Figuring out how to sell your home for more money is a pinnacle goal for many people following years of diligent and responsible homeownership. Thankfully you have the full force of a robust housing market behind you.
According to leading real estate analytics company Black Knight, home values have appreciated at a 25-year average of 3.9% annually up through 2019. Recently, a pandemic-driven housing boom has fueled even faster growth in the market, with some areas seeing double-digit yearly price gains.
However, that’s not to say you should sit back, relax, and expect strong offers to land in your lap like magic. In fact, there’s a lot you can do to refine your home-selling strategy toward maximizing value.
Harnessing expert guidance and data-backed recommendations, we’ve put together these 7 ways to fetch a higher return on the most important sale of a lifetime. By analyzing it from every angle — such as how to make effective home improvements, find the right agent, and nail your home presentation — you’ll walk away from the sale confident that you haven’t left any stone unturned.
1. Find an agent with a track record of selling homes for more.
One of the main ways to fetch a higher price for your home is to work with a top agent in your market who has a history of selling houses for more than their peers. It sounds obvious once you hear it, and yet it’s a step that so many people overlook.
Crazily enough, 77% of sellers hire the first agent they meet with, according to 2020 data from the National Association of Realtors, and 67% of sellers go with an agent just because a friend or family member referred them. There’s nothing wrong with a personal referral, but what it often lacks is a critical evaluation of an agent’s track record and whether their skills truly align with your individual property and selling goals.
At HomeLight, we’ve found that the right agent can make a serious difference to your bottom line. Our data shows that the top 5% of real estate agents across the U.S. sell homes for as much as 10% more than the average real estate agent. When your main objective is to maximize the value of your home, you should look for an agent with these qualities:
High sale-to-list price ratio:
The sale-to-list price ratio is a number assigned to a real estate transaction after it closes. It indicates what percent of the list price a home actually sells for. If a house is listed at $250,000, and sells at $230,000, the sale-to-list ratio would be 92%.
If a house sells over asking, the sale-to-list ratio will be over 100%. An agent’s average sale-to-list ratio indicates how accurate they are at pricing homes, and how much of a seller’s list price they’re likely able to deliver. The higher their average sale-to-list price ratio, the better their track record of selling homes for more.
Homeowners stay in their homes for over 8 years on average and tend to develop roots in their surrounding area. Think about how much you’ve learned about your neck of the woods by living where you do over time.
You’re probably intimately familiar with details like what types of homes exist in your neighborhood, nearby traffic patterns, where to get the best cup of coffee, and the closest entrance to the community bike trail.
To increase your chances of selling your home for more, you need a real estate agent who knows your area just as well — if not at a deeper level — than you do.
An agent with hyperlocal expertise will be able to highlight the perks you’ve come to love more easily and authentically to interested buyers. They’ll also have heightened familiarity with real estate in the area and what types of upgrades would help your house sell for more (and which ones would be a waste of money).
“What’s going on in your local market will impact what improvements you need to make and how you price the property to maximize value. For instance, in my current market, buyers can barely find a house to put an offer on, so they’re not worried about the paint color or the outdated bathtub,” advises Brent Dalley, a top-selling real estate agent in the Dallas area.
The best way to tell whether an agent’s experience aligns with your locale is to look for a concentration of past transactions close to your home. HomeLight includes a “Transactions Near You” feature on every one of our real estate agent profiles so you easily can see where an agent does the most business.
Strong social media presence and marketing plan:
One of the most effective strategies toward selling your house for more is to attract multiple offers. And to do that, your house needs to be seen: Seen from the street, seen on real estate listing websites, seen among other local real estate agents and brokerages, and seen on social media.
As part of your vetting process, review an agent’s presence on Facebook and Instagram and look to see how active they are in promoting their client’s listings. Find out whether they plan to host an open house or private broker open house to drum up buzz around your property.
Ask your agent these 7 questions to test their marketing plan:
- What kind of outreach will you do to draw in buyers?
- Who’s our target buyer pool?
- How do you plan to market my home visually?
