10 Steps To Take Before You Sell Your Home
Although the home selling process differs depending on your location, there are some steps that every seller should take before putting his house on the market.
1. Pre-approval for your home loan
Have you heard the horror stories of sellers who signed a contract to sell before they even know if they could qualify for another one? As the story goes, either they aren't able to sell at the desired price so they can't afford the home they want or even equal to what they currently have, or else they don't qualify financially for a loan the way they did the last time they purchased. They end up either renting or buying something that isn't what they'd hoped for. Before you decide to sell or accept any kind offers, you should get pre-approved by a lender. It's also a good idea to research the market where you'd like to live so that you get an idea of what it will cost to buy your new home. Questions to ask yourself could include: What's the difference in price on a step up? How do homes already for sell compare to your own? What kind of price are you looking or hoping for and is it realistic for what you want to purchase? You can also start looking both at houses that are similar to your own and those that are similar to what you want. Compare prices. You might have to pick up the newspaper or some For Sale magazines (usually free). You can also begin calling agents and other resources.
2. Calculate the cost of your mortgage payoff
You'll need to know the amount required to payoff your mortgage in order to sell. You can contact your lender for this information.
3. Figuring the worth of your home
Most real estate agents will gladly help you determine your home's fair market value, however you might consider ordering an appraisal. Keep in mind that although an appraisal costs money, (and the agent does it for free) the appraisal will give you a more appropriate idea of your home's value and might be worth the extra cost.
4. Estimate Your Costs to Sell
Although you're selling to make money, there is some cost to you in order to sell. Some ideas of things you'll need to pay for and probably want to figure out the cost of include:
- Commission to a real estate agency if you plan to use one to help you sell
- Taxes on the sale
- Some seller required fees which might include inspections, surveys, etc.
- Advertising costs to sell, signs, fliers, etc.
- Closing costs (your real estate agent can give you an idea of these costs)
5. Estimate Your Costs to Buy a New Home
When you apply for pre-approval of a new loan, your lender should disclose to you an idea of estimated costs to acquire a new home. Some of these costs could include:
- Down payment
- Home inspections
- Moving expenses
- Title and policy work
- Hazard insurance
6. Estimate Your Proceeds
There should be some profit but here are some ideas to consider before estimating the final amount:
- Make all repairs so that there will be no reason for a potential buyer to submit a lower offer. This does not mean cosmetic repairs are required, but real repairs such as a broken heater, etc.
- If your home is not yet paid off, be sure to deduct your mortgage payoff amount.
- Deduct all selling costs from the total payoff amount.
7. Make Necessary Repairs
Most people don't think of their house as a "fixer-upper" but unless you want your house thought of this way, you may need to consider things that are obviously broken and repair them before you try to sell. Otherwise your buyer might think they have a reason to submit a lower offer.
8. Preparing the House for Showing
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 atmosphere are essential if you want the house to appeal to buyers. Very few houses are always in mint condition. Your house may need a little cleaning and organizing to help it become extraordinary. Great curb appeal, fresh paint, arranging closets or cabinets and clean appliances, drawers or windows help make your house appeal to buyers. Do whatever you can to make your house clutter-free and cleaner than it usually is. This is great preparation for showing the house- be sure to maintain this level of cleanliness for as long as it takes to sell your home.
9. Becoming Comfortable with Allowing People In
If you are really ready to show your house, you have to learn to be comfortable with people coming through… some of these people may eventually live there! Don't ever ask to be present during a showing unless there is an urgent need for it. Why? Because lurking sellers make nervous buyers. No one feels comfortable exploring or inspecting a house, knowing the owner is watching over their shoulder. Also you need to have your house ready for showing at any time, day or night. Some agents won't even bother showing a home that needs 24 hours notice. Make the house accessible, make yourself removable, and remember to be prepared for showing at a moment's notice.
10. If you're ready to sell, LIST IT!!
If you think you're ready to sell, you probably want to make your house visible to potential buyers. You might decide to sell your house for sale by owner. If so, you might want a comparative market analysis (CMA) to help you set your price. Also explore all types of marketing tactics, including print, web and other types of advertising. Although you pay a commission, there are definite advantages to using an agent. Before choosing an agent, here are some things to understand about agencies and to be sure your house is getting the visibility needed:
- Find out what is the commission rate. You can make several phone calls and compare agencies offering the same services.
- Get listed on the MLS (multiple listing service). Find out if the agency belongs to more than one MLS. In some areas there's an overlap of popular neighborhoods, making multiple memberships important.
- Find out how long they want you to list with them, keeping in mind that the time is usually negotiable.
- Find out the average length of time it takes to sell a house in your area. Find out the company average. Compare with other company averages for your same area.
- Find out how long the (potential) listing agent has been licensed to sell real estate. Find out what kind of success rate he has.
- Find out what percentage of the agency's listings sell during the initial listing contract period. This initial period can be as long as six months.
- Find out how often you can expect buyer feedback, whether it be after every showing, weekly, more often, etc. Find out the means for this feedback - written, online, etc. Buyer feedback is a very useful tool because if everyone makes the same negative comment, you might consider resolving the problem.
- Find out if the agent will hold an open house for other real estate agents or for buyers. Find out what other marketing tools he might use.
- Determine how showings are to be handled. If you put restrictions on showing, you may cut down on the number of buyers seeing your home, but you need to be sure you can handle showing or leaving at a moment's notice.
- If you have pets it is an excellent idea to find a place for them during showings. If you have an indoor pet, think of taking it with you when you leave for a showing; if it's an outdoor pet, tie it up outside to ensure both the safety of your pet and the buyer.
- Consider a lockbox for times when you aren't available to be reached. Many agencies place a key inside a box that is secured to your home and then only agents have a key to open the lockbox. Helps your home to be available more, even if you're available less.
- If your new home will be in the same area, ask the agent any questions you might have as a buyer. You may choose to use the same agent to buy and sell.