Selling a house can be a great financial investment that earns you a profit, but only when you do it at the right time.
Knowing when to list your home, how to price it, and how to make it the most attractive for buyers is the key to selling your home.
Fluctuating property values, necessary home improvements, supply and demand, all play an important role in how long it takes to sell your home.
What to Expect When You Sell Your Home
Selling your home may take longer and cost more than you think. In a perfect world, it can take a few months to sell, but the home-selling process can sometimes take 12 months or more, depending on the market.
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Before listing your home to sell, consider this timeline:
- 3 months before listing
Pay for a home inspection. After a professional inspection, you will know everything wrong (and right) with the home. If there are serious issues, you have time to fix them before listing your home for sale. - 2 months before listing
Pay a professional company to deep clean your home and prepare it for staging. - 1 month before listing
Declutter your home and take down any personalization to allow buyers to envision their belongings and family in the home.
What Does Selling a Home Cost?
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Many home sellers don’t realize that selling a home costs money. Yes, you get the agreed-upon sales price, but there are costs you must cover, including the following:
|
Concept |
Cost |
|
Real estate agent commissions |
3% - 6% of the sales price |
|
Closing costs |
3% - 4% of the sales price |
|
Prepping your home to sell |
$1,000 - $2,000 plus repairs if needed |
Other costs to include:
- Moving expenses
- Rental costs, if you must rent before your new home is ready
- Capital gains taxes, If you make more than $250,000 (single owner) or $500,000 (married filing jointly owner) in profits on your primary residence.
The Property Market Cycle and the Best Time to Sell Your Home
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When selling your home, it’s important to time it right. Real estate cycles last approximately 18 years, but the exact time depends on many factors.
The cycle has four phases:
- Boom
During the boom, the job market is strong, and there is a high demand for housing. Most consumers are confident in the economy, and homes sell faster. This is the best time to sell your home because you're most likely to get the best price and sell it the fastest. - Slowdown
The market begins to slow down as the housing supply exceeds the demand.
If you listed your home at the tail end of the boom, you may find yourself in the slowdown. Your house may still sell, but it will take longer, and you may get less. - Slump
If you were around during the housing crisis of 2008, you've seen the slump.
During this phase, there are many more homes than buyers, and most sellers are forced to lower the sales price or take their homes off the market. - Recovery
During recovery, house prices slowly increase, but not as much as sellers would hope.
It's a good time for buyers to jump in and grab homes for a steal while the economy fully recovers and homes become worth more, but sellers are better off waiting.
How to Analyze the Market
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No matter the real estate cycle, getting to know the local market is important. See how other properties for sale are performing and how much sellers ask for similar properties.
Your real estate agent can help you view comparable sales or recently sold homes similar to yours so you can see how much you might get for your home if you sold it then.
Pay close attention to whether it's a buyer's or seller's market, too.
- Buyer’s market: In a buyer's market, there are more houses for sale than buyers. Sellers often have to sell for a lower price than they wanted if they want to sell the house. It usually takes longer to sell, too.
- Seller’s market: In a seller's market, there are more buyers than houses for sale. This causes bidding wars and helps sellers get more for their homes. However, the buyer may have trouble getting financing if the price gets too high.
Should you Use a Real Estate Agent?
When selling a home, you can sell it yourself or hire a real estate agent.
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As we said earlier, real estate agent commissions can be high, but there are many benefits of using an agent, including the following:
- Market knowledge, helping you understand the ins and outs of selling.
- Understands how to price the home to sell while helping you earn profits.
- Markets to a larger audience, possibly selling the home faster.
- It takes the pressure off you to show the home and negotiate the deal.
If you sell the home yourself, you are responsible for all the work, from staging and pricing to marketing the home, negotiating, and completing the paperwork.
How to Get the Most for Your Home
To get the most for your home, preparation is key. You must clean, declutter, and repair the home.
Take care of any major issues with the house to make it more attractive and avoid excessive negotiations with buyers.
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Time the sale perfectly.
Know the market, see what other homes sell for, and how many days they are on the market. The fewer days on the market homes sit, the faster your home will sell.
Final Thoughts
Selling a house can be one of the best financial investments, especially if you make a profit.
The key is knowing when to sell, deciding how much to sell it for, and minimizing the cost.
Understanding the real estate market, working with a licensed real estate agent, and using great negotiation strategies is the key to a profitable sale.