- How do I know whether the marketing plan is working?
- What happens if we don’t get any showings?
- What’s your marketing budget?
- How will I know if the price is right?
And never, ever settle for an agent who’s marketing plan stops at: “I’ll post your listing on the MLS.”
2. Make targeted improvements with minimal cost.
When it comes to getting your house ready for the market, less is more. Our research shows that the improvements with the greatest ROI will require nothing more than elbow grease, a few weekends worth of time, and some sudsy water: We’re talking about #1 deep cleaning, and #2 decluttering, simple steps which can collectively add nearly $4,000 in resale value.
Run any other improvements you feel inclined to take on by your real estate agent before you invest in them. An agent will bring the expertise of knowing whether a project is necessary, how much it’s likely to add to your resale price, and ultimately whether it’s worth the effort and money.
“Good agents approach home improvement projects with the mindset of maximizing your investment,” says Dalley. “I can tell you that in my area, focusing on the kitchen and main bedroom suite will give you the biggest return on your investment.”
In the event that you believe refreshing some of these key rooms will be key to selling your house for more, work with your agent on which selections to make and what designs are resonating locally. This might include projects like replacing your old bedroom carpet with hardwood or a hardwood look-alike, swapping your old shower door with a modern version, or painting your dated kitchen cabinets white for a facelift.
3. Don’t skimp on photography or staging.
“The way to maximize value is to have your house staged and photographed by pros because it’s wildly important for marketing,” explains Dalley. “Buyers house hunting online will only look at a listing for 1.2 seconds if it only has one amateur photo.”
Home staging — the art of showing off a space in its best light with the right furniture, decor, and accents — helps buyers visualize life in your home without the distractions of family photos and excessive clutter. This effort can help increase your home value by anywhere from 1%-10%, according to top real estate agents across the nation.
Once a house is staged, pro photographers know how to shoot a space from the ideal angle to make it appear spacious but not distorted. Photographers will also set up pro lighting to eliminate shadows that make rooms appear dark.
You can see the quality difference for yourself. Simply scroll through local listings and you’ll be able to spot the amateur photos right away. Statistics show that home listings with professional photographs sell 32% faster, too.
Thankfully many real estate agents offer staging and photography as part of their listing services. Pro photos are a standard offering for most brokerages, and 75% of top agents report that they’ve provided complimentary staging services to their sellers in the past, either by offering their own staging expertise or by partnering with a staging pro in the area.
4. Get a pre-listing inspection to avoid a surprise price reduction.
Every home has its issues. Maybe it’s a leaky faucet, or a door that won’t quite close unless you slam it. Little problems like these won’t make much of an impact on your home’s value, but what if you have a bigger problem lurking below the surface?
A buyer who discovers issues as major as frayed electrical wires, undiscovered mold growth, an expanding crack in the foundation, or a termite infestation during the home inspection will either demand that you fix it or ask for a significant price reduction.
Should you refuse to meet their demands, the buyer can walk away and your home will go back on the market. When a deal falls through like that, it can be a red flag to future buyers that maybe something is wrong with the home.
You can save yourself from a surprise price hit by ordering a pre-listing inspection to identify any issues worth addressing. The inspection will only cost you around $330. In return for your diligence, you’ll be able to fix the issue ahead of time (and probably for less than if you’d waited until a closing emergency) and list the home knowing that it’s fully safe and inhabitable.
Just keep in mind that most states have seller disclosure laws that require you to inform buyers of any known issues or material facts about a property that could impact its value. So, if your inspection finds issues that you don’t intend to fix before listing, you will likely need to share the existence of those issues with your buyer.
5. Avoid the temptation to shoot the moon on price.
Even in a hot seller’s market, the biggest mistake sellers make is overpricing. In fact, 52% of agents surveyed for HomeLight’s Top Agent Insights report for Q4 2020 report that the temptation to overprice is the biggest challenge sellers face. At some point, you must accept that your home falls within a certain value bracket — and you cannot improve your way out of it. In addition, the house will still need to appraise.
“If all of the comps in your neighborhood sold around $200,000, making $100,000 worth of improvements to your home isn’t going to net you an extra $100,000,” advises Dalley.
“Appraisers are going to go by what the numbers are telling them, not by how cool your upgrades are. So no matter what you do to your house, you’re stuck with that $200,000 valuation bracket.”
To price your home accurately, your real estate agent will prepare what’s called a comparative market analysis (CMA) to determine how much your home is worth based on recent sales of homes similar to yours in location, size, condition, and features.
We can’t stress this enough: So long as you have a great real estate agent — Trust. The. CMA.
Do not let your emotions or personal opinions about the home drive what you believe the price should be. Go with what the objective data and information indicate. Read the market; don’t go down memory lane. Overpriced homes usually take longer to sell, and typically only draw in offers that are under the asking price.
6. Time your listing for peak house hunting season.
Timing is everything, even in real estate — so if you’re not under any pressure to sell immediately, you may want to hold off and list at the priciest time when your market is the hottest year to year.
Real estate markets often fluctuate in temperature throughout the year as buyer demand increases and declines. This demand is impacted by a variety of factors, including school schedules, vacation buyers, and even the weather.
For example, in the Midwest, real estate markets heat up in spring and summer when there’s no snow to impede the moving process. However, in southern states, fall and winter are prime buying times as snowbirds move to warm states to avoid the snow and cold.
Timing your sale isn’t as simple as checking your calendar, though. Analyzing market trends in your area requires the crunching of a lot of data. Let HomeLight help pinpoint the best time to sell for the most amount of money in your area with our Best Time to Sell Calculator based on actual transaction data for your market.
7. Negotiate hard on price and inspection, soft on other terms.
When netting the most value is your top priority, you’ll want to stand your ground when negotiating the contract price (so long as your price is accurate). But if you’re hard-nosed about all of your negotiations, your contract could fall apart.
A buyer’s instinct will be to ask for a price reduction wherever they can, especially after their inspection report comes in. But giving a hard and fast “no” to every request sends up a red flag that you’re inflexible. This will just push your buyers to dig in their heels too and result in a stalemate.
Instead of that reactive “no,” you need to be proactive in your negotiation tactics and find alternative ways to compromise, such as by offering to provide a home warranty or leave your old appliances behind.
“Refrigerators have become the greatest bargaining chip ever in negotiations. Let’s say your buyer wants a leaky faucet fixed in the negotiations. Instead of fixing it, we can offer to leave the refrigerator with the house,” advises Dalley.
“Now my sellers don’t care about that fridge, but when they offer it up in exchange for not fixing a leaky faucet, it’s a win-win. The buyer feels like they win because they don’t need to buy a fridge when they move in, and my sellers definitely feel like they won because they’re not out of pocket on the faucet repair.”
Using your fridge as a bargaining chip in escrow negotiations all depends on your market. In some areas, it’s expected that kitchen appliances like stoves and refrigerators stay with the property while washers and dryers are negotiable. Talk to your agent about which negotiating levers are available in your particular case.
Maximize value, but don’t manufacture it
For most people, a home is their biggest asset. So selling it is kind of a big deal. You’ve spent years tending to this piece of property and keeping up with all of its associated costs and payments. Now you want to cash in on all your hard work and money spent to replace the furnace, get a new water heater, or upgrade the bathrooms.
With insights from this guide, you should have a solid idea of the ways you can increase your chances of a higher sale price. You need to work with an agent who knows their stuff, get the house looking its best, and make sure the listing is seen by lots of buyers. However, what you can’t do is intentionally overprice your home and hope to fool the market, in effect “manufacturing” value.
“You neither need to be the best property or the best-priced property on the market,” concludes Dalley. “So if Mr. Smith has your exact same house down the street, but he’s got upgraded granite countertops in the kitchen, and it looks like it was decorated by Chip and Joanna Gaines, then you need to do at least as much as your neighbor has done if you want to maximize value.”
Header Image Source: (Windows / Unsplash)