How to sell your house: The basics

Even in down markets, there are buyers for homes. Take the time to learn what is involved in selling a home.

Video Transcript

- Ideally, you want to sell your home in a seller's market. That means there's more demand than there is supply. When this is the case, you can afford to keep your asking price high. And you have a good shot at selling the house in a short period of time. It's also a good time to sell when the economy is healthy and people have money to spend or mortgage rates are low and when the weather is warm.

Setting the selling price for your home involves knowing what it's actually worth and what comparable homes in your area are selling for. To know what it's actually worth, the home must be appraised. The recent sales prices of comparable homes are the biggest factor in setting the selling price.

The selling price of a home is usually not the same as its asking price. The asking price is what the seller is hoping to get. The selling price is what the seller actually got.

Usually, sellers err on the higher side. If they don't sell it within a certain period of time, they lower the price.

Real estate agents are trained to help you set your price and change it, if needed, as time goes by. They're also trained to negotiate with buyers on prices. In return for their work, they're usually compensated the traditional commission of 5% or 6% of the home's selling price.

Not all home sales need an agent. In some cases, home sales are agreed upon in advance. Others take place between family members.

The most commonly cited reason for selling your home yourself is that you can save money in real estate commissions. This can preserve some of the equity you've built up, which can be very important when the market's down. You can also put that money towards a down payment on another home. In return for saving this money, you must educate yourself on how to make your home presentable, how to set a price that is fair to you and that attracts buyers, the paperwork involved, and how to negotiate, all the things that a good agent would do.

Some people hire agents to do limited tasks for them, such as advertising the home in the MLS, handling the paperwork, or some marketing tasks. The commission for these services may be smaller than the standard or it may be an hourly fee.

Stay financially fit, friends.