Selling
Your Home
The road map to selling your home.
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Decide
to Sell
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Prepare
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Set
a Price
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Accept
an offer
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Close
the Sale
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Prepare
to Move
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Decide
to Sell
"Consider
market conditions and the consequences of selling before you make a final
decision. ".
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When
deciding to sell your home, it helps to know whether you're in a seller's
market with low inventory and rising prices, or a buyer's market with
lots of houses for sale. It's also important to understand what kind of
homes sell best in your area. If you're not under pressure to sell, test
your decision by considering factors such as:
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Financial
impact
It costs thousands of dollars to sell a property and relocate—often
as much as 15 percent of the sales price of your home by the time
you count the real estate commission, closing fees, and moving costs.
The less equity you have in the house, the greater the financial hit.
It pays to run the numbers before you sell.
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Timing
Consider the timing of your sale relative to the market and to your
home equity. A slow market may negatively affect your sale. And if
your equity is low, you could end up bringing cash to the closing
to pay off your lender. The more equity you have in your home, the
better equipped you are to cover your sales costs.
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Tax
consequences
Though capital gains tax laws have relaxed to the point where most
Americans don't have to pay tax on real estate profits, you will likely
have to pay if you've lived in your home only a short time. Make sure
you know where you stand.
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Alternatives
to selling
If you're selling to get away from crime, troublesome neighbors, or
because you want more space, do a reality check. A look at crime statistics
may show you're safer than you would be in a new neighborhood; a tall
fence could shield you from neighbors. And remodeling your current
home could give you the extra room you want.
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Prepare
to Sell
"Put
your house in order before you put up the For Sale sign".
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When preparing to
sell your home, the best thing you can do is think of the house as a
commodity. Try to separate yourself emotionally from your house and
look at it through the eyes of a buyer. Decide whether you want to hire
an agent to handle the sale, then do whatever it takes to put your home
in its best condition.
Prepare for the
sale by doing the following:
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Get
a pre-sale inspection. A pre-sale inspection can ward off costly
surprises from the buyer's inspector. Inspections usually cost $300
to $400, but if the inspection reveals major termite damage or the
need for a new roof, it could affect your decision to sell as well
as your price. Always look for a qualified inspector.
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Neutralize
your decor. Eccentricities that you find charming may not charm
a buyer. Consider replacing out-of-date carpeting, painting odd-colored
rooms, and otherwise polishing your home's appearance. Pare down visible
personal possessions. You may also want to kennel your pet during
this time, and hire extra cleaning help while your house is on the
market.
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Set
a Price
"To
set the best price for your home, first learn how home values are determined".
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Your home's value
is ultimately what a buyer is willing to pay at any given time. Your
final list price may depend on many factors: If you want to sell quickly
or you are in a buyer's market, you may decide to set your price lower
than market value. On the other hand, if you're in a seller's market
where multiple offers are common, you may want to set your price higher
than market value.
To arrive at a price:
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Ask
an agent. If you plan to work with a listing agent, interview
several before you choose one. A good agent will give you an honest
assessment of your home's value. When deciding which agent and sales
plan to go with, consider the current market and your home's salable
assets as well.
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Know
how to read a comparative market analysis. A comparative market
analysis should take into account repairs, improvements, and annual
costs (such as property taxes) of your home, in addition to its size,
features, and amenities. Expect to get an analysis of recently sold,
comparable homes in the neighborhood, and a list of comparable homes
currently for sale.
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Accept an Offer
"When
the offers start coming in, be ready to negotiate to get the best deal".
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You
may not have to wait long for your first offer. If the market is active,
you may get one the day you list. In most cases, however, you will wait
anywhere from 30 to 60 days for an offer. This can be an emotional process,
especially if offers come in far below your list price, or your home has
been on the market for several months.
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Decide
on the lowest offer you'll accept. Avoid sharing this figure with
anyone, including your agent, as the number may change during the
time your home is on the market. Be careful not to telegraph your
lowest expectations to a buyer.
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Get
everything in writing. This is for your protection and the buyer's.
Documenting the process helps avoid confusion and potential legal
problems down the road.
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Don't
get personal. You want to know as much as possible about the buyer's
motivation—and the buyer wants to know about yours, as well. If possible,
avoid discussing your situation in terms of any need to sell. Don't
overreact if you are presented with an offer you find insulting.
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Play
fair. If you are selling in an active market, work out an orderly
procedure for receiving more than one offer at a time.
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Close
the Sale
"Keep
your house in good condition and be ready to deal with any problems that
arise before the closing date".
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At
this point, the buyer is busy with financing; until the sale closes, you
are responsible for keeping your property in the same condition it was
when the buyer saw it last. The closing date should be clearly specified
in your sales contract, which should include deadlines for the buyer to
sign off on contingencies. Make sure the buyer meets any deadlines you've
set.
Be ready to deal
with any problems that may crop up:
Problem: Unsatisfactory
home inspection
Solution: If the fix is major, you may want to split the cost of
the repair with the buyer, or give the buyer a cash credit at closing
to cover the repair. If the fix is minor or you are selling in an active
market, your sale might go through without any concessions on your part.
Preventive measure: Make sure that your sales contract is specific
in its inspection contingency and doesn't allow for the entire transaction
to be renegotiated on the basis of the inspection.
Problem: Low
appraisal
Solution: Your deal could fall through if the buyer's appraisal
comes in lower than the agreed-upon sales price and the lender refuses
to issue a mortgage. Ask for another appraisal if you think the buyer's
appraisal was wrong, or renegotiate your price. Another option is to
offer seller financing for the dollar difference.
Preventive measure: Give the appraiser the most recent comparable
sales from your neighborhood, and make sure your home is in top condition.
Problem: Cloud
on the title
Solution: Title problems can take several forms, including unsatisfied
liens against your property, delinquent taxes, and encroachments on
the property line. In order to clear the title, you will have to pay
any liens or delinquent taxes. Title companies are used to dealing with
encroachment issues, which may be resolved with some kind of insurance
policy.
Preventive measure: Check your title before you sell and make
sure it is clear.
Problem: Buyer's
remorse
Solution: Occasionally, an uncertain buyer will decide to pull out
of the deal regardless of the consequences. Try to work with the buyer's
agent to determine the problem. You may be able to suggest a solution
that reassures the buyer and rescues the deal. (If not, you may be able
to keep the buyer's deposit.)
Preventive measure: Learn all you can about the buyer's motivation
before you accept an offer. Also, be sure the sales contract allows
you to keep the security deposit.
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Prepare
to Move
"Once
you've closed your sale, file your paperwork and begin the transition
into your next home".
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Once
you've sold your home, you can proceed with your move and tie up the loose
ends:
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Bank
your money.
If you are planning to buy another home, decide how much you
need for a down payment and moving costs. If you made a profit on
your home sale, it may be wise to make a minimal down payment on your
next home, and invest the rest. This will depend on your tax situation
and how the numbers play out. Consult your financial advisor. If you
aren't buying another home right away, you may want to opt for a combination
of long-term and short-term savings and investment plans.
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Send
change-of-address notices. Avoid getting caught by late payment
fees: Before you move, send change-of-address notices to creditors,
professional associations, and publications to which you subscribe.
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