Essential Home Selling Preparations
The 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. Every bit of prep work you do helps you get
the most return from your investment.
1. Get Pre-Approved for a Home Loan
A common mistake home sellers make is they try to
sell their house before they knew if they are 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.
2. Check Your Mortgage Payoff
Call 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 Home Is Worth
Determine 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
schedule an appraisal.
4. Estimate Your Costs to Sell
- Real estate commission if you use an agency to
sell.
- 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, down
payment, 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 Repairs
Make 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 Home 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 In
If 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.
10. Contact us to guide you through
the process
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