We are in one of the great housing booms. Residential home sales are hitting 2006-era peaks, and housing prices are likely to go even higher with supply tight.
According to the National Association of Realtors, 6.46 million existing homes were sold in November, the highest number this year. For real estate agents, 2021 has been their busiest year since 2019.
For many homeowners, this is the perfect time to sell their homes. To help maximize their return, it is necessary to know the cheapest way to sell a house.
How Much Does It Cost To Sell Your House?
Costs of selling a house include the standard closing costs, alongside potential charges for getting your home ready for a sale, moving your things (and perhaps even yourself), and offering concessions to a prospective buyer.
According to Zillow, closing costs include 6% in commissions for your agent and the buyer’s agent and 25 to 4% in property and transfer taxes, attorney fees, and real estate fees such as title insurance, escrow fees, and HOA transfers.
Source: Zillow
You can use a home sale proceeds calculator that you can use to predict the cash proceeds from a sale.
Is It Cheaper To Sell A House Without A Realtor?
The short answer is: yes. In 77% of real estate transactions, the seller pays the brokerage fees for listing and buying agents. Therefore, you will save on the listing agent’s fees. The more important question is whether it is realistic for you to sell your home without a realtor.
It is more practical for most people to hire a listing agent to get the right degree of skill needed to sell their home.
Only 11% of sellers take the for-sale-by-owner (FSBO) option, 5% do most of the work themselves and use an agent to finalize a sale, and 13% try to go it alone but hire an agent.
How Can I Reduce The Cost Of Selling My House?
The highest cost of selling a house is the listing fee and associated real estate agent’s fees. So going it alone is a viable option for sellers ready to tackle the market.
Other potential areas of saving are from using non-traditional, lower-cost brokers.
Cash buyers eliminate closing costs, but there is a price to pay. Therefore, sellers should also consider doing much preparation work themselves and even staging the home themselves.
The top five cost-saving measures we will discuss are:
- Going the FSBO route
- Getting a low commission real estate broker
- Doing the minor work of preparing your home for sale yourself
- Selling to a cash buyer
- Staging your home yourself
1. Go to the FSBO Route
This is a powerful way to unlock savings for those sellers who have the time and the knowledge to sell a home independently. Typically, real estate commissions are 5% to 6%, split evenly between the listing and the buyer’s agent. Going the FSBO route saves you 2.5%-3% of the house sale price. In addition, you don’t have to close the sale yourself. Many sellers use agents to finalize a deal, reducing the fees due to a real estate agent.
2. Get a Low-Commission Real Estate Broker
For those sellers who do not have the time or expertise to sell a home on their own, getting a low-commission broker can give you many benefits of a full-service real estate agent at a reduced fee. They will typically charge 1% to 2%, compared to a traditional broker’s 2.5% to 3%. Another option is a flat-fee real estate agent.
3. Do the Minor Work of Preparing Your Home for Sale Yourself
You will have to prepare your home for sale. A few of these tasks are minor enough to be done yourself, such as repainting, making minor repairs, and touching the walls. It is cheaper to rent tools and equipment than pay for labor.
4. Sell to a Cash Buyer
Cash buyers such as “We Buy Houses for Cash” companies and investors will typically offer to buy your home as-is, and quickly and they will typically cover the closing costs (8% to 10% of the home sale price). Although this will significantly speed up the process and reduce costs, you will often have to accept a lower price.
5. Stage the Home Yourself
For 48% of buyers, having a home staged is vital. There are many types of home staging, and many of them do not need you to hire a professional. At a minimum, home staging involves decluttering, arranging furniture to make the most of your space, and removing personal belongings.
Low-Budget Fixes To Improve Your Chances Of A Sale
Declutter and Organize
Improving your home’s interior appeal is vital for your chances to get it sold and sold fast. Get a storage unit and store away any extra belongings, including large furniture, that make your home look crowded. Make sure you organize your closets: 64% of buyers say having ample storage space is extremely important. Get rid of personal stuff like family photos because it makes it hard for buyers to imagine themselves in the home.
Deep Clean Your Home
Do a deep clean of your entire home. This includes carpets, windows, kitchen cabinets, baseboards, and bathroom tiles. Having lived in a home for long, a person becomes accustomed to its appearance, but your home may appear dusty and old for a buyer. Therefore, you need to clean it deeply, so it looks new.
Landscape
Zillow estimates that 29% of sellers landscape their yard before listing. Your curb’s appearance is your home’s first impression to potential buyers. Add flowers to make it look better. Mow the lawn. Rake the leaves. Add lighting. If you don’t have a walkway, consider adding one.
Paint the House
Painting the house will make your home appear newer, but it will also add to the value and your ability to raise the asking price.
Hire a Professional Photographer
According to Zillow, 77% of buyers say viewing professional photographs is very important. Getting professional real estate photos typically costs just $150 to $200, and many real estate agents will often include that in their fee. Your agent or photographer may even offer 3D virtual house tours.
Summary
Sellers should never leave money on the table. Yet, in the most significant housing boom since 2006, sellers have the opportunity to sell their homes for historically high values.
By finding the cheapest way to sell a house, they can maximize their gains during this incredible market opportunity.
One of the most powerful ways to save money is associated with real estate agents. Sellers can either opt not to use one, use them for the last mile of their journey, or use non-traditional agents such as low-commission or flat fee brokers.
Sellers should also consider doing much of the preparatory work necessary to sell a house themselves, such as repainting, minor repairs, and touching the walls.
Selling to a cash buyer is another source of savings because cash buyers typically cover closing costs.
If sellers are prepared to declutter and clean their homes, do some landscaping, paint their homes, get professional photographs taken, and deep clean their homes, they stand a good chance of selling their homes quickly and at a minimal cost.
