate law or taxes. 

Sign the final documents

It’s time to make it official. 

You’ll sign the closing documents with a notary and will need to bring the following with you:

  • Legal photo ID (e.g. driver’s license or passport)
  • Account and routing numbers where you want your proceeds wired to

The buyer may or may not sign at the same time as you. 

In most transactions, the seller and buyer will sign at different times — and sometimes on different days. 

Nevertheless, you’ll both sign sometime very close to the closing date. 

One of the documents you’ll sign is your estimated settlement statement. 

This is the same statement we discussed in the first step.

The one that shows your estimated costs.

But this one will show your costs and proceeds with your mortgage balance.

Down to the penny.

The mortgage balance is ordered from your lender.

The escrow company does this for you and handles all of the necessary paperwork to pay it off.

You should get the final version of this statement after the sale is final.

You’ll want to keep this in a safe place as you’ll need to give it to your tax person when filing your taxes the following year.

Get ready for closing

There will probably be ~2-5 days between the time you sign and the day that the sale of your house is official. 

During this time, there are a number of things you’ll want to do to ensure the closing process goes smoothly.

Here’s a checklist for those items…

Home closing checklist for sellers

  • Remove everything that’s not included in the sale.
    • Anything not attached to the property will need to be removed. Your realtor will tell you what can stay and what needs to go.
  • Get it cleaned. 
    • This is optional, but many sellers will do this. 
  • Take utilities out of your name.
    • Call your utility and cable companies and schedule the end date as the same day as your closing date.
    • Leave keys, garage door openers, and manuals.
    • You can give these to your real estate agent. They’ll coordinate the handoff with the buyer’s agent.
  • Cancel homeowner’s insurance.
    • You can call them prior to closing and tell them you want the policy to end on your closing date. If you have remaining time on your policy, you should get a refund for the difference.
  • Update your mailing address. 
    • Register your new address with the USPS, credit cards, banks, and any other accounts that need your address. 

Funding the buyer’s loan

The final closing documents that were signed by the buyer will be sent back to the lender. 

The underwriter will then look them over to make sure all of the t’s are crossed and the i’s dotted. 

If it all looks good, the lender will wire the buyer’s loan amount to escrow. 

This is called “funding.”

During this same time, the buyer will put their remaining down payment in escrow. 

Once escrow has all of the funds (buyer’s initial deposit + remaining down payment + loan amount), they prepare for their final step — closing. 

Time to make the sale official

The sale of your home will be official once the grant deed is recorded in the county where your property resides. 

The escrow company will take care of this and will notify your real estate agent once it’s official.

Receive your proceeds

You’ve finally arrived at the very last step in the selling process. 

The one you’ve been patiently waiting for. 

Your money. 

There are two ways to collect your proceeds:

  • Cashier’s check
  • Wire transfer

If you requested a cashier’s check, you should be able to pick it up later in the afternoon on the day of closing, or at the latest, the next morning. 

If you requested a wire transfer, you should see the funds hit your account no later than the morning after closing. 

And once you do?

That’s it.

You completed the home selling process.

Let’s quickly recap.

What are the steps to sell a house?

  1. Estimate how much you can make
  2. Determine the best time to sell
  3. Decide how you want to sell
  4. Prepare your home for sale
  5. Set the best listing price
  6. List your house for sale
  7. Vet, negotiate, and accept an offer
  8. Financing, appraisal, and inspections
  9. Close the sale

How long does it take to sell your home?

The entire process can take anywhere from 7 days to several months. For the average person who is selling with a real estate agent, a rough estimate for the entire selling process from start to finish is ~3 months.

What can impact the timeline when selling?

The 4 things that have a direct impact on your timeline are:

  1. How you decide to sell
  2. Preparing to sell
  3. Which agent you sell with
  4. Your listing price

How you decide to sell

Selling to a cash buyer will be the fastest, but will net you much less compared to selling with an agent.

Managing the process and selling yourself will take the longest.

Selling with a real estate agent will take less time than doing it yourself and will make you more money.

Preparing to sell

This will depend on how much work you do before putting your home on the market.

If you want to save the most time, then all you need to do is declutter and take photos – but this approach can drastically reduce the amount you walk away with.

Making upgrades will take the longest but can fetch you a higher selling price.

The real estate agent you sell with

If you’re selling with an experienced and savvy real estate agent you trust, then you’ll put yourself in the best position to sell quickly and for top dollar.

They’ll be able to guide you through the process and will know how to save you a boatload of time without sacrificing a single dollar.

Your listing price

The price you list your home for will have a big impact on how long it will take you to sell.

The key is to list at the perfect number. Listing above market value will almost certainly be the reason why your house would sit.

Listing below market value will help you sell much faster, but can also net you a lower price (some buyers won’t offer a certain percentage over your listing price).

There are many things that need to be factored into determining what price you’ll list your home for.

Some of these include the condition of your home, recently sold properties that are comparable to yours, current market conditions, road-noise, layout, and more.

What steps are included in the timeline when selling with a realtor?

You can break the timeline down into three steps when selling your house with a realtor:

  1. Getting your house ready. This can range anywhere from 2-8 weeks. The average time it takes to get ready is about 4 weeks.
  2. Time on market (from list date to accepted offer). This will depend on the current market trends in your area, the condition of your home, your list price, and how well your realtor markets and negotiates. If priced right, the average seller accepts an offer usually within ~30 days, no matter the market conditions.
  3. Closing process. The majority of this is the buyer’s financing. Assuming there aren’t any bumps in the road, the average time to close is ~30 days.

Conclusion

Selling a house involves numerous steps that can be overwhelming. 

Especially if it’s your first time. 

But the process can seem more daunting than it really is. 

The key to an easier sale will be the realtor you decide to sell with. 

The right person will be able to navigate you through every step of the process and take the weight off your shoulders. 

Follow the steps in this home selling guide and boost your chances of having an easier, faster, and more profitable sale.

The biggest fear for many home sellers is having their house sit on the market.

And rightfully so. 

As a seller, when this happens, you lose almost all leverage. Buyers start to think that you’re desperate and will entertain low-ball offers. 

This is the worst scenario to be in.

You don’t just lose time.

You can literally leave tens of thousands of dollars on the table and pile on a bunch of stress. 

My goal is to help you avoid this.

I’m going to share seven tips that will skyrocket your chances of selling fast and for top dollar. 

One of these tips will help prevent the buyer from backing out of your sale.

Let’s jump in.

Tip #1  Remove your emotional attachment

Not the home selling tip you were expecting?

Well, this one is very important. 

In fact, this can be the main reason your home might sit on the market.

There are two scenarios where this usually comes into play.

First, when you start preparing your house to sell, you might be tempted to base decisions on your personal preference. 

Don’t do it. 

Why?

Because your taste in something might not appeal to the largest audience. When you sell your home, the goal is to appeal to as many buyers as possible who are in your target market. 

When you start basing decisions on personal preference, you increase the chances of not attracting as many buyers.

I’ll touch on more of this in a minute.

Second, and this one is more common, when you negotiate with the buyer, keep one very important thing in mind: This is a business transaction. 

Don’t let your ego put you at risk of leaving money on the table. And don’t get too greedy.

Let me give you two quick examples.

Let’s say your home has been on the market a bit longer than expected. Maybe the average home in your area goes pending within ~21 days. 

You get an offer on day 29. It’s a bit under the asking price and contingent

It’s not what you were expecting, but it’s not the worst offer. 

After discussing with your realtor, you decide to send a counteroffer to the buyer at the asking price. 

You’re hoping they accept it, but you’ll be satisfied meeting the buyer halfway. 

They don’t. 

They send you back a counteroffer at the same price and terms as their original offer. 

It’s decision time. 

Do you let your emotions get in the way because the buyer didn’t budge? 

You’ve been on the market for 29 days and this is the only offer you’ve received. What are the chances of getting something better (or the same)? 

Maybe you don’t accept their offer, but you need to weigh the pros and cons. Some sellers don’t. And it ends up costing them much more than they thought. 

On the flip side, let’s say you’re in a really hot market.

You get three offers within 10 days. All above the asking price. 

One of them is a bit more than the other two. 

You’re thinking that if three buyers all gave you offers above your asking price, you might be able to squeeze a bit more out of them. 

You very well might be able to. But there’s a risk. 

When you send a counteroffer (or multi-counter in this situation), you put the ball back in the buyer’s court and risk letting them walk away. 

So, it’s decision time again. 

Do you accept one of these offers or try to get a bit more because you know the buyers really like your house?

Some sellers like to gamble, but it can backfire.

Your goal is to sell your house quickly and make the most possible money. You increase your chances of doing this when you don’t let your emotions play into your decision making.

This is one reason why choosing the right real estate agent is key. They’ll be able to guide you through scenarios like these so that you can make an informed decision. 

Tip #2 Hire the right real estate agent, early

Want an easier home sale?

This is one of the best tips for selling your home that I can give you.

Hire the right real estate agent sooner than you think you should. 

Many sellers wait. 

Either because they don’t want to go through the hassle of finding an agent, or because they’re not aware that the right realtor can be a tremendous benefit earlier in the process. 

They end up adding a bunch of stress that could have been prevented.

The right realtor will save you a boatload of time, headaches, and money. 

Notice how I mentioned the “right” realtor?

That’s because it’s more important than “top.”

Of course, you want to hire a top realtor. But don’t just hire them because they do a lot of business or have many years of experience. 

You want to make sure you hire someone who is going to have your back. 

How do you do this?

Ask the right questions when you interview them.

You want to make sure you work with someone who is going to put your interests before a commission check. 

Asking the right questions can help you do this.

We recently turned down a top realtor in Silicon Valley who wanted to join our platform. This agent does a lot of business and is in the top 1% nationwide. 

We turned them down because we don’t believe a specific approach they take to selling a house puts the seller’s best interest before theirs. 

And you should do the same.

If you don’t get the right vibe or the right answers, then don’t hire them.

Even if you already know them, don’t skip the interview. 

And especially don’t give them the idea that you’re going to hire them no matter what. 

This is a mistake that a lot of home sellers make. 

They contact a realtor they have previously worked with or someone they know, and they sign the contract without having an in-depth conversation. 

When you do this, you reduce the chances of that agent giving you 110%. 

At a minimum, you want to hear their game plan for selling your house fast and for the highest price. 

“Keep them on their toes,” as they say. 

It will be well worth it. And your sale will be easier. 

They can make it much easier if you hire them early.

If you’re like most home sellers, you’re spending a lot of time researching everything you can about selling your home. 

You’re thinking about what needs to be done and when. 

This is good.

But not everything you’ll come across can be applied to you and your home.  

For example, this post tells you that water stains are a huge red flag and need to be fixed before selling. 

