I’m a licensed agent in Colorado, who’s been buying and selling houses since Brandon Turner was a baby.
Let’s talk about selling your home.
THE prime real estate selling season is just around the corner. While investors are always on the lookout for a great deal, these next few months are when the most owner-occupant buyers are out looking for their next home. It’s also when the most houses are on the market and the most sales are made.
In fact, May is the best month to sell a home, according to an ATTOM Data Solutions analysis of home sales from 2011 to 2017. Homeowners selling in May realized the biggest premiums above estimated market value of any month—5.9 percent on average!
And the best day of the year to sell a home is June 28, with an average seller premium of 9.1 percent, according to the analysis.
Now, what does this mean to you? It means now is the time for you to get your house ready to list in order to capitalize on the best time of year to sell.
Maybe you want to take advantage of the appreciation you’ve realized in recent years. Maybe you’ve looked over your portfolio and want to get rid of the “dogs.”
Whatever your reason, you definitely want to get top dollar for your property, right?
I’m going to help you get there.
Related: Want to Sell Your Home Smoothly, Quickly & for More Money? This Book is for You!
First off, what type of property are you trying to sell? Is this a primary residence or a rental?
The sales process is pretty much the same for both types. In order to get top dollar, you need to present a modern home that’s clean, staged, and ready to move in.
But just because your property may not fit into all those categories doesn’t mean you can’t still sell it—or get top dollar for the condition it is in.
A little upfront work can make a HUGE difference in your bottom line. I can’t tell you how many absolutely disgusting properties I’ve been inside as an agent and investor.
When I was a kid, my mother trained me to take my shoes off when entering a home. It’s a habit I’ve had since I was 12. But only a few short months of viewing houses as a new agent broke me of that habit after I stepped into some unidentifiable goo. Gross!
Don’t be that seller. Unless you’re selling a 500-unit apartment building, you’re going to have potential buyers walking through your property before they buy it. If it’s your own personal home, there is absolutely no excuse for filth and clutter.
Give yourself a few weeks to pack up extra stuff before you list your home. You’re moving anyway, so if you start now, you’ll be ahead of the game once you get an offer.
Go through every cabinet, every closet, every bathroom, every bedroom. Pull out your best Marie Kondo impersonation, and toss out anything that doesn’t spark joy.
Pack up everything you’re not going to need in the next three months. Aim for a sparse aesthetic of minimalism. The more stuff in the property, the smaller it looks.
After you’ve decluttered and packed, have a good friend come over and smell your house. This sounds weird—but hear me out!
Every house has a smell. Conveniently, if you live in that house, you can’t smell it. But potential buyers can, and if it’s unpleasant, they will walk out and never come back.
So, bring in a good friend who will tell you honestly what your house smells like.
I know that at some point in your life, you’ve walked into a house where cats live. And most likely, you knew—immediately—that cats lived there.
Why? Because it smelled like cat. Which, despite what you may think, is not a pretty smell.
I’m not anti-cat. Don’t write me hate mail. But I am anti-cat-smelling houses. And you know who else feels the same? Most buyers.
Come to think of it, most buyers are anti-anything-smelling houses. So, get your friends to come over and give you an honest assessment of what your house smells like to them.
If they describe it as smelling anything other than fresh or amazing, do something about it. And don’t just cover it up with sprays!
Clean your air with an ozonator. You can rent them at your local home improvement store.
You may also want to have your HVAC system cleaned out, as smells linger there, too.
While we’re on the subject of pets, start thinking about what you’re going to do with your pets during showings. Having a trusted neighbor or pet sitter come get them beforehand and keeping them away from the home during the entire visit is the best choice. Buyers don’t want to be uncomfortable; they’ll just leave the house.
Don’t give them any reasons to leave.
I once walked into a house that had five GIANT black labs. Actually, scratch that. I opened the door, saw them, then fled.
I was an unknown person to these dogs, walking into their space without their owner. No way was I sticking around to find out if they were friendly.
And with so many houses on the market, we never went back to that one.
Guess what else buyers do not want to see? Your reptiles.
Again, don’t send me hate mail. But if you’ve got a 12-foot python in a cage at your house (and please, for the love of all that is holy, have your 12-foot python in a cage) buyers will not be impressed. They will be freaked out, and they will leave.
To reiterate, don’t give your buyers reasons to leave! The whole point of you listing your home to sell is to sell it. Make your buyers want to stay. Show them how they can fit seamlessly into your home by presenting a clean, fresh-smelling property with no animals to distract them from the house itself.
OK, those tips are great for selling an owner-occupied property—and they’re just as valid when you’re selling an investment property. However, you have less control over your property’s appearance if tenants are living in it when you’re trying to sell.
Take a hard look at your tenants and what condition they keep your property in. If they’re great and the property looks nice, consider listing before their lease is up.
Also, consider offering incentives for accepting showings, which are a disruption to their lives—not as much to yours. Rent credits for each showing are a great idea, as are gift cards to local restaurants or a movie theater.
In addition, offer to send a cleaning crew to make the property really shine before the listing pictures are taken.
However, if your tenants are slobs, it may be better to wait until their lease expires and they move out.
You can’t change a leopard’s spots, so if you have the ability to wait to sell, I highly recommend it. Sloppy tenants make the property look worse, and subsequently, you sell for less.
