Ten Point Checklist for Home Sellers
The first rule for getting the most from the sale of your home is to pick the right time. If you are planning to sell this year, you might have hit the jackpot. Sellers hold all the cards these days. Prices in most housing markets are an all-time high. As the economy improves, demand is strong but supplies of homes for sale are lower than they have been in years.
Even so, you will not get top dollar for your home if it’s not in great shape. It might not even sell for an average price if you just cut the grass and slap some paint on the interior. Surf the Homes.com listings in your Zip code. Note that some houses seem to linger on the market forever until their owners either pull these losers from the market or slash the price. Even in the hottest markets, lazy sellers pay the price for bad preparation.
Today Americans own their homes an average of ten years. If you are like most homeowners, chances are you have put off some significant repairs, upgrades and decluttering. Getting your home ready to sell is going to take some time, so start early.
Here’s a ten-point checklist to help your wring every dollar out of your home.
Plan early and inventory your needs.
At least three months before you plan to list your home — maybe longer — make a thorough and honest inventory of your home’s condition. Your major systems: heat, AC, electrical, and plumbing should be inspected. So should your roof, basement, windows, and foundation. Hire a home inspector to go through your home to find problems you may have missed; the same problems he would note if he were he working for a buyer. Decide which of the costly ones you are going to fix and which you take into consideration when you price the home. Remember, you and your agent are legally responsible for disclosing problems with your that will affect its value.
Make a timeline.
When you make a timeline at the outset of the selling process, you decrease the possibility that you’ll get sidetracked and run short of the time you will need for each step. Once you know if there are any major needs, like a new roof, you can plan out the time you will need for the entire process. Be sure to include the time between accepting a contract and closing, which can vary as must as 40 to 90 days, depending on your market.
Unless you just bought the house that you are selling, you’ll probably need some serious money to finance repairs, fix up the place and stage it professionally. Using some of the equity in your home to finance these tasks make sense. You will be able to pay back the loans at closing without incurring much interest at all.
Have an appraisal done.
Your lender will require an appraisal if you refinance your home or apply for a home equity loan. An early appraisal is very useful when setting your price. It serves two other important needs as well. It will protect your sale from a low appraisal later in the process. Your buyer’s lender will insist on his own appraisal and should his appraisal come in much lower than the sales price, your buyer may not be able to afford to the borrow the difference and the transaction will fail. Secondly, your appraisal will enter databases that other appraisers will use, including appraisers hired by future buyers’ lenders. So your appraisal will set the bar for others, and it is unlikely the value will change.
If you are hiring an appraiser, look for a senior, respected appraiser who works mainly in your neighborhood. Hire him to appraise your home and share with him all the information you can that will help him — costs of improvements you have made, recent home sales that a comparable to your house, and local homes that have recently gone onto the market. Walk him through your home and point out “extras” that should add value. Brief him on schools, transportation, and pending neighborhood changes that will make your home more valuable.
You will be surprised by the amount of stuff your family can collect in just a few years. It takes time to go through it all, so start early and keep at it. Sell, donate, and trash everything you don’t want to keep.
Fixing up your front and back yards is a cheap way to increase your home’s curb appeal. New plantings, reseeding, fertilizing, and new construction takes months to look good. Avoid that last minute look and plan your landscape improvements months in advance.
Shop for an agent.
Even though selling their home is one of the biggest financial transactions in the lives of most Americans, nearly three out of four sellers, 72 percent to be exact, contact only one agent to help them sell their home. Many people shop harder for a beauty salon or a veterinarian for their pets. Today, more and more listing services help consumers find out more about agents. At the very least, sellers should talk to three before making a decision.
Shop for contractors.
You may need a lot of contractors to help you get your home ready. Your agent will have a Rolodex full of good ones, but they may not always be the least expensive. You want someone competent but not necessarily top rate to wax the floors, take down trees, seed the lawn, and paint the interior. If you’re not the one who is going to be living there, why spend top dollar? The next owner may want different colors or a new deck where you just laid expensive turf. Use your Groupon, Angie’s List, and HomeAdvisor discounts and coupons to get good deals from contractors who are looking for work.
Price to sell.
In addition to the appraisal mentioned above, ask your agent for a competitive market analysis (CMA). It will update the comps and prices from your appraisal and analyze current local market trends. Use your research to set a price and listen to your agent. Expertise in pricing is one of a real estate professional’s most valuable skills. They can factor into the equation your personal situation, such as the speed with which you need to sell, the amount you may owe on your mortgage and home equity loans, your closing costs, and features of the home that may make it difficult to sell.
Pricing slightly above market makes sense and gives you a good bargaining position with buyers but unless you live in one of the few markets in the nation where prices are rising at double-digit rates and cash buyers are abundant, don’t be greedy. You might regret it. Even if you find a buyer willing to pay an inflated price, the odds are good his lender will get a low appraisal and the deal will fall through and you’ll be back at square one. Should your inflated price fail to attract an offer after three months or so, you could find yourself forced to reduce the price. Price reductions remain on your listing, and more than one could stigmatize your home as a “problem” property.
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