If you’re reading that and you have a water stain, you’re going to freak out and might spend a bunch of time and money fixing it. 

Not all water stains need to be fixed. In fact, many of them are old and don’t require any attention (but do need to be disclosed). 

This is just a small example, but here’s the point…

The reason why hiring the right real estate agent early is one of the top tips for selling your home is because they can help you avoid making mistakes like this.

And they can help you in many other ways.

The best ones will give you a game plan from the get-go, have all of the contacts you’ll need, and offer to help as little or as much as you want. 

I guess what I’m trying to tell you is, hiring the right real estate agent early can make your sale a lot easier.

When should you contact a realtor to sell your house?

Probably as soon as you know that you’re selling, or three to four months before you plan on listing your home, whichever is shorter. 

Tip #3 Read your agreement

It’s imperative that you know what you’re agreeing to before signing an agreement with a realtor. 

Most of them will go over this with you during your initial consultation.

I’m going to share two tips so that you’re aware of two tactics that you might come across.

Timeframe

The time period the contract is valid for is negotiable. 

In the contract that is used for California, the time period is stated on page one. 

A quick sidenote: The language used in real estate contracts can differ depending on which state you’re in. 

They all include the “important” items, but the way they are written can differ.

I’ll be using the California contract for examples, so if you’re in a different state, you might see something slightly different.

This is an example of what it looks like in California. 

Tip for signing the contract with a realtor when selling a house

The start date is when your agent can officially start helping you. 

The end date is when the contract expires. 

When discussing the timeframe, you’ll want to consider these three things:

  1. The time from when you want your agent to start helping you to when you plan to put the home on the market
  2. Estimated time from going on market to accepting an offer
  3. Estimated time from accepting an offer to closing

The average timeframe is usually between three and six months. 

If you sign your agreement relatively close to the time when you expect your home to be listed, be aware of agents who are pushing for six months or more. 

Unless you’re in a market where the average home takes three to four months to sell, a six-month timeframe is excessive. 

Some real estate agents will push for (or include without even discussing it) much longer timeframes than they should need. 

This is actually one of the oldest tricks in the book. 

Here’s how it usually works…

The agent will overpromise on the estimated selling price. You’ll get excited because they’re overly confident when discussing an inflated value that sounds too good to be true.

The contract is for ~6 months, but you don’t care because they said they can sell your house much higher than you thought. 

After the house has been on the market for an extended period of time, they advise you to drop the price.

And that’s what you do.  

The house eventually sells at a much lower number than you were expecting. 

But…your realtor still got paid a commission. 

In many of these cases, the realtor knows there’s almost no chance of the house selling at the price they initially discussed. They used this tactic to get the contract signed. 

The realtors who do this are usually the ones that have zero confidence in their ability to properly market your home, so they overpromise to secure your business.

The best realtors will clearly outline your timeframe and why they think they can sell your house at or above their recommended asking price. 

I would make sure of two things when it comes to the time period in your contract:

  • Your realtor discusses it with you
  • It aligns with their timeline of how long they think it might take to sell your house

Commission

When you sell, you’ll pay the commission to both your real estate agent as well as the buyer’s agent.

Well, technically you’re paying the commission to both agents’ brokerages.

But, nevertheless, the seller pays the total commission. 

Depending on your area, the total commission is usually around 5-6%. But this can be different depending on the type of agent you hire and the services they provide. 

Now, here’s the tip you need to know about the commission.

Make sure you understand how much is getting paid to your brokerage and how much is being offered to the buyer’s brokerage. 

Because some real estate agents will try to slip this past you. 

You will technically pay the entire commission to your brokerage, and your brokerage offers a certain percentage to the buyer’s brokerage. 

Here’s an example:

In most cases, the total commission is split 50/50. 

But some realtors will put a higher percentage for their brokerage without telling you.

This can hurt you because if you’re paying a lower-than-average commission to the buyer’s realtor, then they may be less motivated to show your home compared to your neighbor’s. 

The key tip?

Make sure you understand how much is being paid to each brokerage before signing the agreement. 

Tip #4 Get inspections

Many home sellers panic when it comes to getting inspections. 

Or worse, they don’t get them at all. 

Here’s the first inspection tip I have for you when selling your home:

Get them done. 

They’ll be one of the best investments you make. 

Let me explain by using an analogy I always use when it comes to selling a house and getting inspections. 

Let’s say you’re in the market for a used car. You come across one you like very much, but the owner has no paperwork, no receipts, and no Carfax. 

You don’t know what’s “under the hood.”

Are you going to make your best offer? Probably not, right?

Well, when you don’t get inspections before selling your house, buyers won’t give you their best offer. 

Or they might not even submit an offer at all. If they do, it’s almost a guarantee that their offer will include an inspection contingency. 

You might be thinking, “Doesn’t the buyer do their own inspections?” 

They can, and many of them do.

But when you have them done upfront, it does two things:

  1. Gives the buyer more confidence in submitting their best offer
  2. Reduces the chances of the sale falling through 

Let’s say you decide not to have inspections done before selling. 

You accept an offer, and the buyer has an inspection contingency. 

They have their property inspection done, and the report comes back with numerous items. Nothing major, but items that need to be fixed and will cost money. 

Many times, the buyer will think they have leverage over you because you were unaware of these. 

So, they ask you to pay for the work.

And they throw out an excessively high number.

Not only did they submit an offer that probably wasn’t their best, but they’re now asking you to pay for everything.

You and your agent think they are being unreasonable, so you go back and forth on the dollar amount. 

You can’t come to an agreement or the buyer gets turned off, so they back out of the sale. 

Now let’s say you decided to have the inspections done before putting your home on the market.

The buyer is now well aware of what’s “under the hood” and is more confident about their offer. 

Could they still include an inspection contingency? Yep, and many buyers do. 

But here’s the difference. 

As long as there isn’t a major discrepancy between your home inspection and theirs, the chances of them asking for repairs are dramatically reduced because they were aware of your report before making their offer. 

So by getting inspections done before selling your home, the buyer probably submitted a better offer and will be less inclined to ask you to make repairs.

Make sense? 

Great. 

Here’s the next inspection tip when selling your home.

You don’t need to take care of every single item called out in the report. 

And there will most likely be numerous items mentioned.

This is typical. 

Inspectors do this not just because it’s in everybody’s best interest, but also for liability reasons. 

You might see things like these mentioned in your report. 

Repair items listed in a home inspection when selling a house

These items are what most people would consider “minor”. 

The buyer and their agent are expecting to see some items called out by the inspector.

Fixing these before putting your home on the market is optional, but it’s almost always a good idea. 

If you’re working with the right agent, they’ll be able to advise you on what’s worth fixing and what’s not.

Which brings me to the next inspection tip for selling your home. 

Don’t waste time fixing things before the inspection. Wait for your agent to advise you.

Many sellers stress and think they need to go through the house, fixing everything. 

You don’t.

Now, if there are simple things that can be fixed or items you know will be called out by the inspector, then go ahead and fix them.

But you don’t need to waste a bunch of time preparing for a home selling inspection. 

You can do this instead.

Fix the items in the home inspection report that are worth fixing and then have your agent list the items you fixed in a Word document and include it in your disclosure package. 

Here’s an example of what this might look like.

List of items repaired in the home seller's inspection report

The buyer will request your disclosures and inspections when they’re thinking about submitting an offer.

Including a document that shows them which items you took care of will give them more confidence and help make your home stand out from others they might be considering.

Two other inspections that might benefit you include termite and roof inspections. 

A termite inspection is common in most areas and for most properties. 

A roof inspection is usually recommended for all single-family residences, but not for condos and townhomes as the HOA is almost always responsible for the roof. 

The most important thing about having inspections completed is that the buyers have them upfront so they can feel more confident about making their best offer. 

Here’s a summary of the best home selling inspection tips:

  1. Get them done before listing your home
  2. Minimize your time spent fixing things before the inspector comes out
  3. Ask your agent which items are worth fixing
  4. Have your agent include a document in your disclosure package that shows which items you’ve taken care of

Tip #5 Optimize your home’s appearance

This is one of my favorite tips.

Mainly because many home sellers struggle when getting their house ready to sell.

Or they get bad advice.

Knowing what to do (and what not to do) will help you sell your house fast and for top dollar. 

How do you do this?

Think visually.

Let me explain.

Remember the first home selling tip we discussed about keeping your emotional attachment out of the sale?

Well, now look at it from the buyer’s perspective. 

Buying a home is an emotional decision. And in this case, emotion can be your best friend. 

Your goal (and your agent’s job) is to maximize the emotion a buyer feels when they see your home. 

You do this by optimizing the appearance. 

But this doesn’t mean you need a new kitchen or bathroom. 

Will making a bunch of upgrades make your home look better?

Of course.

But not all of them will pay off.

In many cases, it’s the inexpensive things that will bring the biggest bang for your buck. 

Here are a few examples:

Is your lawn not as green as you’d like?

You don’t need new sod. Spray paint your grass instead.

Do your kitchen or bathroom cabinets not have knobs or handles?

Add them. They make a huge difference. 

Can you add mulch to your landscaping?

Do it. It will have a positive impact on how buyers view your exterior.

Appeal to more buyers

The larger the audience you can appeal to, the sooner you’ll get that offer you’re hoping for. 

This means as you start to prep, keep your personal preferences to the side. 

The key to doing this is to think neutral. 

Will pictures of you and your family help potential buyers envision themselves living there?

Probably not, right?

Is your chair in front of the TV that you’ve been sitting in for the past 14 years something that most buyers would sit in?

Most likely not. 

Adamant on keeping any dark-colored walls?

Most buyers will immediately factor in the time and money they have to spend repainting.

Whether you’ve lived in your home for three years or 30 years, you have to keep in mind that this won’t be your home any longer. 

Remember, this is a business transaction. 

Here’s a tip that can help with this. 

Walk across the street and stand there for a good minute looking at your home. 

Now pretend this isn’t your house. Pretend you’re a buyer. 

How does your exterior look? 

Walk inside and go room by room. Look for the little things that you might not normally pay attention to. Because this is what buyers will notice. 

They’re going to be looking at your house with a fresh set of eyes. You want to minimize any concern they might have about how well you’ve taken care of the property. 

And this doesn’t mean you need brand new quartz countertops or engineered hardwood flooring.

For example, let’s say you have marks on your wall (which is common). A new paint job isn’t needed, but you decide to skip the touch-up. 

Now pretend you’re the buyer. 

You’re viewing these marks and you’re thinking, “What else have the sellers not taken care of ?”

You want to minimize these types of questions. 

Make sense?

Optimizing your home’s appearance is key to selling quickly and for the best price. 

But you don’t need to waste a bunch of time and money doing it. 

Get advice from an expert. 

The best agents can walk through your house in seven to 10 minutes and tell you exactly what should be done. 

