10 Steps You Must Take Before You Sell Your Home

The home selling process varies from state to state, but there are some important steps that you should take before you put your house on the market--all steps that protect your interests and help you get the most return from your investment.  NOTE:  Remember, in most places now in the USA, we are dealing with a "Buyer's Market".  This means there are more homes on the market to choose from so buyers can afford to be picky.  This is not true everyplace, like CA, FL, NY, but most places.  Check with a local REALTOR for more local infor on the housing market where you are. 

1. 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.  The best situation is to find a lender that will guarantee your rate in writing!  This also speeds up the home buying process.  If you plan to sell your home yourself (FSBO), note that this is where most deals fall apart. 

How To Start Researching
Start looking for two types of real estate: houses that seem to match the one you'd like to buy and houses that are similar to your current home.   If you own your current home, decide if it is necessary for you to sell before you can commit to another purchase. (REALTOR.com is a great place to begin.)

How do the two categories compare in price? Can you handle the difference if you're planning a step up? 

• Find homes in free For Sale publications, often available outside grocery and convenience stores.
• Search the Internet for homes for sale in your area and read real estate ads in your local newspapers. You won't find house locations without making phone calls, but browsing the general market will get you off to a good start.
• Visit Open Houses to see your competition and/or to see exactly what is available locally.

2. Check Your Mortgage Payoff

Call your lender to check the payoff for your current home mortgage. You'll need the figure to complete Step 6.

3. Determine How Much the House Is Worth

Real estate commission if you use an agency to sell. (Consider the advantages the agent/broker offer for the active marketing of your home)

4. Estimate Your Costs to Sell

• Real estate commission if you use an agency to sell.  (Consider thoughtfully the advantage of a good agent/broker and the marketing tools they make available.)
• Advertising costs, signs, other fees if you plan to sell by owner.
• Attorney, closing agent and other professional fees.  Shop around!  This can be a real variable.
• Excise tax for the sale.  Transfer stamps. 
• 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, local building codes, sewer dye tests etc.).
• Real estate agents deal with transactions every day and can give you a very close estimate of seller closing costs, but don't jerk their chain.  The preparation of these reports and cost sheets takes time and effort.  If you are not using an agent, don't ask too many "favors."

5. Determine Your Costs to Acquire a New Home

Deduct your mortgage payoff from your home's fair market value.

6. Calculate Your Estimated Proceeds

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 acquire a new home? If not, do you have cash or other funding to make up the difference?

7. 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, but to items in need of repair. Anything that's obviously broken gives potential buyers a reason to submit a lower offer.

Double check mechanics (plumbing, electrical, furnace/a-c).  Check windows, chimney, doors, retaining walls, basement (mold, wetness, insects).

8. 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 atmosphere are essential if you want the house to appeal to buyers.

Smells are the greatest deterrant to a prospective buyer!  Ask neighbors or friends if they smell anything foul (pet smells, tobacco smells, food smells, moisture smells - these are the most common)

9. Get Psyched Up to Let People In

If you're listing with a real estate agent, she'll no doubt 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.

Unless there's a real reason for it, don't ask your agent to be present for all showings. That's 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.  We understand your home cannot be accessible 24/7, but ideally, it is good to be as ready as possible at any time.  Be sure to discuss this with your agent, if you are using one.

10. You're Ready to Sell. 

Once you have prepared your home,  done the marketing research (or had your agent do it), obtained your written guaranteed loan-approval letter, you are ready to SELL, SELL, SELL!!

*If you have any questions about this process or about what is contained in this article, please contact me, and I will try to help.