What You Should Know About Selling Your Home
Before selling your home, before you start making repairs or marking dates on your calendar for an open house, it's smart to prepare a home selling plan. Of course, you probably want the most you can get, but you could make costly home selling mistakes along the way if your enthusiasm for quickly selling causes you to run out and stick a for sale sign in the yard before you're fully prepared to sell.
I've seen bad stuff happen to good people.
Motivation for Selling
Explore your reasons for selling. Everybody has a reason to sell. If you aren't truly motivated nor committed to selling -- if it just struck you one morning that you should move to the other side of town and you haven't completely thought through the process -- you could be setting yourself up for disappointment. Maybe this is not the time to sell for you. Perhaps spring would be better?
If your reason is not valid, you could later regret selling. Try comparing the pros and cons in a written list to determine if you are making the right move. Talk to trusted professionals, and don't ask a real estate agent because a real estate agent will invariably say now is the best time to sell, like trained squirrels.
Buying a New Home
Most people who sell do so to buy another home. Put together a list of neighborhoods where you may want to live and drive through those areas.
Attend Sunday open houses. Check out pricing between newer homes vs. older homes. Weigh your options. You might find you prefer to stay where you are. If you can't find any homes that interest you, perhaps you need to reassess your goals.
Call Real Estate Agents
Ask each listing agent to present a comprehensive marketing plan that explains what they will do to market your home. In addition, ask the agents to prepare a comparative market analysis for you and ask each for advice about the following, as opinions will vary:
- Preparing Your Home for Sale: Compare suggestions and consider accepting the most sound advice. Generally, you will want to move out bulky and excess furniture. Stick extra stuff in the garage or a private storage unit.
- Repairs Before Selling: Not all resale repairs will pay off. You don't want to spend a lot of money making improvements but you do want to repair obvious maintenance issues, if any have been neglected. Ask for professional guidance or you will probably spend more on things you don't need to fix.
- Home Staging: You can hire a professional stager, ask your agent to help stage or stage it yourself. You will get more for your home if it is staged. Staging tends to pay for itself, over and over.
- Home Pricing: Do not select an agent based on suggested sales price. Some will overbid each other to get the listing. But do not overprice. Homes that are overpriced often sell for less than market value. Try to compare similar homes of similar square footage within the past 3 months to determine value.
- Net Profits from Selling: Many agents will prepare two net sheets for sellers, each with a low price and a high price. This way, sellers can be prepared for the worst and hope for the best. If the lowest net price will let you buy the home you want, it's time to find financing and get preapproved.
Find a Lender
First, call your existing lender to find out exactly how much you need to pay off. You should order a beneficiary statement. Then check out new financing offers from your own lending institutions and credit unions. Ask for an estimate of costs. Compare rates and fees, but realize almost everybody has the same ol' bag of money. Also, ask for referrals to mortgage brokers from agents. Often, mortgage brokers have more flexibility to discount rates and are more competitive.
Make sure your are comfortable with your loan officer, and that the person has plenty of experience.
It can mean the difference between sitting on top of your boxes, being ready to move and finding out your loan did not pass underwriting and you are not closing vs. a trouble free transaction.
- Get a loan preapproval letter, so you know how much of a mortgage you will qualify to obtain.
- You don't need to apply for the maximum mortgage, and a lower mortgage payment might make you more comfortable in the long run.
- Compare mortgage loan types and choose wisely.
Sell Before Buying
The moment your home goes on the market, you might be tempted to bounce around online looking at homes on the web. Next thing you know, you'll want to make an appointment to view a few homes. Don't get carried away by virtual tours and beautiful photographs of your dream home. It is almost always more profitable to sell before buying.
Yet, no matter how much it makes sense to sell first, and sellers will nod their heads and agree with my position, they still tend to want to buy a home before selling. What are ya gonna do as an agent? Well, you go with the flow and make the best of it.
At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.