Not all of them have the expertise (or willingness to help) and contacts to help you prep quickly, but the best ones do. 

The ones who are willing to put in the extra effort can engineer a game plan and do all of the heavy lifting so you don’t have to. And they can get it done much quicker than you think and with much less effort from you. 

Here’s the key tip to take away from this:

Optimizing your home’s appearance is crucial to selling quickly and for the best price. But with the right help, it will be much quicker and easier than you think.

Tip #6 Set the best asking price

There’s a good chance that when your buyer first finds out about your property, they’ll already know what similar homes in your area have been selling for. 

Most buyers search online and have been searching in specific areas before getting their offer accepted. 

Three things will stick out to them when they see your listing online:

  1. Photos
  2. Property description
  3. Asking price

Miss the mark on any of these and the amount of interest in your home will significantly drop. 

Especially if you set the asking price too high. 

But you don’t want to set it too low either. You could leave money on the table, even in a hot market. 

And keep this tip in mind: The asking price should be incorporated into the marketing plan for your home.

The goal is to generate more interest and use it to help justify why your house is worth more than your neighbor’s.

Put yourself in the shoes of potential buyers. We know that they’re most likely familiar with your area and the recently sold homes that are similar to yours. 

We also know that the asking price is going to be one of the first things they see. 

Let’s play out a scenario where you set the asking price higher than what the most recently sold homes have sold for (after factoring in the differences). 

If you were the buyer, would you be intrigued? Probably not.

What if you priced it a bit below what those homes sold for? 

You’re going to hit the “favorite” button on whichever real estate search site you’re on. And that’s what you want your potential buyers to do. 

But let’s get one thing out of the way: The asking price for your home does not mean the selling price. 

Many sellers get hung up on this and think a buyer won’t pay more than what they’re asking. They will if you have the right agent. 

And here’s another thing: Just because you set the asking price at a certain number does not mean you need to accept an offer at that number. You’re not obligated to accept any offer, even if it’s much higher than your asking price. 

Now I’m not saying you should price your home below the sale price of recently sold homes. All I’m saying is be open to the idea. 

When you do this, you’ll pique the curiosity of more buyers, which can increase demand. Then, it’s your agent’s job to “sell it” and negotiate the highest price. 

The top agents are masters at this. It’s a skill set that many don’t have. 

When negotiating, you have to know what to say, but more importantly, when to say it. And the best selling agents know exactly how to do this.

So remember this tip when selling your home: Setting the best asking price will allow your agent to have more conversations with the agents of potential buyers, which maximizes your opportunity of selling for more than your neighbor.

Tip #7 Vet the buyer

Want to reduce your chances of having the buyer back out of your sale?

Then keep this tip in your back pocket: Make sure your real estate agent vets the buyer. 

The best ones do. 

Here’s how…

They’ll ask that any offer submitted includes these four things:

  1. Offer contract
  2. Pre-approval letter
  3. Proof of the buyer’s funds
  4. Signed disclosures 

When an offer does come in, the first thing they’ll do is go through the offer contract and summarize the highlights (price, terms, contingencies, etc).

Then, they’ll go through the signed disclosures and/or acknowledgment of your inspections. 

Next, they’ll look at the buyer’s funds. These include all liquid assets, stocks, 401k, etc. 

The goal here is to verify that the buyer has enough funds for the down payment, their closing costs, and the required reserves (most loans require that the buyer have an additional 6-12 months worth of mortgage, taxes, and insurance after the loan closes).

Here’s another tip: If you think your house might not appraise at the purchase price (e.g. you received a great offer you weren’t expecting), then make sure your agent ensures that the buyer has enough funds to cover the potential difference of what they would need to pay. 

After looking at the buyer’s funds, the next step is to call the loan officer. The agents who do this are trying to get as much information about the buyer as they can. 

Loan officers can only disclose so much, but the goal is to verify that the buyer is good with the 3 C’s of mortgages: credit, capacity, and collateral. 

Credit = credit score

Capacity = debt-to-income ratio

Collateral = down payment + additional funds

The last step of this process is to bundle all of this information into a simple summary for you. 

Vetting the buyer like this does two things:

  1. Gives you more information so that you can make a more informed decision when deciding if you should accept, counter, or decline the offer
  2. Reduces the chances of the sale falling through

Of course, a sale can fall through for any reason, but when the buyer is properly vetted, the chances of that happening are greatly reduced. 

This approach is more common in certain parts of the country than it is in others, so asking your agent about this upfront is a good idea. 

Conclusion

Selling a house can be stressful. 

Applying these tips can help you sell fast, for more money, and make your sale easier. 

Keep these close by as you start the process of selling your house and boost your chances of doing just that. 

Pop quiz! Which one of these do home sellers find most stressful?

  1. Not knowing if they can sell within their desired time frame
  2. Getting a house ready to sell
  3. Not knowing if buyers are seriously interested 

Most people guess “B” — after all, if you don’t know how to get your house ready to sell, it can create all types of anxiety and stress.

But according to a recent Zillow consumer survey, the correct answer is A.

And this makes complete sense. 

Many sellers don’t believe they can sell their home fast (and for top dollar) because they don’t think a buyer will find their home appealing. 

In some cases, their house sits for an extended period of time and they end up accepting an offer below market value. 

And almost every time this happens, there are things they could have done before selling that would have prevented this.

That’s what we’re going to discuss.

But before we do…

You need to start with this.

Get your house ready with a different mindset

Do you want to know one of the secrets to get your house ready to sell quickly?

Your mindset.

Along with a plan, you need to have the right mindset.

And that mindset is to think of this as a business transaction. 

Many sellers don’t.

When it comes time to make decisions on certain things, they base these decisions on their preference. 

Don’t do it. 

Homebuyers (and humans in general) buy off of emotion. 

Your specific taste in something might not appeal to the largest audience.

The more buyers you can appeal to, the better chance you have of getting the best offer in the shortest amount of time.

The key to getting a house ready to sell is to optimize its appearance to attract the most buyers.

But to do so while spending the least amount of time and money

Keeping the emotional attachment out of this process helps you do this. 

All right, now that you have the right mindset, let’s go through 7 money-making tips for getting a house ready to sell. 

#1: Maximize your space

Decluttering your house is the first thing you’ll want to do when getting ready.

This can be one of your biggest payoffs.

Why?

Space.

Buyers love to see space and storage.

The more, the better.

But it can be overwhelming if you don’t know where to start.

So, here’s my advice…

Get trash bags and moving boxes. If you need smaller storage containers, Home Depot has quite a few options. 

Then go room by room. 

Decide what’s going with you and what can get tossed (or donated). 

Stay focused by concentrating on one room/area at a time. 

After you’ve completed each room, you can start with the closets. 

Label the boxes, tape them up, and store them. 

If you have a garage, it’s perfectly okay to stack the boxes in there until you move. 

Buyers will want to get a peek, but having boxes there won’t have a negative impact.  

If you have a basement, I’d recommend not storing boxes there. A basement can be a selling feature, and the last thing you want to do is obstruct a buyer’s view. 

If you run out of room, or if you have bigger items that need to be stored, then you’ll need a place to store everything. 

If you’re staying local, you can rent a storage unit from a place like Public Storage

Another company that will store your stuff, but also gives you the option for a pickup, is Clutter

If you’re moving far away, you can also look into a storage container

Anything that’s not going with you can be set to the side. 

When you’re ready, you can contact a junk removal company and have them come and pick everything up. 

The key to decluttering is to put yourself in a buyer’s shoes. 

Pretend this isn’t your house. 

What looks clustered? What is taking up too much space? Do you have personal items and/or photos? Anything outdated that probably won’t appeal to a large demographic?

These are the items you should plan on removing when getting your house ready to sell.

#2: Get a home inspection

If you’re wondering if you should get a home inspection before selling, the answer is a definitive yes. 

Do you need to get a home inspection? No.

Inspections aren’t required when selling but can be one of the best investments when getting a house ready to sell. 

It gives potential buyers information about what’s “under the hood.” 

Your property can look great online and in person, but even if it looks to be in great condition, buyers will want to know if everything is working as it should and if anything needs to be fixed.

A pre-sale home inspection will alleviate these concerns.

You want to know how to prepare for a home inspection as a seller?

You don’t. 

Why?

Because you’ll most likely waste your time and money. 

Many sellers will spend a lot of time making repairs before getting an inspection. And a lot of them spend way more time (and money) than they need to. 

They’ll go through the home and repair every little thing. You don’t need to do this. 

The one thing you will want to do is to make sure the inspector has access to everything they’ll need (water heater, crawl space, etc).

But why spend time on things that might not be called out in the home inspection?

Now, if something is easily visible and needs to be fixed, then sure, go ahead and fix it. 

But get the inspection first and make repairs after. This way, you can save time getting ready and knock everything out at once. 

You might be thinking, “But won’t the inspection report show a list of items that need to be fixed, which will turn buyers away?”

Yes, the report might come back with a list of items. In fact, it’s almost guaranteed that you will have numerous items called out, even if you make repairs beforehand.

Inspectors are going to pick your home apart and call out every tiny detail they see. 

Here’s an example of an inspector calling out an uneven walkway as a trip hazard:

Home inspection before selling a house

They do this for liability reasons. And this is perfectly fine as buyers and their realtors should be well aware of this. 

But if you have a great real estate agent, this won’t have a negative impact when buyers view the report. 

Your realtor should do these two things:

  1. Provide you with recommendations for things that should be fixed
  2. Provide potential buyers with a list of items that have been repaired 

An experienced real estate agent will know which items are worth fixing and which ones aren’t. 

Here’s a quick tip: 

When you interview real estate agents, ask them what they think should be fixed or updated. You should be able to tell pretty quickly if that agent carries the expertise you’ll need to help optimize the appearance of your home.

When the inspection report comes back, your realtor can give you a checklist of items that are worth taking care of. 

Then, when these items are completed, they can list these items in a Word doc and include the completed items on your checklist in the disclosure package (usually a PDF file for interested buyers that includes the seller’s disclosures, inspections, reports, etc.). 

This way, when buyers view the home inspection, they’ll see that you took care of the most important items. 

And if you have receipts, you’ll want to include these as it shows prospective buyers the time and money you’ve invested in getting your house ready to sell. 

The buyer can still choose to get their own inspection, but when you provide it up front, it does three things:

  1. Helps the buyer feel more confident when submitting an offer
  2. Reduces the chances of the buyer asking you to make repairs
  3. Decreases the chances of the buyer backing out

A pre-sale home inspection is optional but well worth the upfront investment before selling.

#3: Make repairs and upgrades that pay off

The most important repairs to make as you prepare to put your house on the market are ones that pay off. 

That seems like an obvious statement, but it needs to be said because too many sellers spend time repairing things that don’t matter. 

