From Los Angeles to Miami, home prices have declined in several metros across America. According to Fed, interest rates might increase twice in the second half of 2023.
By the end of the year, you may have to settle for a much lower selling price. So, if you are ready to rent or sell your house, list now.
📉 Home Selling Stats
- Home Sale Prices are Dropping Fast: Median US home sale price has dropped 12% from $433,000 in May 2022 to $418,083 in May 2023.
- Mortgage Interest Rates are Still Rising: Interest rate for a 30 year fixed mortgage have more than doubled in 12 months. Currently, they are at 7.25% on July 13, per Rocket Mortgage.
- iBuyers are Not a Viable Option: iBuyers have either shut down or have suffered massive losses. Our analysis suggests that iBuyers will offer much less than Fair Market Value (FMV) for your home in 2023 and 2024.
- Bottom Line: In 2023, more sellers are opting to sell their homes by owner. By using For Sale By Owner websites, you get full exposure via the MLS and save thousands in commission – negating the decline in home prices.
7 Power Steps to Selling a House
Here are the 7 steps to sell your house:
Step 1: Hire a Listing Agent (or Don’t)
Gone are the days when selling your house meant interviewing several agents and finding the best one for your needs. Today, some of the best FSBO sites and tech brokerages will match you with top agents and get you listed on the MLS fast.
And they will assist you in every step of the transaction with a Realtor’s expertise paired with useful and efficient technology.
You Have 4 Options to Sell Your Home:
- List Your Home on a For Sale By Owner Website: Best FSBO sites allow you to leverage technology in your home sale and save thousands in agent commissions. You get to retain control of your transaction by being able to engage directly with the buyer and buyer’s agent. FSBO sites will also get you listed fast, typically within 24 to 48 hours.
- List with a Discount Real Estate Broker: The best discount real estate brokers offer all the services that traditional Realtors do but at discounted rates. They usually charge 1.5% to 3% commissions to list your home.
- 1% Commission Realtors: Clients save thousands by working with discount brokers at 1% commission rates.
- 2% Commission Realtors: At a discount rate of 2%, they provide similar services to conventional Realtors.
- 3% Commission Realtors: At a discount rate of 3%, they provide similar services to conventional Realtors.
- 4.5% Commission Realtors: You can get all real estate services from your agent for a low commission of 4.5%.
- List with a Full-Service Realtor: We do not recommend hiring a full-service agent. They charge a hefty real estate commission of 5% to 6% which will decrease your net proceeds significantly. However, if you need hand-holding at each step, opt for local real estate agents in your neighborhood.
- Sell Your Home to an iBuyer: An iBuyer can make a cash offer instantly and help you sell your house fast. They make cash offers as high as 100% of the fair market value. However, iBuyers have strict purchase criteria.
✍️ Pro Tip: Sell Your Distressed Property to Cash Home Buyers
Cash home-buying companies typically offer 50% to 70% of the property’s Fair Market Value. They majorly deal in distressed and rental properties.
» Companies That Buy Houses for Cash: Check out our rankings of the best cash home buyers.
Step 2: Price Your Home for Sale
Pricing your home competitively is critical for a successful sale. It is simple to arrive at a list price. Analyze the currently active and recently sold similar listings in your neighborhood. Refine the price further to nail down the exact list price.
In a hot sellers’ market, you can price your home up to 10% more than the neighborhood prices. Whereas in a buyer’s market, set your asking price slightly lower to beat the competition.
» How to Price Your Home for Sale: See how to nail down your list price in 6 steps!
Step 3: Hire a Pro Photographer
Real estate photography can greatly impact the home selling process by attracting more buyers. According to VHT Studio’s Analysis, homes photographed professionally sell 32% faster.
Hire professional real estate photographers to create a portfolio of your house. A professional photographer can collate a portfolio that otherwise may not be possible if you take up the job.
Here are a few things you can do to ready your home for photography:
✍️ Pro Tip: Consider Virtual Home Staging
With virtual staging, you can get a realistically staged photograph or a video slideshow that can be uploaded with your MLS listing. And you can skip the hassle of actual home staging.
