If you’ve decided to sell your home, chances are you’re caught
up in a host of emotions. You may be looking forward to moving up to a new dream house or facing the uncertainty of a major
move across country. You may be reluctant to leave your memories behind or eager to start new adventures. Whatever turbulent
feelings you’re experiencing right now, there are plenty of practical matters that need your attention. Keep in mind
the following considerations to help the whole process go more smoothly.
Time Becomes Money
It’s a good idea to place your home on the market as far in advance
as possible of purchasing a new one. If you find a new home first and then try to sell your present home, you may wind up
with two mortgages. If this does happen, ask your real estate agent or banker about a bridge loan to help you make the double
payments. Lenders use the same criteria for offering bridge loans as they use for mortgages. Should you qualify for a bridge
loan, beware of the expense; during the term of the loan you must continue to pay both mortgages. Shop around for the best
Keep in mind that when people move, sell and buy, there usually is a domino
effect. Closing and moving dates have to be coordinated, and the more firmly everyone commits to a window of dates and sticks
to them, the better for all involved. Put all agreements about dates in writing, and protect yourself by negotiating financial
penalties for failure to comply.
Check Your Curb Appeal
A home that’s visually appealing and in good condition will attract
potential buyers driving down the street. Use this checklist to view your property through an outsider’s eyes.
Are the lawn and shrubs well maintained?
Are there cracks in the foundation or walkways?
Does the driveway need resurfacing?
Are the gutters, chimney and walls in good condition?
Do the window casings, shutters, siding or doors need painting?
Are garbage and debris stored out of sight?
Are lawn mowers and hoses preperly stored?
Is the garage door closed?
On the Inside
Strong curb appeal will lure potential buyers inside, where you have to live
up to their expectations. Fortunately, there are plenty of easy improvements you can make to your home’s interior without
spending a lot of money. Cleaning is No. 1. Your windows, floors and bathroom tiles should sparkle. Make sure you have clean
heating and air conditioning filters. Shampoo dirty carpets, clean tubs and showers, repair dripping faucets and oil squeaky
doors. Keep your home neat, clean and picked-up at all times. It may not seem fair, but a peek in the oven may be the hallmark
by which a buyer judges how well you have kept up your home.
Remove unnecessary clutter from the garage, basement, attic, closets and straighten
stored items. Also remove any items that might make a statement that would be offensive to others who may not share your same
views, beliefs or sense of humor. If your home is crowded with too much furniture, consider putting some things into storage.
If a room needs a fresh coat of paint, use a neutral off-white. Think, too, about how your home smells. You may be used to
the smell of a pet or cigarettes, but such odors can be a strong turn-off to others. Be certain to remove valuables such as
jewelry and other items from view. It might be wise to put these items in a safe deposit box before showing your home. Finally,
set a mood for the buyer. Make your house homey with live flowers and fresh guest towels in the bathroom. Place scented potpourri
around the house or, on the day you’re expecting a potential buyer, pop a batch of frozen cinnamon rolls into the oven
for a welcoming aroma.
Remember, cosmetic changes do not have to be expensive. In fact, costly home
improvements do not necessarily offer a good return on your investment when you sell. It’s attention to the basics—anything
that says “this home has been carefully maintained”—that will help you get the price you want.
Go It Alone--or Choose an Agent?
Some homeowners decide to sell their homes themselves in order to save the
commission charged by a real estate agent. The commission rate may vary, depending on where you live or what agency you choose,
but it is generally upwards of 5%. However, handling your own sale means you will be responsible for placing ads, answering
phones and showing your home to strangers. What’s more, buyers who know you are saving on an agent’s commission
may offer less for your home, wiping out the financial incentive to do it all yourself.
You may decide an agent’s commission is a bargain the first time that
a would-be buyer shows up unannounced at dinnertime. Also, be aware that a real estate agent probably knows a lot more about
the business of selling a home than you do. Here are some of the advantages professional agents offer:
They will help you establish a fair asking price for your home.
They will promote your home to other agents and list your property in multiple
listing services. A multiple listing service is a book or computer database that all real estate agents who subscribe to the
service can access. Your home will get exposure to all those agents, one of whom may have the perfect buyer.
They will create, pay for and place advertising for you.
They will schedule appointments to show your home to prospective buyers even
when you are not there.
They can weed out buyers who will not qualify for a mortgage.
They can refer you to sources for insurance, inspections, legal counsel and
They will help you negotiate with the buyer.
They can make suggestions to help make your home more attractive to a potential
Setting a Fair Price
Naturally, you want to get top dollar for your home. But, at the same time,
you don’t want to scare off potential buyers with a price tag that’s too high. Setting an artificially high price
may cause your property to languish on the market for months. Reducing your asking price later on may lead buyers to wonder
if there is something wrong with your home. Here are some of the factors to consider in pricing your home.
Supply and demand in the local housing market
Average home prices in the neighborhood
Your home's extras -- pool, fireplace, central air, etc.
To determine the value of your home, you probably will want the advice of
a real estate agent or appraiser. Ask an agent to prepare a market analysis for you, showing the recent selling prices of
three neighborhood properties comparable to your own. The agent can help you adjust for the unique features of your own property.
CONTACT US FOR A FREE MARKET ANALYSIS
Qualifying a Buyer
Your agent will want to quickly weed out potential buyers who cannot really
afford to purchase your home. A number of factors will help determine whether or not you are wasting your time negotiating
The buyer's debt and credit history
The buyer's current income and employment
The buyer's cash position and availability of a down payment
The length of time the buyer needs before closing on your home
How interested the buyer appears to be in your home versus others
Seek Legal Representation
When selling your home—particularly if you are selling on your own—it’s
a good idea to be represented by an attorney. Look for an attorney with expertise in real estate transactions. When a potential
buyer puts an offer in writing and you accept it, the signed acceptance becomes the sales contract. Your attorney will be
present at the actual closing to protect your interests and can assist you with the following elements of a
The sale price
What is included in the sale price -- draperies, carpeting, light fixtures,
heating oil, etc.
The amount of the down payment
The date of settlement and possession date
Contingencies to the sale--inspections (e.g. structural, lead-based paint,
radon), required improvements, legal review, etc.
The amount and length of the mortgage loan, interest rate and time limits
to secure the loan
Determining which closing costs are to be paid by the buyer and which by the
Selling a home can have a major impact on your federal and state tax returns.
Check with your tax consultant on the factors that may affect taxes resulting from the sale of your home. For example:
Whether you purchased the home or acquired it by gift or inheritance
Whether you used your home partly for business or rental
Costs associated with selling your home
Home improvements or additions, which may help to offset capital gains
The sale of your home. In certain cases you can exclude up to $250,000 in
gain ($500,000 for married couples filing a joint return) on the sale of property that was your principle residence for at
least two years. Generally, you can use this exclusion every two years.