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A List Before You List Your Home
The home-selling process differs from state to state, but there are some essential steps most home sellers should take before listing a house with an agent or selling it for sale by owner.
• Get pre-approved for a home loan and a home-equity line of credit. It is not at all uncommon for sellers who have signed a contract to sell their house before they know if they were qualified to buy another. Yet their financial circumstances could have changed since their last purchase; to avoid these problems, take a few steps beforehand. Get pre-qualified by a lender you trust, then research the housing market in the area where you wish to live so you have an idea how much it will take to buy a substitute home.
Start looking for two types of real estate: homes that seem to match the one you'd like to buy, and homes that are similar to your current home.
Before you're ready to list your home with an agent or sell by yourself, consider taking out a Home-Equity Line of Credit. Doing this before you list your home gives you the option of having readily available money for down payments and closing costs on your new home, typically at a better rate than after a home is listed for sale.
• Determine how much your house is worth. Real estate agents will usually help you determine your home's fair market value as a courtesy, but you might want to take it a step further and order an appraisal.
In theory, appraisals are objective estimates of value. But several different appraisals can yield several different numbers. For example, an appraisal that's been done for a possible refinance may have been slightly inflated to encourage that refinance. But you need to realize that the true value of a house is what someone will pay for it.
• Check your mortgage payoff. Call your lender to check the payoff for your current mortgage. That will help you estimate how much money is at your disposal, and what you can spend or stretch for a new mortgage.
• Estimate your costs to sell. There's the 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; county and/or state transfer tax for the sale; prorated costs for your share of annual expenses, such as property taxes, home-owner association fees; and any other fees typically paid by the seller in your area.
• Estimate costs to buy a new home. Calculate moving expenses, loan costs, down payment, transfer taxes, recording fees, home inspections, title work and title policy, paying for a new hazard insurance policy - all expenses related to buying a home.
• 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.
• Make necessary repairs. Correct all needed repairs, unless you want the house to be regarded as a fixer-upper. With the markets in our area changing from a seller's market to one between sellers and buyers, homes in great shape will sell in the shortest time at the highest price.
I'm not referring to cosmetic updates - just items in need of repair. Areas of concern are mold and mildew stains, plumbing and electrical issues, yard issues and poor roof conditions.
• Get your house ready to show. Most houses need at least a little cleaning up before they are shown to potential buyers. Great curb appeal, fresh paint indoors (and sometimes out), organized closets and cabinets, sparkling windows and appliances, and a clutter-free look are all essential.
• Hire the right agent. Sellers should interview several agents, small and large. Get references and success stories. You may not benefit by opting for an agency's top-volume seller. That top-producing agent may have listed 40 homes last year and sold 30, but another agent may have listed 15 and sold 14.
• Get psyched to let people in! If you're listing with a real estate agent, he/she will ask you to leave during times the house is shown. Why? Because sellers that hang about make buyers nervous. People don't feel comfortable inspecting the house when they feel they're intruding in your personal space.
So unless there's a valid reason for it, don't ask your agent to be present for all showings. Get over it, and make the house accessible.
Andrew Lasner is Realtor and a senior real estate specialist at Keller Williams Preferred in Newtown. He can be reached at 215-860-0800 or e-mailed at: Andrew1 @comcast.net.