» Virtual Staging: Learn to stage your home digitally.
Step 4: List and Market Your Property
Homes listed on the Multiple Listing Service (MLS) sell faster and for 13% more. If you are working with a Realtor, they will do the MLS listing for you.
FSBO sellers can opt for a Flat-Fee MLS service like Houzeo to list on MLS. Houzeo will get you on the MLS for a small flat fee starting from $349. Your listing will be syndicated to 100+ real estate websites, giving your house the maximum exposure.
Your listing paperwork would mainly consist of a listing agreement and a seller disclosure.
- Listing Agreement: A listing agreement will be signed between you and your real estate broker. It will allow your broker to list your property on the MLS and thereby find buyers for you as per your terms.
- Seller’s Disclosure: A seller’s disclosure statement is a standard checklist form. It allows you to disclose material defects and features of the property. The seller’s disclosure provides information about the property that may negatively affect your home value.
Step 5: Manage Showings
Typically, Realtors host open houses or arrange private showings. If you are selling FSBO you can use online tools to manage showings.
With an online showing tool, buyers, and buyer agents can request and schedule showings. For instance, with Houzeo Showings, buyers and buyer agents can choose a particular showing slot as stated by you. The tool also provides features like requesting, rescheduling, updating, and canceling showings.
Step 6: Review, Compare, and Negotiate Offers
With the right marketing strategy, you should have offers coming your way.
The next step would be to compare the offers. Most house sellers go with the highest bid. But here are additional factors you must weigh before settling on an offer:
- Is the buyer making a cash offer on your house?
- Has the buyer applied for a mortgage? Are they pre-approved or just pre-qualified?
- Is the buyer willing to waive off some contingencies like home appraisal?
- Are buyers offering to negotiate the closing costs?
Keep these questions in mind when comparing offers. Typically, real estate brokers do such negotiations for you. As a For Sale By Owner seller, you can use offer management tools like Houzeo Offers. With Houzeo Offers you can make counter offers, call for the best offer, and a lot more.
» Highest and Best Offer: Is it a smart move in multiple offer situations?
Step 7: Close the Sale
Designated settlement agents handle the closing process in different states. Usually, an escrow agent, a real estate attorney, or a title company acts as a closing agent.
The closing process mainly consists of you completing the final paperwork, and paying the closing costs and home-selling taxes.
Paperwork for Selling Your House
Some mandatory documents needed to make a successful real estate transaction are as follows:
- The HUD-1 or Closing Disclosure: A closing disclosure contains a summary of all the detailed costs for homes purchased with a mortgage. If you accept an all-cash offer, you may get the HUD-1, which is less common. These documents detail the amounts you’re charged for, your loan payoffs, and the net proceeds you will take to the bank.
- The Deed: It enables the legal transfer of title from the seller to the buyer. Read this document carefully to verify the legal description of the property, the deed book, and the Property Identification Number, if any.
- Settlement Statement: This statement summarizes all the expenses involved in the transaction. These expenses are usually split into whether they have been paid prior to closing or are due at the time of closing.
- Certificate of Title: It allows you to state that you have the right to sell your property.
- Two Forms of Official ID: A licensed notary will likely be involved in the closing process and will require you to swear on your identity. You will be required to furnish identity proof (like a passport, driving license, etc.) during the process. The closing process might also require you to produce secondary identity proof.
» Paperwork for Selling a House Without a Realtor: Everything you need to know.
Seller and buyers both pay separate closing costs at the end. Seller closing costs usually consist of HOA fees, escrow fees, real estate attorney fees, and home warranty fees.
Additionally, you need to pay the commissions for both the listing as well as the buyer agent, which is around 5% to 6%. If you offer seller concessions, then you might cover some buyer closing costs as well.
The total cost of selling your home can vary depending on where you live. For example, the costs of selling your house in Florida range from $31,992 to $39,990 on a $400,000 home, but they’re typically much higher in New York or Maryland.
