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 or selling it for sale by owner. Every bit of prep work you do helps you get the most return from your investment.
- Get Pre-Approved for a Home Loan
I’ve known sellers who signed a contract to sell their house before they knew if they were 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.
- Check Your Mortgage Payoff
Call your lender to check the payoff for your current home mortgage.
- Determine How Much Your House 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 order an appraisal.
- Estimate Your Costs to Sell
-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.
-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.
- Estimate Costs to Buy a New Home
Calculate moving expenses, loan costs, downpayment, 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.
- 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?
- 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.
- Get the House 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.
-Everything from floors to windows must be spotless, including the oven and other major appliances. Skylights should be crystal-clear, too. Do not forget to make bathrooms shine!
-Pack away even more of your family photos. Buyers should be allowed to imagine their personal possessions in the home, not look at yours.
-Put away your personal collections so that buyers don’t get so interested in looking at them that they forget to look at the house.
-Make the House More Spacious – Remove excess furniture to make rooms less cluttered.
-Store boxes in an out of the way location or rent a temporary storage unit so you can de-clutter every part of the house.
-Expose Desirable Features – Remove rugs if they hide nice hardwood floors.
- Get Ready to Let the World 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.
Your goal is to make home buyers fall in love with the house as soon as they see it from the street. And that comes with a bonus–a great overall impression is often enough to make a buyer more lenient about minor repair issues.
Every house is different, and no one expects you to be a professional home stager–but taking the time to prepare the house to the best of your ability can put extra dollars in your pocket, and in less than average time.