In 2021, it was an all-out seller’s market, and chaotic real estate sales became the norm: offers before showings began, seller’s agents trying to facilitate crowded open houses like
3 Things You Need to Do Before You Sell
Dated: March 5 2022
This is the first article in the Seller’s Guide Series. The goal of this series is to walk you through the selling process so that you know what to expect and so that you can sell your home for the best possible price. This series is beneficial whether you are selling a home for the first time or whether you’ve been through the process and need a refresher.
As the saying goes, life is a journey. On that journey, everyone experiences transitions that may take them to new places, mentally and physically. I’ll cut to the chase — sometimes you have to move. If you want to have an ideal selling experience, there are three very important boxes you need to check before you put your home on the market.
#1 Make sure you are financially and emotionally ready to sell your home
At the very least, you should have enough equity to pay off your current mortgage at closing. If this can’t be done, you may find yourself in a tricky situation like a short sale that will affect your ability to buy another home. As long as you have made consistent mortgage payments and housing prices have appreciated normally, you should be able to eliminate your current mortgage at closing. Ideally, you’ll want a mortgage payoff and enough profit on the sale to make a 20% down payment on your next home.
You could be all set financially and still face some difficulty pulling the trigger on selling.
In my Buyer’s Guide article on being ready to buy, I talk about a couple I once met who wanted to sell in the future and permanently move to their smaller, second home. Their emotional roadblock was that they were overwhelmed with all of the stuff they had in their current house. Before you list your home, you must have a game plan for what is happening to all of your possessions. If you need to store, sell, donate, or pitch items, make a plan to do so as soon as possible.
Sometimes, sellers will make items negotiable with the sale of the home if they won’t be able to take it with them. I once saw a seller offering his speedboat to the next buyer (now that’s an incentive!). Please keep in mind that depending on the value and quantity of negotiable possessions, it may be wiser to privately sell these items to the buyer after closing to avoid mortgage complications.
Having a home that you love is a wonderful thing that many people take for granted. I know I sure have. When you have spent so much time creating memories in your haven, saying goodbye can be tough.
Moving often has nothing to do with your home itself. When our lives take us to new physical places, it is a shame we can’t pick our homes right up and take them along. I still feel this way about my first home. The longer I lived there, the more I loved it and the more beautiful it became to me. However, I had great motivation to move, and that allowed me to move on more easily. It's natural to feel attached. Just make sure you are committed to following through with the sale --- sellers get cold feet too!
As a Realtor, I have seen many sellers become emotional at the closing table. It is so heartwarming to see what I describe as the sellers transferring their love of the home to the new buyers who are so ready to love the home too by taking care of it and making more happy memories.
#2 Identify and complete any needed repairs
Before you pick up a sledgehammer to start that bathroom demo, you’ll need to organize your home improvements into categories.
Need to Do vs. Nice to Do
We’ll first look at Need to Do. Any minor repairs such as fixing a broken light switch, recaulking your tub, or touching up peeling paint will almost always be worth doing. Do not let potential buyers think you are lazy because you neglected touch-ups that would have taken you a day or two to complete. These are worth your time.
Major renovations that need to be done fall into a gray area. Deciding if and how to complete are highly context dependent. You may need to move before you get the chance to finish the other half of your basement. If you never brought your home into this century, you are better off leaving a whole house upgrade to the new buyers who will be living there for the next x years. After all, they will tour your home and either have their own renovation vision, or they will want to preserve its retro style.
On the flip side, if you have been updating your home over the years and left a guest bathroom for last, it does make sense to complete this project if you have time. This will bring the entire house into that updated status, and buyers will most likely be willing to pay more for not having to do the work themselves.
Again, focus on renovations that add value. Installing a pool is not going to sell your house like an extra bedroom or bathroom will.
If your home is somewhere in between updated and outdated, consult a REALTOR® on what course of action will be the most beneficial for you.
Nice to Do. These are minor improvements that are not necessary but can add more value to your property. Some examples include:
- putting in a new toilet
- installing a new dishwasher or other appliance
- applying a fresh coat of paint to your walls
- restaining or touching up a deck
- sprucing up or adding to your landscaping
The real value of these additions depends on the market and the overall condition of your home. If you’re moving from a hot neighborhood in a seller’s market, the value of smaller upgrades will be less than if you’re using them to attract buyers to a less desirable property. Again, this is where the advice of an agent is extremely valuable.
#3 Know where you’re going next
Before you call a REALTOR® and put your home on the market, you need to make sure your next home is secured.
I’ve talked to sellers who have second homes that they’ve decided to move to permanently. Maybe you have decided to transition to renting either permanently or temporarily. Or maybe, you’ve found your next dream home.
Many people find the thought of trying to buy and sell a house at the same time a bit daunting. First of all, take comfort in the fact that this is done all the time! Secondly, I have helped sellers accomplish this, and will give you a detailed guide on the different ways you can buy and sell simultaneously in an upcoming article (stay tuned!)
Why is it so important to have this nailed down? Why can’t you just figure it out along the way? I’ll give you an example. Let’s say you want to put your home up for sale, but you haven’t secured your next home. Your agent has to let prospective buyers know that the sale of your home is “subject to sellers finding suitable housing.”
Naturally, interested buyers are going to want to know exactly where you are in finding that housing. If you’re already under contract to buy another house and well on your way to closing, most buyers will feel confident enough to put in an offer.
On the other hand, if you have barely started your suitable housing search, buyers should and will be wary of going under contract with you. After all, they don’t know what you will consider “suitable housing” or how long it might take you to house-hunt.
A smart buyer may still submit an offer but give you a defined amount of time to secure your own home before they have the right to back out of the contract.
It is in everyone’s best interest to avoid uncertainty by getting your ducks in a row before that “for sale” sign goes up. You should either be under contract for a new home, have a lease signed, or be in the process of moving in with family/friends. Buyers want commitment just as much as sellers.
Whether you are selling for the first time or have been through the process before, each seller's situation and needs are unique. Having a REALTOR® who takes the time to understand these needs is essential. Your agent will manage the selling process and make your experience easier. If you have any questions about selling a home, or if you want to know the value of your property, please contact me today. I am happy to serve you.
I first became interested in real estate after graduating college and buying my first house in Louisville. By the time I moved, I gained an appreciation for homeownership and the real estate process. ....