Of course, making any type of repair doesn’t hurt, but there’s no need to spend time, money, and stress on repairs that won’t benefit you.

The important repairs you’ll want to make before selling can be big-ticket items or smaller ones.

But how do you know which ones are worth making?

First, refer to your home inspection and the list of recommendations that your realtor should be giving you.

Any big-ticket items will most likely be on here. 

Some of the bigger things to fix when getting ready include the following:

  • Air conditioning 
  • Furnace 
  • Water heater
  • Foundation issues
  • Replace subfloor (usually in bathroom caused by leaks)
  • Electrical problems
  • Roof leaks

A lot of the smaller items will be on the inspection too, but some might not be mentioned.

You can find some of these yourself.

Here’s how:

Walk through your home from the perspective of a buyer.

This is not easy to do, but it can really help as you start to get ready. 

Grab a pen and paper and step out your front door. Walk back in and pretend you’re seeing your house for the first time. 

Go room by room and walk slowly. Does anything stick out visually or is anything not functioning as it should?

If so, these are the things that you’re going to want to fix as they’ll get you the biggest bang for your buck. 

Spend a good 20-30 minutes and make a list.

Marks on your floor? Stains on your carpet?

Check all of your door knobs. Do they work properly? 

Open and close your windows and doors. Do they function as they should?

Can your showers and bathtubs use a re-caulking?

Check your AC filters. 

Are they dirty? Replace them.

Once you have your list completed, it’s time to determine if anything needs to be replaced. 

What should I replace before selling?

Anything you replace is going to help, but not everything will make you money. 

The key to knowing what to replace before selling is to think visually. 

Remember, buying a home is an emotional decision, so the items that will pay off are usually the ones that a buyer will get excited about when viewing your home.

Make the right replacements when getting ready and buyers will pay you more money than what it costs you.

Upgrades to the kitchen get the most excitement, but they are also usually the most expensive.

Could your kitchen use a little updating?

If so, start here. 

If your cabinets have outdated knobs or handles (or none), replace them.

This can make a huge difference. 

And they’re cheap.

You can get a 10-pack at Home Depot for $20. 

Keep it simple. No need to get too fancy. 

Satin nickel works well with many cabinets. 

Should you replace your appliances before selling your house?

If you’re asking this question, the answer is yes.

Upgrade to stainless steel. 

If some of your appliances are stainless steel and others aren’t, replace the ones that aren’t. 

Upgrading to stainless steel appliances is one of the best tips to get your home ready.

They make your kitchen pop.

Not just in-person, but in your photos too. 

But, as with other things you might replace, don’t spend a fortune. Unless you’re in an area of higher-end homes, you don’t need higher-end appliances. 

The most important thing is that they’re stainless steel. That’s it. 

It makes sense to replace your countertops when getting ready if your kitchen is in good condition but your countertops aren’t. 

For example, are your cabinets in decent shape but you have something like Corian countertops?

Think about replacing them with granite or quartz. 

Quartz is more desirable right now.

And if your kitchen is in decent shape and you have older tile countertops like these, then you should definitely think about replacing them:

Tile countertops in kitchen being replaced for quartz before selling a house

The older tile countertops are an eyesore. 

Updating your appliances and countertops can be a great investment when getting a house ready for sale.

Just like the kitchen, remodeling a bathroom can be expensive. 

In many instances, replacing things in the bathroom will make you more money compared to a complete remodel.

Vanities can also be a great investment when prepping.

Is yours outdated?

Then I would highly consider replacing it.

Look at your shower fixtures too.

Are they older? Replace them. 

Bathrooms don’t have as much of an impact as a kitchen does, but they’re next in line.

Flooring is another biggie.

When you upgrade your flooring, the resale value will usually be higher than the cost. 

A lot of this will depend on the current condition of your home. 

For example, replacing carpet will almost always pay off if your home is in “average to good” condition. 

And when I say replace, I’m talking about replacing the carpet with a new type of flooring.

Carpet was sought-after 15-20 years ago, but nowadays, the majority of buyers prefer flooring such as laminate, vinyl plank, or hardwood. 

If you’ve updated your kitchen and bathrooms within the last ~15-20 years, then replacing your carpet with new flooring probably makes sense.

If your kitchen and bathrooms are a bit outdated, then I would probably leave the carpeting. 

When you replace a sought-after feature such as flooring, kitchen, or bathrooms, if the others haven’t been updated in a while, the positive impact is minimal.

The only exception might be the kitchen. But it depends on the home.

If replacing your carpet with new flooring doesn’t make sense for you, you have two other options:

  • Replace your carpet with new carpet
  • Keep your current carpet, but get it cleaned

As long as your carpet hasn’t been torn apart, always shoot for option B.

What about my roof ?

Unlike your kitchen, bathrooms, and flooring, replacing your roof will most likely cost you more than the added resale value. 

Buyers don’t tend to pay attention to the roof when viewing a home.

So, in a lot of cases, adding a new roof when getting your house ready to sell will bring a negative return on your investment.

Remember, it’s all about visual appeal.

The upgrades that make you money when selling are the ones that enhance a buyer’s emotional state when they view your property — and a roof isn’t one of them.

But replacing a roof before selling can make sense if it’s in really bad shape or if you have a wood shake roof in an area where this isn’t desirable (most areas). 

A roof inspector is going to state the condition as something such as “great,” “good,” “fair,” or “poor.” 

And they’ll usually give an estimate of the remaining life left. 

If your estimated roof life comes back in the 5-to-7-year range, then it probably makes sense to replace it. 

This tends to be the range at which buyers will start factoring in the cost for a new roof into their offer. 

Anything greater than that and you should be good, but you’ll want to confirm with your realtor.

And if your property is a complete fixer, then it’s definitely not worth it (unless you’re updating everything).

Many sellers opt to not make any updates or replace anything when getting their house ready to sell because they think that the buyer will do them. 

And some do. 

But a lot of them don’t because they don’t have the money to do so.

Do you want to know why replacing certain things before selling can pay off?

Because the majority of buyers are paying ~20% at most out of their pocket for that upgrade. 

They’re financing the rest. 

The lower upfront costs allow them to pay you more money if the upgrade is something they want.

So when you know what you should replace as you prepare to sell, you can drastically improve your chances of putting more money in your pocket.

#4: Enhance your lighting

Bad lighting is something that can immediately turn a buyer away. 

Even just one dark room can have a negative impact. 

A quick fix for this is to check your bulbs to make sure they are giving off the light that they should. 

Go room by room and check each one. 

If they aren’t as bright as they should be, take them out and have them replaced. 

And you might want to consider upgrading.

LED bulbs are the best light bulbs for selling a house. 

These are the most energy-efficient bulbs, and they add an extra incentive to buyers. You can find some good deals in bulk on Amazon

The next thing you want to check is your light fixtures (interior and exterior).

There are a handful of things that can really enhance your visual appeal at a low cost, and light fixtures are one of them. 

An outdated light fixture can give the impression that other things in your home might be outdated and need to be fixed. 

The best light fixtures to sell a house depends on the condition of your home.

If your home is in “average” to “good” condition, then upgrading to modern fixtures will have a positive impact on your home’s perceived value. 

The key is to keep it simple. 

Remember, you want to appeal to as many people as possible. This means staying neutral and not going with something out of the ordinary.

Something like this could work well for many homes: 

Modern lighting is the best lighting to sell a houseYou might also want to consider upgrading to recessed lighting.

Recessed lights are a selling feature and the best interior lighting for selling a home.

They’ll almost always pay off. 

Depending on your location and who you hire to do the work, the average cost can range somewhere between $200 and $350 per light (materials and labor). 

If you go this route when getting your house ready to sell, keep it to a minimum.

I would stick to the main areas of your home only (kitchen, living room, master bed).

#5: Paint with neutral colors

Should you include painting on your checklist when getting ready?

The answer is almost always, yes.

If your home isn’t a fixer-upper and hasn’t been recently painted, then it’s probably a good bet.

And probably only the inside. 

But what you probably really want to know is if you only need to touch up paint or paint the entire interior, or maybe only certain rooms. 

When’s the last time the interior of your home was painted?

10-15+ years?

Then I would suggest walking through every room and seeing how much touch-up paint you might need. 

Numerous places in every room?

Consider painting the entire interior.

Not that many places in need of a touch-up?

Then you’re probably okay with just a thorough touch-up job.

But your best bet is to get your real estate agent’s opinion.

What about the colors?

Colors are important.

Do not go with anything crazy.

Staying neutral is key.

These are some of the best paint colors for selling a house. 

  • Swiss Coffee
  • Frost
  • Wise Owl
  • San Francisco Fog

You can find these at Kelly-Moore.

Painting the exterior is usually recommended if your paint job is extremely old or if your exterior color is something that isn’t common. 

If not, you’re probably okay keeping your exterior paint as-is.

First impressions are everything, and painting a house when getting ready to sell will almost always make a great impression. 

#6: Boost your curb appeal

Speaking of first impressions.

Boosting your curb appeal before selling can make an even greater impression. 

It’s the first thing a buyer will see when they pull up to your home. 

Remember when I said a buyer’s emotion will influence their decision?

Well, this is where it all starts. 

When a buyer gets out of their car, they’re going to have an immediate positive or negative reaction. 

If done right, enhancing your curb appeal will immediately give off a positive vibe.

But this doesn’t mean you need to spend thousands of dollars.

When it comes to landscaping, think colors. 

Having multiple colors is important and will help make your curb appeal pop. 

Here’s how you can improve the curb appeal when selling a house:

  1. Plant colorful plants and flowers
  2. Apply mulch
  3. Spray paint your grass

When it comes to planting plants and flowers, you don’t need to go extravagant. 

Keep this simple. 

Going with a combination of something like annuals, ground-covered plants, and flower bulbs can work wonders.

Sought-after for their low maintenance, drought-tolerant plants can also be a great investment. 

For the average home, you can spend several hundred dollars at Home Depot or any other home improvement retailer and get everything you need.

Applying mulch can cover up the “wasted” areas with an updated look. 

There are different types of mulch, but two of the more common ones you’ll see are shredded hardwood (tanbark) and wood chips. 

Can you really spray paint your grass?

Yep.

Spray painting sod is one of the best tips for selling a home.

Check this out…

One of our partner agents helped their clients do this to their back lawn.

This is what it looked like without the spray paint:

Backyard lawn before selling a house and without spray paint

And here it is 20 minutes later:

Landscaping to sell a house with spray painted grass

You can apply these same landscaping upgrades to your backyard, but your front yard will have a bigger impact. 

Here are a few other cost-effective ways to enhance your curb appeal when getting ready.  

  • Power wash
  • Paint trim
  • Manicure/edge your lawn
  • Clean your gutters
  • Check/upgrade your lighting

Want to know how you can really improve your curb appeal?