Home Selling Taxes
You will very likely pay the following real estate taxes while selling your house:
- Capital Gains Tax: You become liable to pay the capital gain tax if you sell your house for a profit. It is an expense you pay for an asset whose value has increased over time.
- Transfer Tax: Transfer tax is a one-time fee (generally costs less than 1%) that sellers pay at the time of transferring the ownership between the two parties. You need to pay this tax to the local government body in your area.
- Property Tax: Property tax varies by county, but you will pay approximately 1% of the total home sale value to the government as property tax. You can claim a rebate if you have paid your property tax a year in advance. If you have not paid the tax, then you need to pay the pending amount.
Tips to Sell a House in 2023
The above steps will help you prepare your home for sale. To ensure you sell your home successfully, follow these fool-proof tips to guarantee a smooth sale in 2023:
- Work with an Agent or go FSBO: The house selling process will differ based on which option you choose. You will get hand-holding if you choose to go with an agent. However, by selling your home yourself, you can save on high seller commissions.
- Use Advanced Tech Tools: Learn to manage the sale of your home using Showing Management and Offer Management tools. These tools will help you track the progress of the sale and take the next step on time.
- Provide Seller Concessions: Due to the high mortgage rates, home buyers are not motivated to purchase homes. As a house seller, you can offer seller concessions to assist an interested home shopper.
» Tips for Selling Your Home: Check these 9 powerful trade tricks to sell your home in 2023!
Bonus Tip: Avoid Agent Matching Services
Agent-matching services, like Clever Real Estate and Ideal Agent, advertise themselves as “free”. In reality, they will charge you 33% to 40% of the commission. So if you pay your agent 1.5% commission, the agent only gets 1% and Clever Real Estate retains 0.5%.
The company disguises this fee as a “Referral Fee” or a “Service Fee”. Clever also ensures that this fee is not disclosed to you on your settlement statement.
Selling a House FAQs
1. Can you sell a house with a mortgage?
Yes, you can sell your house now with an existing mortgage. You can use the proceeds to pay off the loan balance, and a share of closing costs. Make sure you check the prepayment penalties that may apply depending on the terms of the mortgage.
2. Do you keep all the money when you sell your house?
No, you do not keep all the money when you sell your home. The cost to sell a house consists of various expenses like closing costs, Realtor commissions, home selling taxes, mortgage payoff, prep work, pre-listing inspection, etc. You might only realize 60% to 70% of the net proceeds.
3. Who pays for what when selling a house?
The home seller typically pays the Realtor commission, owner’s title insurance, home warranty, and transfer tax. The buyer pays for the home inspection, appraisal, land survey, and lender’s title insurance. Some costs like escrow fees are split between both parties.
» What is Escrow: Types, benefits, and best practices.
4. How to sell your house in 2023?
If you want to sell your home in 2023, you must list your home on MLS for maximum exposure. Additionally, you should offer a competitive price and buyer agent commission to increase the chances of selling your home. List with Houzeo without a Realtor and save thousands on seller commissions!
5. What stops a house from selling?
The most common reasons that stop a home from selling are overpricing, structural issues, undesirable location, poor architecture, etc.
The Bottom Line
Selling can be daunting, but this is the best time to sell a house. It is better to sell FSBO as hiring a real estate agent will cost you a 3% commission.
If you are looking to save thousands in commissions, sell your house with Houzeo.com. Houzeo is a legitimate tech real estate platform that gives you access to tools only real estate agents have. Here’s how Houzeo works to maximize your savings and exposure.
Eager to Know More?
We’ve got you covered. Check out the following video to understand why Houzeo is one of the best for sale by owner websites in the U.S.
What is Houzeo?
An overview of what the platform is all about
» NEED MORE CLARITY? Read these exclusive Houzeo reviews and learn why it is one of the best FSBO sites in America.
- Net Listing Agreement: Learn how this agreement can benefit you in your house-selling process.
- Open Listing Agreement: Read now on how to secure the best house deal by hiring a real estate professional.
- 40-Year Mortgages: Read to know more.
- Holding mortgage: Read to know more.
Sell a Home Near Me
Click on your respective state to understand the process of selling a house in your area: