Selling a house in the U.S. – all you need to know

Real Estate | 12 Jul |

Despite the financial woes that the pandemic brought to most of the world, the housing market actually saw a surge in sales from the second quarter of 2020 until now.

House prices also rose as the demand from buyers outstripped the available housing on the market. 2022 is halfway through, the housing market is still buoyant, and many people are considering selling this year.

Selling a house can appear to be a complicated process, and naturally, if you are planning to move home you will have some questions. Typically, a house seller would be interested in the methods available, and how expensive it is to sell. You may also want to know if 2022 is truly the best period to sell.

Read on for a brief guide to everything you should know about selling in the USA right now.

Is now the moment to sell in the USA?

As you have read above, the housing market had quite a purple patch during Covid. Existing house sales in 2020 rose to the highest levels since 2006. This was partly due to the shortage of property on the market.

While buyers came out in force, listings remained at historically low levels. This helped push up the value of property across the country as buyers competed to make offers on homes.

However, home sales have dropped 8.5% this year compared to 2021. This drop may be due to the average value of a home pushing out potential first-time buyers, or it may simply be the demand has dropped. Or, it could be the rise in mortgage rates.

Regardless of the drop in sales, house prices remain high and the market is healthy. 2022 still looks like a good time to market a home. You just need to choose the best route. Normally, that would be through a realtor.

The pros and cons of employing a realtor today

There are several pros and some cons to using a real estate agent in today’s market. The majority of people selling a home will take this option for it is the simplest route.

The pros include the following:

• All photography is taken care of

• Marketing is done by the realtor

• Your home displayed through multiple channels including the internet

• They understand the market

• They can handle negotiations

• They can help with paperwork

The cons though include these:

• High commission rates

• Can take time to sell and complete

• May not be committed to your property sale

• Usually tied into one realtor by contract

The commission rates are often the biggest concern with a realtor as they are higher than any other method of selling a home. You may expect to pay between 4% to 6% but what you may not know is that you can negotiate realtor commissions, reports Investopedia.

Typically, a realtor will simplify the house selling process and this is why it is the most popular. Another method for selling a home is to go straight to a property investor, these are also known as cash buyers.

What is a typical cash buyer?

A cash buyer is simply someone who has the available liquid funds to make a purchase. This is desirable as you will have no danger of the buyer’s financing falling through.

These days, there are many companies who advertise that they can buy houses for cash. These businesses operate much faster than realtors do, and they can make an offer within 24 hours typically.

They also often promise to remove commissions and real estate attorney fees, along with the closing costs. This can be a considerable saving for a house seller.

For example, visiting cashhousebuyersusa.com will show that there are closing fees and commissions are covered. They also state that renovations are not necessary. However, some cash buyers may reduce the offer available to cover repairs and renovations that are essential to them selling the property.

These types of businesses are investors and as such will seek a return on their outlay. The offer price can vary too. Some will offer as low as 50% of the current market value, while others may go up to 90% plus. Typically you may expect between 70-75%.

These have the advantage over realtors for anyone who wants to sell their home quickly, especially as house sales are seeing a drop in 2022.

The other selling methods available

While nearly 90% of sellers will choose a realtor, there are still plenty of individuals seeking alternative selling options.

Your other choices are:

• Property auctions

• For sale by owner

• Raffle/lottery

• Private listings

• Exchange/swap

Two other options are being talked about now; iBuyers and marketplaces for non-market-ready properties. These work in relatively similar ways to cash buyers, except the latter, is a marketplace used to sell properties that need renovations. Investors can bid and compete on listings.

For sale by owner is another selling method that is growing in popularity. The downside to this is that you will have to handle negotiations, marketing, advertising, showings, and every other part of the sales process.

When should you look to sell a home?

A big factor in how quickly your home sells is knowing when to put it on the market. For instance, you should understand what it’s like selling a house during the holidays if you plan to market it then.

The best times for house sales are May, June, and July. March and August can be good times also. Typically, the warmer months of the year are better times to sell than the winter.

Understanding the costs

This article is too brief to delve deeply into all the costs behind selling a home. However, you ought to consider all of the following:

• Commissions – realtors and property auctions

• Attorney fees

• Closing fees

• Various taxes

• Relocation fees

• Buyer’s concessions

• Renovation & repair costs

• Photography & marketing

• Staging

There may be extra costs related to early mortgage repayments also, so you should check with your lender for a full explanation.

Are home improvements necessary?

Are you flipping a property, or are you selling your family home? The work needed to sell a house will depend on its condition, and who you are selling to.

Many home improvements are unnecessary for selling a home, but sellers often make a few changes before they market their property.

If you want to understand the difference that home improvements will make, and how much you can expect back on your investment, here are some popular options:

• Garage door replacement – 94% ROI

• Kitchen remodeling – 50-70% ROI

• Bathroom remodeling – 85% ROI

• Extending the home – 100% plus ROI

• Window replacements – 100% plus ROI

• Decking – 90% ROI

These figures should be taken as estimates as they don’t take into account the scale of remodeling. Generally, outdoor renovations add more to the value of the home and can help with initial impressions on the buyer.

Speeding up the sale

Ideally, selling a home would result in the full market value being offered, with the sale being closed as fast as possible. Sometimes though, house sales can drag on.

Some ways you can speed this up are to consider using more than one realtor or simply sell to a cash buyer. Alternatively, you might want to bring in your own professional photographer, and use staging to impress any potential buyers during viewings.

Studies show that 85% of sellers want agents to take photographs and market the home themselves. Nevertheless, a professional photographer is one of the less expensive methods you can use to enhance your marketing materials.

Summary

Selling a home isn’t as straightforward as placing it on eBay, but using a realtor can make the process far less taxing. This method is the most popular land it will mean that you don’t have to understand all the areas of the process.

Yet, it isn’t the only option, and if you wish to sell the home by yourself you can. However, you will need to understand much more than this article has explained. The other main alternative is to seek out a property investor and sell for cash. This may be the simplest and certainly the quickest method today.

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