Paint your front door. 

The best color to paint your front door will depend on the color of your exterior. 

A light-colored front door goes well with a dark exterior, whereas a dark-colored front door goes well with a lighter exterior.

Again, don’t go crazy. 

Stay conservative and stick with colors that will appeal to a wider audience. 

So, how important is curb appeal when getting a house ready to sell?

Very. 

Why?

Because when you know how to improve your curb appeal, you make a great first impression.

And when you make a great first impression, you make buyers want to find out more. 

#7: Deep Clean

Incorporating cleaning into your checklist when getting your house ready to sell should be mandatory. 

It’s the final touch that can give your house sparkle and should be done right before staging.

Buyers are going to be walking through your home with a fresh set of eyes. 

They’re going to notice things that you won’t. 

Just like with everything else we’ve discussed, when you’re getting your house ready, the goal is to do things that will eliminate any doubt from prospective buyers’ minds. 

And a house that has been deep cleaned can do that. 

If you have the time and want to put in the work, you can do this yourself. 

But hiring a professional cleaner can save you time and stress, and it can improve your chances of not missing anything.

Here’s a checklist of things that should be cleaned when getting ready to sell.

  • Living room/Family room
    • Clean floors
    • Wipe down baseboards
  • Hallways
    • Clean floors
    • Wipe down baseboards
  • Kitchen 
    • Wipe down countertops
    • Wash/mop floors
    • Wipe down cabinets and drawers
    • Thoroughly clean fridge (wipe down shelving, etc.)
    • Clean microwave
    • Clean oven
  • Bathrooms
    • Wash/mop floors
    • Wipe down countertops
    • Clean mirrors
    • Scrub shower tub and tiles
  • Bedrooms
    • Clean floors
    • Wipe down baseboards
  • Windows
    • Clean inside and outside
    • Wipe down window sills
    • Remove screens and wash
  • Garage
    • Remove debris
    • Sweep
  • Exterior
    • Remove debris
    • Power wash
    • Remove cobwebs, etc. by the front door

Conclusion

Let’s recap…

How to get a house ready to sell

  • Maximize your space
  • Get a home inspection
  • Make repairs and upgrades that pay off
  • Enhance your lighting
  • Paint with neutral colors
  • Boost your curb appeal
  • Deep clean

There are two things that will determine how fast you sell and for how much: the real estate agent you work with and how you optimize your home’s appearance.

That’s why both are key steps when selling a house

Yes, getting your house ready to sell can be exhausting, but if done right, it will pay massive dividends for you in the end. 

Stick to these seven tips and get your home ready in less time and with less stress. 

Knowing which questions to ask a realtor during your first meeting to sell your house is crucial.

Why?

Because the right realtor can not only sell your home faster and make you more money, but they can also make the process much less stressful.

Choose the wrong person and it can be the complete opposite.

But how do you know if you’re hiring the right realtor?

You need to ask the right questions.

And here’s the key…

It’s not just about knowing which questions to ask your realtor.

It’s about getting the right answers.

There’s one question that is so important that, in my opinion, if you don’t get the right answer, don’t hire them.

Let’s get started.

Question #1: How did you arrive at your suggested list price?

Notice that this question isn’t, “What do you think my asking price should be?”

Every realtor will tell you what they think you should list your home for. 

But the “how” is much more important.

Setting the right asking price is key to maximizing your offer price and selling quickly. 

Your home is worth what someone is willing to pay for it, but the list price sets the initial tone.

Set the price too high and you’ll discourage motivated buyers from even visiting. 

Price too low and you could be leaving money on the table.

The purpose of asking a realtor this question is to ensure they are not suggesting an inflated price to secure your business.

Unfortunately, this tactic is not uncommon.

Here’s the thought process for the realtors who do this. Their plan is to:

  • Get you excited about a higher price
  • Sign the listing agreement with you
  • Let the home sit on the market (they know this will happen)
  • Tell you to reduce the price
  • Sell the home at a lower price, but they still get a commission

Want to avoid this happening to you?

Then ask them how they arrived at the price they’re suggesting. 

You’re looking for an answer backed by data.

Let me explain.

During your initial meeting, the realtor should be presenting you with a comparative market analysis (also known as a CMA). 

This is an analysis they put together that compares your property to the best recently sold homes (also known as “comps”).

Realtors who cannot justify their suggested price will usually keep their analysis very vague.

They might show you a few recently sold homes, but they won’t back up their reasoning with how they arrived at the price.

What you want to see is a breakdown of how your house compares to each recently sold home. 

Here’s an example of what this comparison might look like:

 

Adjustments shown on a realtor's comparative market analysis

This type of analysis is what you’ll see on an appraisal report. 

It’s comparing the features and characteristics of your home to the features and characteristics of each recently sold home nearby.

Seeing a breakdown of how they arrived at their recommended asking price will increase the chances that they’re not overpromising. 

If the answer you get is vague and doesn’t include an in-depth explanation, then I would consider this a red flag.

Asking a real estate agent about how they arrived at their suggested list price (and getting the right answer) will give you a sense if you’re working with someone who has the experience, expertise, and integrity you’ll need.

Question#2: Will you also represent the buyer?

This is a great question to ask a real estate agent when selling because their answer will tell you about their integrity.

Can a realtor who is selling a home also represent the buyer?

In most states, yes.

Should they also represent the buyer?

It depends.

Your realtor will play a big role in how much money you make. Negotiating is a big part of this.

A top-selling realtor can literally net you thousands more just by knowing which questions to ask the buyer’s agent and when.

When they also represent the buyer, they cannot negotiate for you.

You can see this in the agreement you’ll sign with them.

Here’s where it says this in the listing agreement used in California.

Dual agency explained in a real estate contract

Why would a real estate agent want to represent the buyer?

Commission.

The total commission you pay when selling your home is usually split 50/50 between your agent and the buyer’s agent.

If your agent also represents the buyer, this means they could make twice as much (you can negotiate this beforehand and see if the total commission will be less if this happens). This is where their integrity can be tested.

A realtor who is willing to risk their integrity for more money can mean a lower sale price. There are many realtors who won’t do this, but some will.

If they tell you they will not represent the buyer, then you have nothing to worry about.

If they say it’s a possibility, it’s not necessarily a bad thing. In fact, if you get an offer that meets or exceeds your expectations, then it could be a great thing.

Your realtor may already be working with a buyer who could be interested in your home. Or a buyer who is interested in your home might not be working with anyone and wants to submit an offer through your realtor.

The point of asking your realtor this question is to test their integrity.

So, if they tell you there’s a possibility that they can also represent the buyer, then ask them this follow up question:

How will you negotiate for me if you’re also representing the buyer?

You already know the answer but the realtor doesn’t know that you do.

The answer you want to hear from them is that they can’t.

Anything else is a red flag and I wouldn’t hire them.

Question #3: How will you market my home?

Marketing is key. It’s what can drive higher demand.

Higher demand means more buyers.

More buyers can mean a higher selling price in a shorter amount of time.

Buying a home is an emotional decision and top agents incorporate emotion into their marketing plan.

When you ask a real estate agent how they’re going to market your home, most will discuss these items:

  • Multiple listing service (also known as “MLS“)
  • Syndication to real estate portals (Zillow, Redfin, Trulia, etc)
  • Staging
  • Property description
  • List price
  • Photos/Video
  • Advertising (flyers, brochures, ads, networking, etc)

Hearing about these is great. You want to know how they’re going to get the word out.

But you want to dive a bit deeper and hear about their specific approach.

What are the selling features of my home?

Every home has selling features.

It doesn’t matter if the home is in great condition or a fixer-upper.

Or if the schools have high scores on greatschools.org or below-average scores.

Top realtors will find positive selling points and will use them when marketing.

For example, the two selling features for a home in need of work could be the following:

  1. Lower price, which means lower monthly payments and lower property taxes
  2. The opportunity for the buyer to add their “own artistic touch”

A good agent will do their homework before meeting with you and should be able to tell you the features they would use as selling points.

Who do you think the buyer for my home will be?

This is a great marketing question to ask a real estate agent.

The type of buyer for any given home can be different depending on the area, property type, price range, selling features, etc.

For example, a buyer for a condo in San Francisco is probably going to be different than a buyer for a single-family residence in a suburban neighborhood.

A buyer for a home listed in a retirement community is going to be different than a home for sale in Downtown Austin.

The answer you’re looking for is something specific.

Of course, your buyer can be anyone, but every home will appeal to a larger demographic more than others.

A generic answer most likely means the agent doesn’t know who they’re selling to.

This doesn’t mean you won’t get a great offer, but it does mean their marketing plan won’t maximize the opportunity.

How do you plan on marketing to those buyers?

When your realtor knows what the selling features are and who the buyer for your home might be, it’s almost certain they’re going to have a plan on how to market to those buyers.

Top realtors excel at this.

The approach used to target a younger audience will be different than an approach used to target an older audience.

An approach used to market a home that needs work will be different than an approach used to market a home in great condition.

Any agent can put your home on the MLS. The best ones will have a plan and use the right marketing channels.

Questions to ask a realtor when selling

The first three questions are the most important because they’ll have the biggest impact on how fast you sell and for how much.

When you work with a realtor who tells you they can’t negotiate for you if they also represent the buyer, then you know there’s a great chance you’re working with someone who has integrity.

Working with a realtor who has a five-star marketing plan and the right data to back up your asking price will dramatically increase your chances of a successful sale.

Here are the other best questions to ask a realtor when selling.

Question #4: How will you vet the buyer?

Want to reduce your chances of having your offer fall through?

Then you need someone who knows how to vet the buyer. 

This is the number one reason why you’ll see a home go back on the market after it was pending. 

There are usually two reasons why this happens:

  1. The buyer wasn’t able to get financing
  2. The buyer backs out during their inspection contingency period

Here’s how a realtor can vet a buyer for financing:

  • Make it a requirement for the buyer to submit their pre-approval letter with the offer
  • Call the loan officer after receiving the offer

A key question a realtor can ask the loan officer is this:

“What’s the buyer’s debt-to-income ratio?”

All lenders have a maximum ratio. If a buyer is not able to obtain financing, this is usually the reason. 

Knowing the buyer’s ratio up front lets you know that the buyer meets this qualification. 

It can also help in negotiating.

If your realtor knows the buyer’s debt-to-income ratio up front, then the buyer’s agent cannot use this as an excuse as to why the buyer can’t come up in price. 

Make sense?

Great. 

A buyer can back out of the sale during the time they have for their inspection contingency

Sometimes there is nothing you or your realtor can do to prevent this. 

But if you want to reduce your chances of this happening, then I suggest two things:

  1. Have inspections completed 
  2. Make sure the buyer is aware of what’s in the inspection reports

After receiving the offer (or sometimes before), your realtor should simply ask the buyer’s agent if they have thoroughly gone through all of the inspections. 

By doing this, it will be very difficult for the buyer to back out of the sale due to something they were already aware of. 

When you sell with a realtor who knows how to vet the buyer, your chances of a successful sale will dramatically increase.

This is why it’s one of 7 key tips for selling your home.

Question #5: What do I need to do to get my home ready?

The appearance of your home will have an effect on how fast you sell and for how much.

A common mistake we see many sellers make is spending too much time and money on things that don’t matter.

The goal is to spend the least amount and only on things that will bring a return on your investment.

If you plan on living in the home while it’s for sale, ask the realtor what items inside your home can stay and which ones should go.

The best real estate agents can walk around your home and immediately provide you with a list of what you need to do to get your home ready to sell.

Question #6: What are the costs?

You probably want to know how much you’re going to walk away with.

The equation to figure this out is simple:

(Selling price – anything owed on the property – closing costs = your net proceeds)

A chunk of the closing costs is going to be the commission.

Depending on your area and price point, the total commission is generally in the 5-6% range and is negotiable.

The total commission is usually split between the seller and buyer’s agents.

There are other closing costs too, such as escrow fees, title fees, and attorney fees (if you live in a state that requires this), but the commissions will be the largest part of your total cost. Here’s an example of the closing costs a seller pays in California.

You can also ask the realtor to provide you with an estimated settlement statement.

This is a one-page document provided by an escrow officer that shows an estimated sale price with the estimated costs.

You’ll get a final settlement statement when the sale closes, which is the document you’ll need when filing your taxes the following year.

Check with your accountant, but usually, all of your closing costs are tax-deductible.

Do these three things to get a really good idea about how much you’ll net from the sale of your home:

  • Ensure your suggested asking price is accurate
  • Get a copy of the estimated settlement statement
  • Check to see the remaining balance of your mortgage

Question #7: How many homes have you sold?

What’s the purpose of asking a realtor this question?

To make sure you’re working with someone who has experience.

Working with someone who has minimal experience is going to drastically reduce your chances of making the most money.

There are many moving parts in a real estate transaction and you want to work with someone who has the experience you’re going to need to maximize your chances of a successful sale.

Ask to see their portfolio of homes sold and when. The more recent, the better.

Some realtors have been in the business for twenty years with a lot of sales under their belt, but the number of homes they’ve sold over the last several years is minimal.

You should aim to work with someone who doesn’t just have the experience, but someone who also has numerous sales over the last several years.

Question #8: Have you sold homes in my area?

This isn’t as important of a question to ask your realtor as it used to be, but there’s a reason why I included it.

Twenty years ago this question was much more important than it is today.

Why?

The Internet.

Today, many buyers search online and are able to find out everything they need to about a neighborhood.

When I say everything, I mean everything…

  • Schools
  • Shopping
  • Proximity to freeways
  • Crime
  • Recent sales

If a real estate agent has sold homes in your area, then they should already be familiar with potential selling points.

But if they haven’t, you shouldn’t cross them off your list.

Most sellers ask this question when interviewing real estate agents because they think it’s a necessity. It’s not.

If the realtor answers this question with “no”, then you want to hear an answer that includes how they plan on getting the information about your neighborhood that they’ll need.

A savvy realtor can browse online and find most, if not all of the information they’ll need in a matter of twenty minutes.

Plus, you’ll be able to tell them what you think the selling points about your area are.

Question #9: What’s your sale to list price ratio?

Any realtor can show you how much they’ve sold homes for.

But you want to see what the original list price of those homes was.

This number is calculated by taking the selling price of all of the homes a realtor has sold and then dividing them by the listing prices of those homes.

For example, if a realtor has an average selling price of $1,000,000 and an average asking price of $950,000, then their sale to list price ratio would be 105%.

You can take this number and compare it to other agents.

Be leery of realtors who have a number that is much lower than others. This may mean they intentionally overpromise on their suggested list price.

In my opinion, anything under 95% can be a red flag.

Question #10: What’s your average days on market?

The average days on market is the number of days from when your home is first listed on the MLS to when you accept an offer (not when the sale is closed).

This can give you a rough idea of how long your home might take to sell (although there are many other factors that can impact this).

Similar to the sale to list price ratio, this is another number you can compare to other realtors.

This is what we do with the realtors who we invite to become partner agents with SoldNest. They must be best-in-class with both of these numbers.

It’s a major red flag if the average days on market for a realtor are considerably higher compared to their peers.

Question #11: What percentage of your listings have fell through?

I particularly like this question because a number that is higher than usual can mean the agent doesn’t do a great job vetting the buyer or helping prepare their clients’ homes as well as they should.

A transaction can fall apart for many reasons, but an agent who has a track record of not having to put their listings back on the market can mean you’re working with a top professional.

For me, anything over 5% is concerning.

Of course, the total number of listings the agent has needs to be factored in.

The more homes they’ve sold, the better this number will represent how well they do their job.

Question #12: Will I be working with anyone else?

Some top realtors have teams. This isn’t a bad thing as it can mean more resources.

But you want to know upfront who you’ll be working with and who will be the main point of contact.

The last thing you want is to not know who you’ll be communicating with.

Question #13: How often will we communicate?

You’re about to embark on a journey.

You don’t just want to know who will be your main point of contact, you want to know how often you’ll be communicating.

Not all transactions are smooth sailing. Sometimes there are bumps in the road.

You want a real estate agent who has no problem discussing the good, the bad, and the ugly.

It’s important they commit to how often they’ll be in touch, no matter how good or bad it’s going.

Conclusion

Let’s recap…

Questions to ask a realtor

  1. How did you arrive at your suggested list price?
  2. Will you also represent the buyer?
  3. How will you market my home?
  4. How will you vet the buyer?
  5. What do I need to do to get my home ready?
  6. What are the costs?
  7. How many homes have you sold?
  8. Have you sold homes in my area?
  9. What’s your sale to list price ratio?
  10. What’s your average days on market?
  11. What percentage of your listings have fell through?
  12. Will I be working with anyone else?
  13. How often will we communicate?

Hiring the right realtor is one of the most important steps when selling a house.

This person can literally make or break your sale.

Ask these questions when interviewing realtors to sell your house and maximize your chances of selling faster and for a higher price.

Remember, it’s not just about knowing which questions to ask.

It’s about getting the right answers.

What does contingent mean?

If you’re asking this question, you need to know more than the meaning.

You need to know how the term “contingent” can have a major impact on your home sale.

Because it can.

It’s the number one reason why a real estate listing will fall through after being under contract.

I’m going to tell you everything you need to know so that you can reduce your chances of this happening to you.

Here’s what you’ll learn:

  1. The meaning of contingent in real estate
  2. Difference between contingent and pending
  3. Most common contingencies (with examples)
  4. How contingencies can ruin a home sale

Let’s dive in.

What does contingent in real estate mean?

Contingent in real estate means that the sale of a home is under contract but includes one or more contingencies.

A contingency is certain criteria in the purchase agreement that needs to be met before the sale can be final. Almost all contingencies in the agreement will be from the buyer, but they can come from the seller too.

Think of contingencies as clauses in the purchase agreement.

When a buyer makes a contingent offer on a house, they’re essentially saying, “I’d like to purchase the property, but I want to make sure some things are finalized on my end before closing the sale.”

Different types of contingencies can be included in a purchase agreement and each of them has a big impact on determining if the sale closes or not.

I’ll tell you how shortly.

An offer on a house that includes one or more contingencies is called a contingent offer.

A non contingent offer on a house means that the buyer did not include any contingencies in their offer.

Imagine you’re selling your home.

Would you rather have a buyer give you an offer that is contingent upon certain conditions being met or an offer without any of these conditions?

Without, right?

This is why you’ll see a lot of non contingent offers in a hot real estate market where buyers are competing with each other.

When a buyer makes a non contingent offer, they need to acknowledge they’re removing all contingencies.

Here’s what that looks like in the California purchase agreement.

non contingent offer on a California purchase agreement

Contingent offers are more common.

When a buyer includes any type of contingency in their offer, they need to remove it before the closing date.

This happens on an addendum to the purchase agreement called a contingency removal form. Here’s what that looks like.

contingency removal form

Contingencies play a big role in real estate.

Here’s why…

The buyer’s good faith deposit is at risk once the buyer removes their contingencies.

Shortly after a purchase agreement is under contract, the buyer will make a deposit to the escrow company. This is referred to as a good faith deposit or an escrow deposit.

The buyer risks losing this deposit to the seller should they want to back out of the sale after removing their contingencies.

From the seller’s point of view, having the buyer remove their contingencies is a big hurdle to cross as it means the buyer is more committed. This is why a non contingent offer on a house is more attractive to a seller.

What’s the difference between contingent and pending?

Contingent on a house means that the property is under contract but some contingencies need to be met before the sale is final. A property that is pending means there are no contingencies.

You’ve probably seen the terms “contingent” or “pending” on a real estate listing.

They look like this.

Contingent and pending houses for sale on Zillow

When you see a house that is pending, it means one of two things:

  1. The buyer submitted an offer with no contingencies.
  2. They made an offer contingent upon certain items but have since removed their contingencies.

The latter is why you’ll see the status of a real estate listing change from “contingent” to “pending”.

When this happens, it means that the seller’s real estate agent received the contingency removal from the buyer.

This is known as a “status change”.

A real estate listing will go through four different “statuses”.

  • Active – The property is currently for sale on the MLS (multiple listing service).
  • Contingent – The seller has accepted an offer but the buyer has not yet removed their contingencies (also referred to as active contingent).
  • Pending – The buyer removed their contingencies.
  • Sold – The sale is final and has recorded in the county where the property resides.

You’ll see the status of a property for sale change after the seller’s agent updates the listing in their local MLS.

Which contingencies can be included in the purchase agreement?

Now that you know what contingent means in real estate, let’s discuss the different types of contingencies you might come across.

The buyer can make their offer contingent upon any type of contingency, but there are four that are more common than others.

  • Inspection contingency
  • Appraisal contingency
  • Loan contingency
  • Home sale contingency

It’s not just the type of contingency that is important, it’s the contingency period too.

A contingency period is the number of days that a buyer has before they need to remove that specific contingency. The lower the number of days is, the more attractive it looks to the seller.

If the buyer doesn’t remove the contingency by the end of the contingency period, then they risk having the seller cancel the purchase agreement.

Inspection contingency

When most people hear of an inspection contingency, they think of a home inspection contingency. While a home inspection is the most common inspection for a buyer, there are other inspections they might want to have done.

