Before You Sell
10 Important Steps to Take
Before You Sell Your House
From Janet Wickell, Your Guide to Home Buying / Selling.
Essential Home Selling PreparationsThe home selling process differs
from state to state, but there are some important steps that most home sellers
should take before listing a house with an agent or selling it for sale by
owner. Every bit of prep work you do helps you get the most return from your
investment.
1. Get Pre-Approved for a Home Loan
I've known sellers who signed a contract to sell their house before they knew
if they were qualified to buy another. Either their financial circumstances had
changed since their last purchase, and they could no longer qualify for a loan,
or they weren't able to sell at a price that allowed them to buy the type of
replacement house they wanted. They ended up renting or buying something that
was far from ideal.
Before you decide to sell the house, get pre-approved by a lender you trust
and research the housing market in the area where you wish to live so that you
have a good idea how much it will take to buy a replacement.
Start looking for two types of real estate: houses that seem to match the one
you'd like to buy and houses that are similar to your current home. How do the
two categories compare in price? Can you handle the difference if you're
planning a step up?
Mortgage Helpers: Are You
Pre-Approved for a Mortgage? And to compare for-sale homes to your own,
learn how to Measure
Residential Square Footage.
2. Check Your Mortgage PayoffCall your lender to check the payoff for
your current home mortgage. You'll need the figure to complete Step 6.
3. Determine How Much Your House Is WorthDetermine your home's fair
market value. Real estate agents will usually help you determine value as a
courtesy, but you might take it a step further and order an appraisal.
4. Estimate Your Costs to Sell
- Real estate commission if you use an agency to sell.
- Advertising costs, signs, other fees if you plan to sell by owner.
- Attorney, closing agent and other professional fees.
- Excise tax for the sale.
- Prorated costs for your share of annual expenses, such as property taxes,
home owner association fees, and fuel tank rentals.
- Any other fees typically paid by the seller in your area (surveys,
inspections, etc.).
Real estate agents deal with transactions every day and can give you a very
close estimate of seller closing costs.
5. Estimate Costs to Buy a New Home
- Calculate moving expenses, loan costs, downpayment, home inspections, title
work and title policy, paying for a new hazard insurance policy--all expenses
related to buying a home. Your lender should give you a disclosure of estimated
costs when you apply for loan pre-approval.
6. Calculate Your Estimated Proceeds
- Deduct your mortgage payoff from your home's fair market value.
- Deduct your costs to sell from the remainder to get an estimate of the
proceeds you will be paid at closing.
Will your closing proceeds cover your costs to buy a new home? If not, do you
have cash or other funding to make up the difference?
7. Make Necessary RepairsMake all needed repairs unless you want the
house to be regarded as a fixer-upper. I'm not referring to cosmetic
updates--just items in need of repair. Anything that's obviously broken gives
potential buyers a reason to offer you a lower price, especially if it's one of
several repair hot spots
that worry buyers the most.
8. Get the House Ready to Show
Most houses need at least a little spiffing up before they are shown to
potential buyers. Great curb
appeal, fresh paint indoors (and sometimes out), organized closets and cabinets,
sparkling clean windows and appliances and a clutter-free look are essential if
you want the house to appeal to buyers. Be sure to avoid the things buyers hate most about
houses.
9. Get Psyched Up to Let People InIf you're listing with a real estate
agent, she'll ask you to leave when the house is shown. Why? Because lurking
sellers make buyers nervous--they don't feel comfortable inspecting the house
when they feel they are intruding in your personal space.
Unless there's a valid reason for it, don't ask your agent to be present for
all showings, because that requirement can be the kiss of death for showing
activity. Other agents want privacy with their buyers and they don't usually
have time to work around your agent's schedule.
Make the house accessible. That means it should always be ready to
show. Many agents won't bother showing a house that takes 24 hours to get
into.
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