To sell your home for the most money, it’s best to understand local trends in your market, the total cost of selling a home, and the best method of selling to meet your goals. The highest offer won’t always leave you with the most money, and you won’t always recoup the costs of major renovations.
Understand your local market
When there’s more homes for sale than there are buyers, it usually brings prices down as sellers compete for fewer buyers. We often call this a buyers’ market. On the other hand, when there’s more buyers than there are homes for sale, it tends to drive prices up as buyers compete for fewer homes. We call this a sellers’ market.
A good way to gauge whether you’re in a buyers’ or sellers’ market is to look at the average Days on Market for similar homes in your area. DOM is a real estate statistic that shows how long homes are actively listed on the market. If similar homes to yours are selling faster than the average DOM for your area, then it can suggest strong demand.
You may also want to look at the rate of home price appreciation for homes in your market. Home price appreciation shows how fast home prices are rising; a steep increase can signal that buyers are paying more.
These trends will impact how you price your home and your ability to negotiate things like repairs and offer contingencies. They can also give you insight into how long it will take to sell your home, which can impact your costs. Explore market trends in your neighborhood or read our in-depth guide on today’s housing market.
Choose the right time to sell
Home sales ebb and flow with the seasons. Spring typically brings the most buyers because many people want to move during the warmer months when the kids are out of school. While seasonal trends vary by market, they aren’t the only factor to consider when thinking about “the right time to sell”.
To sell your home for the most money, it can be helpful to sell at a time when you have enough equity in your home to pay off your current mortgage, the costs of selling, and the costs of moving. Otherwise, you’ll need to cover many of these expenses out of your own pocket. According to recent data from Bankrate:
Most homeowners do not build enough equity in their home to offset buying, closing, and moving costs until they’ve been in their home for around five years.
Timing your sale to receive a higher price may also conflict with other life priorities like moving for a new job, helping aging family members, or starting a family of your own. For example, if you time the sale of your home for the peak selling season but miss a major job opportunity as a consequence, that could actually have a worse financial impact.
Set the right price
If you overprice you’re home, then you risk having to drop the price, taking longer to sell, or making it harder for buyers to discover your listing. Over time, buyers can become skeptical of homes where the list price is continually declining, suggesting that there is something wrong with the home or that the seller has unrealistic expectations. This can limit your negotiating power because buyers might perceive the trend as a sign your home should be discounted.
According to Homelight, most buyers also search using a price range so if you price your home beyond what a reasonable person would pay, you make your home harder to discover.
Finally, taking longer to sell can have broader financial consequences, especially if there’s pressure to move within a shorter time frame. For example, even if you’re able to sell at a desirable price, you can incur housing overlap costs like paying a double mortgage, storage fees, and renting temporary housing. You may also miss out on a good buying opportunity.
When pricing your home, a good place to start is our home value tool, which uses the latest market data for comparable homes. Alternatively, you can request an all-cash offer from us. We calculate your home value based on the information you provide about your home, current market trends, and data from hundreds of recent comparable home sales. Requesting an offer is free, and there’s no obligation to accept.
Understand how much it really costs to sell a home
When selling a home, it’s easy to fixate on the 5-6% that’s typically paid in real estate agent commissions. However, when you factor in all the other expenses—closing costs, seller concessions, maintenance and repairs, moving and home overlap costs—the total cost of selling can reach closer to 10% of the sale price.
Some of the costs are harder to control like agent commissions and closing costs. However, you have more influence over how you prepare your home for sale and how you negotiate the sale; we’ll dive deeper into those topics in the sections below. The point is having a full picture of your costs allows you to set a budget and identify opportunities to create savings.
Determine how you’re going to sell
Most people are familiar with the traditional real estate process: preparing your home for sale, finding an agent, listing your home, showing your home, negotiating with a buyer, and then finally closing the deal. However, there are other methods to maximize your proceeds, like for-sale-by-owner (FSBO) and selling to an iBuyer.
In an FSBO sale, you would essentially take on all of the responsibilities of a real estate agent. By doing this you can avoid paying the listing agents commission, but if your buyer is represented by an agent, you’ll likely need to pay the buyer’s agent commission. You can learn more about commissions in our guide to selling a home. Unless you’re a seasoned real estate professional, an FSBO sale can be a complicated undertaking that may do more harm than good.
As an alternative, consider selling to an iBuyer. iBuyers use technology to quickly make an offer on your home. If you accept, they purchase your home and assume the costs of finding a buyer.
Consider minor renovations that add value at minimal cost
Not all home improvement projects are created equally. For example, a finished basement in Portland is 5x more valuable than finishing a basement in Atlanta, a roughly 13% increase on the median home value versus 2.5% respectively.
The impact of a project or upgrade varies based on the market you’re in, and you’re existing home value. Some projects like adding a pool or wood floors tend to have bigger increases for more expensive homes, while projects like a kitchen remodel or adding a full bathroom tend to have a bigger increase for less expensive homes.
Source: Opendoor