Now, I know I spent a lot of time on the condition of the home. I did so because that is what’s important: looks.
You never get a second chance to make a first impression. If you’re selling a single family home, a condo, or a townhouse, there’s a good chance that your buyer is looking to live in the property after closing.
Even a small multifamily can be appealing to an owner-occupant.
In fact, that’s another good reason to wait to list until the tenant is out: It opens up your property to owner-occupant buyers, as well as investor buyers.
The bottom line is choosing to sell a tenanted property is a decision you’ll need to make on your own, based on the specific circumstances surrounding your tenants.
Related: 4 Things You Should Never Tell Your Tenants When Selling Income Property
Next, let’s look at any improvements you’ve made to the property. If you’re listing a property significantly higher than the amount you paid for it—especially if you purchased it recently—you are going to want to make a list of all the improvements you’ve made. This is extra important if those improvements aren’t visible.
Things like upgraded plumbing and increased electrical service are valuable to potential buyers, but they’re not sexy like a brand new kitchen. And they’re certainly not as noticeable.
Make sure your buyers are wowed with your upgrades! Make a list, print it out on a nice piece of paper, and put it in a picture frame in the kitchen so buyers see it (but don’t take it with them).
OK, now here’s a piece of advice that goes counter to what most agents say. Give your potential buyer every reason to say no to your house before they make a listing appointment.
Most agents tell you to get as many people through the door as possible, but yes, I’m actually telling you the opposite. Why? Because a showing, particularly when you have a property with tenants, is a big hassle.
You only want people coming to your house who are interested in that property. How do you do that? Two ways:
One last note about your listing. Ask your agent if your property is being listed on the closest MLS to the property. I live in Colorado, and Northern Colorado has its own MLS, separate from Denver.
A property in my city that typically would be covered by the Northern Colorado MLS was listed on the Denver MLS last September. It sat, and sat, and sat.
The seller even dropped the price by $50,000, and it still sat. Not listing a property on the system that covers the city in which it is located can end up costing a seller tens of thousands of dollars—maybe even hundreds of thousands of dollars.
I did a little research, and the property I mentioned, while a bit run down, is in an excellent location and probably could have been listed and sold for at least $100,000 more than they started off asking.
Buyers have no imagination. When selling to an investor, it’s less of an issue. But keep in mind that you are trying to appeal to the widest group possible (and that includes owner-occupants).
Owner-occupant buyers cannot see what isn’t there. If your property has weird spaces, show your buyers how those spaces can be used.
Got an odd corner? Adding a chair, table, and a few books turns it into a reading nook.
Teeny bedroom? A crib, rocking chair, and a few toys make that space perfect for a baby. Or a set of small shelves, a small desk, and a chair turn it into an office or study.
Search Pinterest for home staging ideas to make your unique spaces shine!
This is the part that no one wants to talk about: disclosing known issues with the house.
“I won’t be able to get top dollar if I tell everyone what’s wrong with the property, right?”
Here’s the thing, the disclosure actually protects you down the road.
First off, you are required to disclose any material defects. A quick way to think of a material defect is one that costs a lot of money to repair or affects the structural integrity or habitability of the home. Mold, meth, foundation issues, things like that are material defects.
If a buyer discovers that you knew about these issues and did not disclose, that can have pretty big financial consequences for you. But the law doesn’t stop there. Not only are you on the hook for things you know about, but you’re also on the hook for things you should have known.
Even if it’s not a material defect, if you know, you should disclose. When you’re selling an investment property, you don’t always know about the issues with the home, especially if you’ve never lived there.
But anything you are aware of should be disclosed in writing. This way, the buyers are informed. So, if they choose to still buy the home and experience any issues down the road, they have little recourse against you.
Plus, it’s the right thing to do. You wouldn’t want to buy a house without all the available information, would you?
Let’s talk about the offer now. You’ve listed it on the MLS, you’ve staged it, and now you’ve received an offer. Hopefully your agent has sent an email or called all other agents who have shown the house to let them know there is an offer and to see if they’d like to make a competing offer. More offers means a potential bidding war, which benefits you, the seller.
It’s a good idea to double check with your agent to make sure they did this. If they haven’t, encourage them to do so.
Read the offer very carefully. Don’t just focus on the dollar amount offered; read through the entire offer and decipher what they’re truly offering.
If the buyer is asking you to pay closing costs, give concessions, or otherwise foot bills that aren’t your responsibility, work with your agent to deduct these costs from the offer price to get a true idea of the amount you’re actually being offered. Some costs are traditionally seller-paid, like the previous year’s taxes.
If you’re not an experienced seller, you won’t know when the buyer asks you to pay for things that aren’t your responsibility. This is especially important when you receive more than one offer. Don’t get distracted by a higher offer price that ends up netting you less because of concessions.
When selling your home, you want to get the highest price. And there’s so much more to it than I can cover here. That’s why I wrote a book called How to Sell Your Home: The Essential Guide to a Fast, Stress-Free and Profitable Sale.
In the book are topics I didn’t cover today, such as how to find a real estate agent, different listing options, contingencies, and more. Pick it up today!
Do you have tips and tricks for selling to add?
Share in a comment below!
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.