Selling a home is not as difficult as buying a home, but this may be small comfort to the novice. Understanding the market, putting your home up for sale, and other pieces of the puzzle all have to fit together in order to sell a home profitably and quickly. Here are some ground rules for selling a home.
Research, research and more research:
Most people live in their homes for seven years before selling. That means prices have changed dramatically while you've been living there. To get a sense of the market and the competition your house will face, go to realtor.com, the nation's biggest online site, and check out the homes in your town that go for the price you expect to be asking. Are there many homes you'll be competing with? How do the homes on the market now compare with yours in terms of square footage? Number of baths? What about extras like decks, fireplaces and swimming pools?
Next, take a look around your neighborhood. Are you the only one who hasn't upgraded? Is your home the only one with a carport while everyone else has a finished garage? If you find a big gap between the amenities of your house and those of your neighbors, your expectations for a selling price may be off base.
Going solo:
If you have the interest, the time, and the patience, you may want to consider selling a home on your own. This is particularly attractive to people who live in markets where appreciation rates have been relatively slow. Remember that selling on your own means paying no fat broker commission of 6 percent. Of course, keep in mind that a broker sells homes for a living, and therefore the broker may make enough extra money for you that the commission is covered, plus some. The headaches a broker may save you are also worth something. You'll have to weigh the pros and cons yourself.
Web sites also can provide help. By logging onto ForSaleByOwner.com, you can get your home onto the National Association of Realtors' multiple listing service. The MLS is a detailed electronic database that agents use as their primary selling tool.
Fix it up:
Before you hold your first open house, consider how your abode will look to a complete stranger. Cut the clutter and depersonalize the space so that potential buyers can picture their own belongings in your house. If your home is truly dated, consider some inexpensive but effective pick-me-ups, such as a quick paint job in the kitchen or a new shower curtain.
The price is right:
After you fix up your house, the next thing is to set the right offering price. If you're putting your home on the market at a time when prices are rising, some experts suggest putting your home on the market with a price a little below the going rate. The reason? A bidding war may erupt that nets you a better price than you ever dreamed.
But if the market is weak, pricing a home below market is a recipe for disaster. Anemic real estate markets are not the time for games; set your listing price right in line with recent sales of similar properties.
Another strategy you might consider in tough markets is to offer seller financing. You collect a down payment up front from the buyer that is slightly higher than payments on a conventional mortgage (because you are assuming the bank's risk). Few buyers will walk away from their down payment.
Closing the deal:
Selling a home is expensive. Expect to pay 7 to 10 percent of the house's sales price in various commissions and fees and possibly any repairs you agree to make to seal the deal. Watch out for transfer taxes levied by your local town or county. And, of course, you also have to pay any real estate taxes due to bring you up to date, or prorated taxes. You'll also need to figure out how much money you'll need to pay off your mortgage. Subtract the amount of monthly mortgage payments you'll be making between now and your closing from the amount you still owe on your house. Add back mortgage prepayment penalties.
By Greg Hitchcock