✏️ Editor’s Note: Realtor Associations, agents, and MLS’ have started implementing changes related to the NAR’s $418 million settlement. While home-sellers will likely save thousands in commission, compliance and litigation risks have significantly increased for sellers throughout the nation. Learn how NAR’s settlement affects home sellers.
Though 2023 is a slowing housing market, the sale-to-list price ratio stands firm at 98.9%. But, from Seattle to Austin, home prices in several metros are declining, the biggest drop being 47% in Sacramento. The rising mortgage rates can decrease home prices further, and you might have to settle for a lower selling price. So, if you are ready to sell your house, start now.
📉 Housing Market Update
- Median Home Sale Price Drop YoY: The median home sale price dropped to $364,366, down by 2.3% YoY, the biggest decline in more than a decade.
- Fewer Buyers are Applying for Mortgages: Mortgage purchase applications were down by 31% YoY. Due to expensive financing, fewer buyers are applying for mortgages.
- iBuyers are No More a Viable Option: Several iBuyers have either shut down or are suffering massive losses. As per our research, most iBuyers are not offering more than 70% of a property’s Fair Market Value.
- Bottom Line: In 2023, more sellers are opting to sell their homes by owner. By listing on the MLS with the best FSBO sites, your home gets maximum exposure, and you save thousands of dollars in commissions.
We have broken down the important steps in selling a house, so you can attract more buyers and sell for the best price.
Step 1: Determine How You Want to Sell Your House
How you choose to sell will determine all other aspects of selling your house. These include the home selling costs, marketing strategy, the level of preparation you need, etc.
Home sellers are no longer required to work with only 3% commission realtors to list and sell their houses. You have options now – MLS listing services, discount brokers, FSBO sites, etc. – who work at lower rates. Weigh the pros and cons of each option before you choose one.
- Sell With a Discount Broker: A discount real estate broker offers all the services similar to a traditional broker at discounted rates. Discount brokers charge a 1.5%-2% commission or a $3,000-$5,000 flat rate. They will help you with everything, from listing to closing, and offer decent savings.
- Sell Your Property For Sale By Owner: You can sell your home without a Realtor, independently. You will save the entire 3% listing commission but won’t get MLS access. You can list your home on For Sale By Owner websites. The best FSBO sites leverage technology to get you listed and connect you with potential buyers directly.
- Sell With a Traditional Realtor: We do not recommend working with a traditional Realtor. They charge a 5%-6% commission and control most aspects of the transaction. However, if you need guidance at every step, work with Realtors in your area who have expertise in the local housing market.
- Offer Your Home to a Cash Buyer: You can sell your home “as is” in poor condition to a cash buyer. Cash home buyers offer 30% to 50% of the Fair Market Value and offer flexible closing timelines.
✍️ Pro Tip: Offer your home to an iBuyer if your house is in good condition. iBuyers offer up to 70% of the Fair Market Value and make instant cash offers.
Step 2: Set a Realistic Listing Price
The listing or the asking price is the most important factor for a successful home sale. Typically, your real estate broker will run comps and help you arrive at an asking price. However, in an FSBO sale, you can use online tools like Zestimate to determine the asking price for your home.
Do not overprice your home. If you do, your home will spend more days on the market, and buyers may make negative assumptions about it.
On the other hand, underpricing can be a good strategy. Remember, the listing price is not equal to the sale price. The purpose of the listing price is to attract buyers for your home.
You can set the asking price at the lowest price acceptable to you. You might get multiple offers which may lead to a bidding war among buyers. Bidding wars can help you sell at a price higher than what you had in mind. Refer to this informative guide on how to price your home for sale for more such strategies.
Step 3: Market Your Home
A good marketing strategy will help you attract more potential buyers. You can work with a broker to market your home or do it yourself. Here are a few marketing tips that can increase your home sale value substantially:
- Stage Your Home: You can sell your home for up to $40,000 more by staging it. You can either DIY it or work with home staging companies. They will rearrange the interiors of your house to make it look spacious and presentable.
- Hire a Real Estate Photographer: With professional real estate photography, you could sell your home 32% faster. Professionally clicked pictures will make your property listing pop. It will also help you to market your home to 90% of buyers who search for properties online.
- List on MLS: With an MLS listing, you can sell faster and for up to 17% more. Your property listing will also get syndicated to 100+ real estate websites. But, only licensed real estate agents have access to the MLS. They charge a 3% commission which can burn a hole in your pocket. You can list on the MLS with a Flat Fee MLS company like Houzeo. Houzeo will get you listed for $379, and that too within 48 hours.
- List on Free FSBO Websites: Several FSBO sites allow you to list your home on their website for free. Your property can attract buyer traffic that visits a particular FSBO website. Some examples of free FSBO listing websites include Craigslist, Zillow, ForSaleByOwner.com, etc. However, you may attract unverified buyers or scammers as well.
- Post a Yard Sign: With a yard sign, you can attract unrepresented buyers and save the buyer agent commission. Ensure you get a yard sign with your phone number so that the buyers can contact you directly.
- Host Open Houses: In a hot market like Austin or Miami, an open house can be a great way of showing your property to home buyers. Also, you can attract unrepresented buyers.
Step 4: Show Your Home to Potential Buyers
Showings are essential when selling a property. The more the number of buyers touring your home, the greater the chances of you getting an offer. But this doesn’t mean showings should be inconvenient for you. You can use an online showings management tool like Houzeo Showings.
Houzeo Showings allows you to schedule slots for buyers to tour your house. Home buyers can also request and reschedule or cancel showings.
Step 5: Negotiate Offers
Interested buyers will send written offers to your agent or directly to you, in case of an FSBO sale. In a seller’s market, buyers might make offers above the list price. But, experts predict 2023 to be a buyer’s market. So, be open to negotiations.
As a seller, you can accept, reject, or counter an offer. A counteroffer is a way of negotiating an offer for better terms or prices. It should be in written format and must have a set timeframe for the buyers to respond. In the counteroffer, you can offer seller concessions, repair credits, etc., in exchange for selling at the list price.
In case of multiple offers, weigh all of them across various merits and do not accept the highest bid right away. You may want to consider the following before accepting an offer amongst multiple offers:
- Mode of payment (cash vs financing)
- Home buyer’s mortgage approval status (pre-approval vs pre-qualified)
- Buyer’s willingness to cover the closing costs or some part of it
- Buyer’s willingness to bypass some contingencies like a home appraisal, home inspection, etc.
- Closing timeline
In a traditional home sale, a real estate professional will negotiate for you. However, as an FSBO seller, you are on your own. In such a situation, you can use digital offer management tools like Houzeo Offers. With Houzeo Offers, you can counter an offer, call for the highest and the best offer, and more.
Step 6: Close the Sale
After the seller accepts an offer, the MLS listing status is changed to “house under contract“. You and the buyer have to complete a lot of tasks from contract to closing. Here are the key milestones in the closing process:
Allow the Buyer to Complete the Due Diligence
After you accept an offer, your property goes off the market, and the buyer can perform the necessary due diligence. The buyer inspects their to-be-home to proceed with the purchase.
Post due diligence, the buyer works on securing a mortgage, known as the underwriting period. During this period, the lender verifies the buyer’s finances and inspects and appraises the property. An amount equivalent to the property’s appraised value is sanctioned to the buyer.
Pay the Closing Costs
As a seller, you will pay 5%-6% in real estate commissions, equally split between your and the buyer’s agent. Additional seller closing costs that you may have to incur include:
- The escrow or the title fee
- Transfer tax
- Capital gains tax
- Outstanding HOA dues
- Real estate attorney fees
- Seller credits (if you have offered any).
Sign the Escrow and Title Documents
This is the final step in the process of selling a house. Here, you sign the escrow and title documents. Additionally, you sign the deed and closing disclosure. Ensure you bring two valid ID proofs at the signing.
After the close of the escrow, the new homeowner’s details are registered in the public records. You receive a wire transfer or a check for the final home sale price, and the sale is complete.
Final Word
Experts predict the real estate market will slow down in 2023. But, even in this slowing market, sale to list price ratio stands firm at 98.9%. So, the picture isn’t as grim as you might think. If you want to sell your house, now is a good time.
Get on the MLS with a Flat Fee Realtor or a Flat Fee MLS company like Houzeo. With Houzeo, your home will be listed for $379 within 48 hours. Read Houzeo reviews to know what home sellers across America say about Houzeo.
FAQs
1. Should you sell your home for cash?
It depends on the situation. If you want quick cash and don't mind selling for 50% to 70% of the fair market value, selling a house for cash can be a good option. However, if you have enough time, going via the traditional route is better as you can get more money.
2. Can you sell a house with a mortgage?
Yes, you can sell a house with a mortgage. You can use the net proceeds from the home sale to pay off the existing mortgage. You can also pay other costs associated with selling a house.
3. Can I sell my house without a Realtor?
Yes, you can sell your house without a Realtor. List your home with a Flat Fee MLS company like Houzeo. Flat Fee MLS companies usually get you listed within 48 hours, or in most cases, even faster. You can manage other aspects of the home selling process using Houzeo tools like Houzeo Showings, Houzeo Offers, and more. With a Flat Fee MLS listing, you will sell fast and save thousands in real estate commissions. Check out our rankings for the top Flat Fee MLS companies in the US.
4. Who pays a commission when selling a house?
Typically, a home seller pays a 5% to 6% real estate commission when selling a house. However, the seller accounts for the commission fee in the selling amount. So, indirectly the buyer ends up paying the real estate commission. The 6% commission is split equally between the buyer and the seller agents. Check out our detailed blog on how real estate commissions work.
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