Here are a few of the more common ones:

  • Termite
  • Roof
  • Pool
  • Chimney
  • Foundation

An inspection contingency doesn’t mean a buyer is only allowed to do inspections. This contingency period allows them to do any and all due diligence on the property that they want.

Maybe they’re thinking of remodeling and want to bring a contractor out to the property. Or maybe the home has previous structural modifications and they want to check on the permits.

No matter what it is, this is the time for the buyer to finish doing their homework on the property.

What if a seller has inspections done upfront?

A seller has the option to have their inspections completed before marketing their property and putting it on the MLS.

When they do, it not only allows them to know what they might need to have fixed ahead of time, but it also gives prospective buyers more information about the property to help them make a more informed decision about what kind of offer they want to submit.

A good analogy for this is buying a car.

When you go to the dealership and shop for a used car, they’ll usually have a Carfax or something similar. This information is helpful because, without it, buyers may be hesitant about making an offer.

Well, it’s the same thing when buying a house but at a much higher price.

When a seller has inspections completed upfront, it improves the chances of a buyer not making their offer contingent upon any inspections.

Inspection contingency example

Let’s say a buyer made their offer contingent upon inspections.

They included a 14-day inspection contingency and decided to have a home inspection completed.

The buyer’s real estate agent helps coordinate the inspection and the report comes back on day 9. After going through the report with their agent, the buyer feels there are a couple of items that need to be addressed.

In this scenario, the buyer has three choices:

  1. Ask the seller to repair the items
  2. Negotiate with the seller to fix some of the items and/or reduce the sale price
  3. Do nothing and remove their inspection contingency

The location and type of market will affect what the buyer decides to do. In a neutral or buyer’s market, the buyer has more leverage, and sellers are more willing to negotiate or repair the items.

If the buyer wants to ask the seller to repair the items, they need to have their real estate agent send over a repair request.

This request is made on an addendum to the purchase agreement.

Repair requests on a purchase agreement that is contingent

When the seller’s realtor receives this request, the seller can decide whether or not they want to make the repairs.

So in our scenario, let’s say the buyer’s agent sent the repair request on day 11. The seller’s realtor discusses it with the seller and they decide to go ahead and have the items repaired.

When this happens, the inspection contingency will be extended until the work is done. Once the work is completed, the buyer will submit a contingency removal form to the seller and their inspection contingency will be released.

Inspection contingency removal addendum

What if the seller didn’t want to fix the items?

Then the buyer has a decision to make.

They can either try and negotiate to have some of the items repaired or have the work done themselves after the sale closes.

If the contingency removal isn’t submitted by day 14, then the seller has the option to send what’s called a notice to perform. A notice to perform tells the buyer that if they don’t remove their contingencies within a certain number of days (usually 1-2), then the seller can cancel the purchase agreement.

Appraisal contingency

An appraisal contingency is a clause in the purchase agreement that allows the buyer to back out if the appraised value does not meet the purchase price.

The contingency period for an appraisal is the time frame the buyer has to not only have their appraisal completed but more importantly, signed off by their lender’s underwriter.

When a buyer gets a loan, the house is used as collateral, and an appraisal is proof of that collateral. This is why every lender requires an appraisal for a real estate transaction. They want to make sure that the house is worth at least what the buyer is paying for it.

The appraisal is ordered by the buyer’s loan officer shortly after the purchase agreement is ratified. When the appraiser goes out to the property, they are aware of the sale price and will need to justify that price in the appraisal report by comparing the property to recently sold homes (also known as “comps”).

In many purchase transactions, the appraised value will match the sale price. When this happens, the buyer will remove the contingency by submitting an appraisal contingency removal.

However, in some cases, the appraisal comes in lower than the sale price.

According to the latest Confidence Index Survey conducted by the National Association of Realtors, 6% of real estate listings had their purchase agreement terminated and appraisals were the cause for 10% of these.

So what exactly happens when the appraisal is lower than the sale price on a contingent offer?

Let’s find out.

Appraisal contingency example

A buyer and seller have agreed to a sale price of $1,200,000.

The appraisal comes back at $1,150,000.

The buyer has three options:

  1. Renegotiate the price
  2. Pay the difference
  3. Back out of the transaction

In a neutral market or a buyer’s market (more buyers than homes for sale), sometimes the buyer can renegotiate the price.

But remember, they made their offer contingent upon the appraisal. This means they can back out of the transaction (and get their deposit back) if the appraised value does not meet the sale price. And some buyers will do this.

In a competitive market where there’s high demand, many buyers will pay the difference. Here’s where many people get confused; the buyer doesn’t pay the entire difference.

Banks will use the sale price or the appraised value, whichever is lower.

So, in our example, the buyer and seller agreed upon a $1,200,000 purchase price and the appraised value came in at $1,150,000.

This means the lender will lend on the $1,150,000 amount and not $1,200,000. In this scenario, the buyer does not pay the full difference of $50,000.

If the buyer planned on putting 20% down on $1,200,000, that means they planned on a $240,000 down payment.

Since the appraised value came in at $1,150,000, this means the buyer will now need to pay 20% of $1,150,000 (which is $230,000) plus the difference of $50,000. This means that the down payment will now be $280,000.

In other words, if the purchase agreement is contingent upon the appraisal, and the appraisal comes in lower than the sale price, then the buyer will pay 80% of the difference between the appraised value and the sale price, not the entire 100%.

How an appraisal contingency can affect the seller

An appraisal contingency doesn’t just have an impact on the buyer, it affects the seller too.

Let’s say your real estate calls you and says that they’ve received a non contingent offer at a phenomenal price.

You’re ecstatic, right?

Of course.

But wait…

What if the appraisal comes in lower than the sale price and the buyer doesn’t have the funds to pay the difference?

You are either going to have to lower the sale price or cancel the purchase agreement and put the house back on the MLS.

How do you prevent this from happening?

When meeting with realtors to sell your house, you’ll want to make sure they know how to vet an offer. By doing so, they can find out how much money the buyer has.

If the buyer only has enough for their down payment and closing costs, your agent should explain the pros and cons of accepting an offer that includes an appraisal contingency.

Loan contingency

A loan contingency, also known as a mortgage contingency, is a clause in the purchase agreement that allows the buyer to cancel the sale if they are not able to get financing.

The loan contingency period is the time frame a buyer has to make sure they’re fully approved for the loan.

Most buyers will get a pre-approval letter from their lender before they make an offer on a home. A pre-approval letter is a great start but most pre-approval letters are not actual loan approvals.

As soon as the property is under contract, the buyer’s loan officer will send all of the necessary documents to the underwriter to start the underwriting process. Once the underwriter looks over the documents, they’ll decide if they should issue a conditional loan approval or not.

It’s rare for a loan to not get approved if the buyer has a pre-approval letter from a good loan officer, but it does happen. When it does, and if the buyer made their offer contingent upon the loan, then they’re able to back out of the sale and get their deposit back.

In most cases, the buyer will remove their loan contingency after they receive their loan approval. They need to submit their loan contingency removal before the contingency period expires or risk having the seller cancel the purchase agreement.

Sale of home contingency

Many sellers will ask if they should even accept an offer that includes a sale of home contingency.

If you have an experienced and savvy realtor, it can work in your favor. We’ll discuss how, shortly.

When a buyer needs to sell their property before they’re able to purchase a new one, they’ll make an offer contingent upon the sale of their home.

In some states (e.g. California), this is simply known as a home sale contingency and there is one addendum to the purchase agreement.

In other states, there are two different types of  home sale contingencies:

  • Sale and settlement contingencies
  • Settlement contingency

This is what the home sale contingency addendum looks like in California.

Home sale contingency addendum

No matter the state, a home sale contingency operates in a similar capacity.

Sale and settlement contingency

A buyer will include a sale and settlement contingency when the property they’re selling is not yet under contract.

This usually happens when the buyer doesn’t want to be in a time crunch and make an offer on a home after their home is in escrow.

As a seller, getting an offer contingent upon a sale and settlement contingency can seem daunting.

And it can be.

Instead of worrying about one buyer being able to close, you now have to worry about two. Plus, the time to close is going to be much longer than the average sale.

Most sellers who accept an offer with this contingency will do so because their home has been on the MLS for some time.

But if a seller is working with a real estate agent who knows how to negotiate, they can use a sale and settlement contingency to their advantage.

First, the buyer is getting the ideal scenario with this type of offer.

They’re playing it safe and waiting to put their home on the MLS until they have a ratified contract on their new purchase. Plus, they have fewer homes to choose from as many sellers won’t accept an offer contingent upon the sale of their property.

Because of this, the agent should be able to negotiate a higher price.

Second, a sale and settlement contingency allows the seller to accept a backup offer and “kick” the buyer out if they don’t remove their contingency within a certain timeframe (usually 1-3 days).

A great real estate agent will use this to their advantage and market the property accordingly.

What is a kick out clause?

A kick out clause allows the seller to kick the buyer out of the sale if they receive a backup offer that does not include a sale and settlement contingency.

When a seller receives the backup offer, they can notify the buyer and request that they remove the contingency.

If the buyer doesn’t remove it, then the seller can accept the backup offer (buyer gets their deposit back).

Here’s how the language in the California purchase agreement reads for a kick out clause.

Kick out clause in a purchase agreement

As a seller, you want your agent to be aggressive and see if they can attract a better offer.

Sometimes, just changing the status from active to contingent will spark more interest from buyers. When a home has been on the market longer than usual (common for homes that accept a sale and settlement contingency), buyers start to question why.

Once the status has changed, it shows that there was someone else interested and that there’s an opportunity for a new buyer to take advantage.

Settlement contingency

A settlement contingency is when the buyer has a ratified purchase agreement on their current residence but have not yet closed.

This contingency protects the buyer in case their sale falls through.

Many sellers are more receptive to accepting an offer that is contingent upon a settlement contingency as opposed to an offer that is contingent upon a sale and settlement contingency.

Conclusion

Contingencies in real estate can have a big impact on the sale.

Price is almost always most important to both the buyer and seller, but contingencies come in a close second.

They’re the number one reason why the sale of your home might fall through.

This is why knowing which questions to ask a realtor when selling your house is key.

The best ones don’t just excel at negotiating, they know the intricacies of every contingency and how to prevent them from causing a disaster to the sale of your home.

Want to know how much seller closing costs are in California?

If so, you’ve come to the right place.

We’re going to break this down in detail.

First, I’ll outline all of the seller closing costs in California. I’ll also run through examples so you can get an idea of what your estimated cost for each of these might be. 

Then, I’ll show you all of this together so you can see what your total closing costs might look like when selling your home in the Golden State.

By the time we’re done, you’ll be able to get a really good idea of your total estimated costs and how much you might walk away with.

What are the typical closing costs for a seller in California?

