As emotional and stressful as buying a first home can be, there is something pretty much everyone agrees on – the importance of making as much as you can off your first home sale. Contrary to popular belief, selling your first home doesn’t have to be expensive. In fact, with just a few savvy steps you can ensure you’ll make money off your first home. Here’s how:
If you’re living in a home that isn’t your forever home and it needs some work, you’ll need to ensure that any renovations or upgrades are approached with the money mindset of an investor. (This is one of the mistakes I made that I wrote about in this post!)
Although our homes are very emotional to us, making “emotional” renovation decisions doesn’t always positively “impact the bottom line” in terms of resale value. Sure, you may want to completely re-do the master bathroom to make it the Pinterest-worthy retreat of your dreams, but will it overprice your home for the neighborhood?
Just remember this – if you’ve purchased a home you don’t plan to live in for the long term, any projects need to be planned with return on investment in mind.
Here’s an index of home upgrades that will hold their value – or better still – increase your home’s worth.
Ensure the Initial Valuation is Accurate
Speaking of your home’s worth – it is crucial (whether buying or selling) to go into the sale with the most accurate numbers possible. Many online tools (like Trulia or Zillow) aggregate a ballpark figure, but when you’re trying to make money, “ball parking it” could cost you thousands.
The best way to get the most accurate price on your home is to pay for your own appraisal. Don’t want to shell out $4-500 dollars for a pre-sale appraisal? You can compare recent sales in your neighborhood on your own, or use more sophisticated technology, such as Virgent Realty’s online home valuation tool (currently only available in the Atlanta metro area.)
Instead of simply aggregating other sales in the neighborhood, Virgent is an actual valuation, done completely online with no agent meeting or phone calls (and it’s completely free). They get to the number by taking into account many factors like recent sales and home upgrades, and have their real team of people evaluate the specs of your home to deliver a valuation via email within 48 hours.
Although it isn’t instant, it’s still a tech-driven valuation that will be more accurate than anything else found online.
Zillow values my home at $132,000. After going through Virgent’s super simple questionnaire on my own, they looked at all the factors and put my house as being worth almost $100,000 more. Which number would you want to use?
Don’t Pay for Staging
There’s very little statistical evidence that suggests home staging can impact the amount for which you sell your home. This is why if you want to make the most money you can — forgo home staging. It’s expensive! Adding an additional $3-$4k for a home stager is a hefty line item and will take away from what you’ll walk away with once the sale is complete.
If you have a friend who is a professional designer or has a knack for home décor, ask for their opinion in exchange for dinner or coffee. You’d be surprised how far fresh, neutral paint and a few hours of extreme de-cluttering can go.
Also remember that home staging won’t disguise any of the real problems with your home. If there are pitfalls – your money should go toward fixing those instead of on décor.
Don’t Pay a High Commission Percentage
In the digital era, home sellers know they no longer have to abide by the traditional 6% commission arrangement with their realtor when listing a home. New realty platforms have begun to offer services for a flat fee – which ends up being much less than the traditional 6% commission.
“The concept of paying a percentage commission doesn't make any sense,” says Ben Kubic, Founder and CEO of Virgent Realty. “It doesn't cost us any more to sell a $500,000 house than a $400,000 house, so why should we get an extra $3,000? Virgent was created to eliminate all the unnecessary costs involved in selling a home and provide a better, full-service home selling platform designed for the digital age.”
For example, on a home worth $300,000, a 3% agent’s commission would be $9,000 (plus the 3% you’d pay to buyer’s agent, which you can’t get around.) Using a flat-fee service like Virgent Realty, which only costs users $5,000, would net a seller $4,000 in savings.
You could put that $4k into your retirement savings, or use those funds to pay off debt or for upgrades or your next (hopefully, forever) home.
Timing Is Everything
The common myth among home sellers is that “spring” is the best time to sell, but in today’s competitive market, it pays to be specific. A recent study found that May is the best time to put your home on the market if you want the quickest/most lucrative sale. Of course, if you need to sell right away you can’t do much about the timing. If your timing is flexible, however, it could pay to wait and time it right.
Whether you are opting to sell your first “starter home” or make money off an investment property, it’s important to do all off the steps above in order to walk away with as much money as you can from your first home sale. With sky-high student loan balances and competing financial/career priorities among millennials, it’s important to leverage this transaction to set you up for an even brighter financial future.
Virgent Realty sponsors this post. Virgent is the first full service, fully digital real estate agency and they’re currently operating in the Atlanta area. Thank you for supporting the brands that support this blog. Click here to learn more about Virgent Realty.
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