What You Should Know Before You Sell Your Home

Before you find that coveted real estate agent to sell your home, have you stopped to ask yourself, “Why do I want to sell my home in the first place?” Answering this very simple question can make letting go of your current home and finding another home much easier. Once you understand your reasons for selling and your reasons for moving, you’ll be able to let go of your emotions—emotions that can get in the way of finding sound offers.

Repairs Check List

After you have a handle on the emotional aspect of the deal it’s time to take a real, hard look at your home—from the buyer’s viewpoint. Walk through your home and ask, “If I were to buy this house today, would I want it?” Remember, you’re to leave your emotions at the door. The idea is to remain object so that you can see areas in your house that need improvement and then determine if it would be cost-effective to make those changes. Take a clipboard with you and write down your thoughts:

• Are there chips in the wall?
• Does the carpet smell, have stains, or tears?
• Is the wall paper pealing?
• Does the tub or sink contain rust stains?
• What shape is the roof in?
• Does the garage door close properly or is there a gap when closed?

When deciding on whether or not to fix what’s broken, think about this: Potential buyers will make a lower bid on the house if they have to put in repairs just to make the place livable or to make it feel like home.

Get An Appraisal

After you’ve made your list, it’s time to figure out what your home is really worth. Because banks do not want to lend more money than the house is worth, it’s important to understand the fair market value of your home. There are two ways to get an estimated appraisal on your home: the comparable home sales and listings through your local real estate agent and hiring a licensed real estate appraiser—which are subject from one appraiser to the next. But keep in mind that the appraisal alone doesn’t determine the selling price of your home—the buyer does.

Your appraisal and/or comps will include things like, comparison pricing to three or more homes in your local area, what price the market will bear, reasons why the property’s value may be lower than the homes in your area (think defects and flaws), and what issues must be fixed before the home can sell (think termites, water damage, mildew, etc.).

Estimated Costs

After the estimated appraisal has come back it’s time to figure out what costs are involved. If you’re selling your house simply to have something new, it might not be in your best interest to sell. If, however, you are selling because of a job relocation, an expanding family, or a safer neighborhood, you need to understand what costs are involved in selling your home.

Costs are broken down into three categories and varies from state to state as well as circumstances, but here’s a good idea of what to expect:

Repairs and cosmetics: cleaning service, painting, new carpets, etc.

Relocation: moving truck, movers, deposit on utilities, etc.

Sellers Costs: Costs to consider when selling your home are: commissions for real estate agents, closing costs, property taxes, prepayment penalties, title insurance, transfer tax, one year of home warranty insurance, and any major damage disclosed in the appraisal like roofing, termites, septic tank, etc.

Since real estate agents deal with the home sales on a daily basis, it would be wise to seek the council of a trusted real estate agent.

Potential Profit

Once all costs are estimated and the appraisal has come in, call your lender to find out what the pay-off amount would be should you sell your home today. Pay-off estimates are usually good for thirty days. Take the amount you owe, plus all costs and subtract that amount from the selling price of your home. Will you receive a profit or a loss?

In the end, understanding the market value of your home based on realistic measures will help you price your home fairly and competitively. Remember, if you overprice your home, it can actually hurt you in the long run.