The average closing costs for a seller in California can be broken down into six categories:

  • Real estate commissions
  • Escrow fees
  • Title insurance
  • County transfer taxes
  • City transfer taxes
  • Miscellaneous items

Some of these costs are based on the county and city you live in.

Assuming you don’t owe more than what your home is worth, all of your closing costs are paid out of your proceeds, meaning you don’t pay anything out of pocket.

You’ll see these costs toward the end of your estimated closing date on a settlement statement. This is a one-page document detailing the final selling price, your total closing costs, and your net proceeds. 

I’ll show you what this looks like later.

California real estate commission

This is going to be the chunk of your costs. The average total commission most sellers pay in California is five to six percent of the final selling price.

Do you have to pay this amount?

Nope.

Real estate commissions are negotiable.

In fact, there are numerous options to pay lower real estate commissions in California. These include the following:

  • Discount brokerage
  • Flat fee company
  • Selling without a Realtor
  • Negotiating a lower commission with your agent

Just like with many things in life, a lower price can mean you’re sacrificing something else in return. When it comes to selling your home, this usually means you’ll be missing one or more of these:

  • Service
  • Experience
  • Marketing
  • Negotiating

Here’s how the commission works…

Let’s say you list at a five percent total commission. You’re technically paying the five percent commission to the brokerage you list with (this is how it’s worded in the listing agreement).

The total commission is usually split fifty-fifty between the brokerage you hire to sell your home and the brokerage who the buyer’s agent works for.

This is detailed in the listing agreement you’ll sign with your agent.

Here’s an example of what that looks like:

Real estate commission on a California real estate contract

I’m not a CPA, so don’t take this as tax advice, but you should feel pretty confident that all of the real estate commissions are tax deductible. Of course, I would make sure by confirming with your accountant.

Escrow fees In California

Escrow fees will be another part of your closing costs.

You might be asking what the heck are escrow fees and what is an escrow company? I won’t dive into the specifics of what an escrow company does, but here’s the short version:

An escrow company is a neutral third party between the seller and the buyer who holds the money until the sale is final. They are responsible for making sure that the buyer doesn’t receive the property and the seller doesn’t receive payment until everything is executed as agreed upon in the contract.

This isn’t the first thing that usually comes to mind when selling, but it is an important part of the overall closing costs a seller pays in California.

Ok, now that you know what an escrow company is, let’s talk about the escrow fees.

Escrow fees

For providing their services, the escrow company charges a fee. These are usually referred to as “escrow fees” on your settlement statement.

Depending on which county you’re in, you may or may not have to pay this. Each county has a preset “standard” of determining if the buyer or seller pays for this.

This will be detailed in the offer contract you receive from a buyer and is negotiable.

A rough calculation of the cost is $2.00 for every $1,000 of the sales price, plus $250.

So if your home sells for $1,000,000, and you live in a county that requires the seller to pay, you’ll pay an escrow fee of roughly $2,250. Most escrow companies charge around the same amount.

Here are a few examples of who typically pays for the escrow fees in California:

Alameda County  Buyer

Contra Costa    Buyer

El Dorado     Split 50/50

Fresno   Split 50/50

Los Angeles   Split 50/50

Orange  Split 50/50

Riverside   Split 50/50

San Francisco Buyer

San Mateo  Seller

Santa Clara  Seller

Santa Cruz  Split 50/50

Ventura  Split 50/50

What is title insurance?

Title insurance is an insurance policy that protects the buyer from a financial loss due to defects on the title. An example of this is someone claiming ownership of the property after it sold.

It can also protect against liens that might pop up during or after the transaction closes. Sometimes in the process of selling a property, it can turn out that more people have a right to ownership than previously thought. Potential unpaid debt that the seller may have had might also come up after the sale closes. Title insurance works to protect against all of this.

In most real estate transactions, there are two title insurance policies: one that covers the buyer and another that covers the buyer’s lender. If the buyer is obtaining financing, this policy is required.

The policy that covers the buyer is usually referred to as an owner’s title policy. The policy that covers the buyer’s lender is typically called a lender’s policy.

Title insurance cost in California

Unlike escrow fees, there isn’t a set calculation to determine the cost of title insurance.

We’ve found that title companies in California usually charge around the same price. To get an idea of what this is, take the sale price and multiply it by .00225.

For example, if your final selling price is $1,100,000, then the cost for title insurance might be $2,475. The cost can vary depending on your final selling price.

You can use this free title insurance calculator to get a more accurate estimate.

Unless they ask the seller to cover some or all of their closing costs, the buyer will pay for the lender’s policy.

Who pays for the owner’s title policy (the policy that protects the buyer) can also vary by county.

First American Title does a great job breaking down who pays for escrow and title fees in California.

California transfer tax

Part of the closing costs for a seller in California is city and county transfer taxes. These are also referred to as “documentary transfer taxes”.

What exactly is a transfer tax?

Think of it this way. Every time a property changes ownership, the local governments want a piece of the pie.

County transfer taxes

Every county in California has a transfer tax.

The cost of the county transfer tax in California is $1.10 for every $1,000 of the sale price, except for San Francisco County.

So if your house sells for $1,000,000 and your property is not located in San Francisco County, then the county transfer tax would be $1,100.

San Francisco’s transfer taxes operate under its own unique calculation. Here’s how it works…

Example of San Francisco transfer tax as part of the closing costs for a seller

City transfer taxes

Not all cities in California have a transfer tax. For example, in Santa Clara County, the only cities that have a city transfer tax are San Jose, Palo Alto, and Mountain View.

The cost of the city transfer tax in these three cities is $3.30 for every $1,000 of the sale price. On a home that sells for a million dollars, this comes out to $3,300.

The cost for city transfer tax can vary for each city.

Who pays for these documentary transfer taxes?

Similar to the escrow and title fees, it can vary by area. In almost every scenario, the seller will either pay both or these costs will be split fifty-fifty between the buyer and seller.

Miscellaneous Fees

You might see several miscellaneous fees itemized on your settlement statement.

Some of these include the following:

  • Recording fee
  • Notary fee
  • HOA fee (if the property has an HOA)
  • Any reports and/or inspections that are not paid upfront

Ok, as promised, here’s an example of a settlement statement detailing the closing costs for a seller in California.

Example of a seller's settlement statement showing how much the closing costs are in California

You’ll notice on this settlement statement that the seller’s pro-rated amount for their county taxes and mortgage payoff is included. And you’ll see the same on yours.

sample of settlement statement showing prorated taxes and a mortgage payoff as part of the closing costs for a seller in California

These aren’t necessarily costs, but they are itemized with your closing costs on your final settlement statement. 

Conclusion

Now that we’ve gone through each cost you might see as part of the total closing costs, let’s quickly recap…

What are the closing costs for a seller in California?

  • Real estate commissions
  • Escrow fees
  • Title insurance
  • County transfer taxes
  • City transfer taxes
  • Miscellaneous items

How much are seller closing costs in California?

  • Real estate commissions = 5% (can be higher or lower)
  • Escrow fees = $2.00 for every $1,000 of the final sale price + $250
  • Title insurance = sale price x .00225%
  • County transfer tax = $1.10 for every $1,000 of the final sale price
  • City transfer tax = the costs depend on the city you live in
  • Miscellaneous items = varies for each transaction

Selling a home is a big financial transaction.

Educating yourself on your estimated costs is one of the key steps in the home selling process.

Hopefully, this gives you a better idea of what your total costs might look like. If you’d like to see numbers specific to your sale, you can try our California seller closing costs calculator

A real estate transaction is comprised of numerous parties and an escrow company is one of them.

In this post, we’ll quickly run through common phrases and questions related to an escrow company and the role they plan in a real estate transaction.

What is an escrow company?

An escrow company is a neutral third party in a real estate transaction whose primary role is to protect the interests of all parties involved. They’re responsible for making sure the transaction is not final until all terms and conditions in the purchase contract have been met. At a high level, they’re responsible for three things:

  1. Handling the funds between the buyer and seller
  2. Making sure that the buyer doesn’t receive the deed to the property until the conditions in the purchase contract are met
  3. Ensuring the seller doesn’t receive any funds until those same conditions are met and the transaction is closed

Whether you’re selling your home or buying, you can kind of think of an escrow company as the middleman in a real estate transaction.

The buyer’s agent represents the buyer, the seller’s agent represents the seller, and the escrow company is the middleman that makes sure the sale is not final until the conditions and terms in the contract have been met.

What is an escrow officer?

An escrow officer, also known as an escrow agent, is a representative at the escrow company who is assigned to the transaction.

Their role is to only provide escrow services, while not giving any kind of advice to either party. They can objectively discuss the instructions for the closing to take place, but they must remain completely neutral. It’s the escrow officer’s job to make sure all of the T’s are crossed and all of the I’s are dotted.

Is an escrow company the same as a title company?

In short, no, an escrow company is not the same as a title company.

An escrow company is a neutral third party in a real estate transaction that ensures that all conditions and terms in the contract have been met before closing.

A title company handles the transfer of the sale from a legal perspective by ensuring that all rights and interests of a property are in line to proceed with the transfer. A title company also provides title insurance to both parties.

In some parts of the country, the title company is also the escrow company (e.g. Northern California), and in other areas, they are two separate services (Southern California).

Who opens escrow?

The real estate agent will usually open escrow, but technically, it’s the buyer’s or seller’s choice. Whether it’s the buyer, seller, or agent, it depends on the region.

For example, in California, it’s very common for escrow to be opened by the seller’s agent before the home is even on the market. In other parts of the country, it’s common for escrow to be opened by the buyer’s agent after the contract has been ratified.

What is an escrow deposit?

An escrow deposit is the dollar amount the buyer deposits into an escrow account after the seller has accepted their offer. This is also known as a “good faith deposit” or “earnest money deposit”.

These funds are part of the buyer’s down payment. The exact amount to be deposited and when are terms agreed to in the purchase contract.

After the contract is ratified, this is the first big step in a real estate transaction.

Why? Because the buyer’s deposit can be at risk once they remove their contingencies.

How long is escrow?

The length of the escrow can be as little as two days to as many as several months. A common term for this is “estimated days to close” and the exact timeframe is agreed to between the buyer and seller.

An escrow that is a couple of days to a couple of weeks is usually a buyer who is paying all cash. If the buyer is receiving financing, the escrow will usually be a few weeks to a couple of months.

What does closing escrow mean?

Closing escrow is another phrase for the closing of the real estate transaction. You’ll start to hear this phrase toward the last week or so of the estimated closing date.

The closing process consists of both the buyer and seller signing their final documents, the buyer conducting their final walk-through, the lender looking over the buyer’s final signed documents, and more.

Conclusion

Whether you’re buying or selling, an escrow company will be a party involved in your real estate transaction. Knowing what role they’ll play and how they’re involved will help make things clearer as you navigate toward completing your sale.