Before You Sell Your
House….
So you are
considering putting your home on the market. Don’t make a hasty
decision; do your homework. Your first step should be to read the
following guide.
1.
Get pre-approved for a home
loan. Just because you have a home loan now, don’t assume you will
automatically qualify for another. If your financial circumstances
have changed, you may no longer qualify or you might not be able to
afford the replacement home you want. Interest rates are lower than
they have been in decades, but the cost of a home has increased,
too.
Start looking for two types of
homes: homes that are similar to what you would like to buy and
homes that are similar to your current home. How do these two
categories of homes compare in price? Are you going to be able to
sell your current home at fair market value and afford the home you
want to buy?
2.
Call your current mortgage
company and find out your payoff balance. Check to see if there
will be any penalties for early payoffs. Make sure any second
mortgage or home equity loan balances are included.
3.
Determine the fair market
value of your home. Real estate agents are usually willing to
prepare market evaluations based on current sales as a FREE
service. However, you might prefer to have an appraisal done.
4.
Determine how much it will
cost to sell your home. Items to be included are: real
estate commissions (if you use an agent), advertising costs (if you
sale by owner), attorney’s fees, document preparation, termite
and/or septic inspections, prorated property taxes.
5.
Determine the costs of buying
a new home. Items to be included are moving costs, utility
deposits, loan costs, inspection fees and homeowner’s insurance
coverage. Your lender should be able to give you an estimate of
these costs when you are pre-approved (Good Faith Estimate.)
6.
Calculate your proceeds.
Deduct your mortgage payoff from the fair market value of your
home. Next, deduct the cost to sell your home. This amount
represents your proceeds. Will your proceeds be enough to cover the
costs involved in buying a new home? If not, do you have cash or
funds from some other source to make up the difference?
7.
In order for your home to sell
quickly and for fair market value, make all necessary repairs before
putting it on the market. Any item that is broken or inoperable
will give buyers reason to classify the home as a “fixer upper” and
either move on to other properties or make a lower offer on yours.
8.
Get your home ready to show.
Start with the yard. Clean it up, plant some flowers. Curb appeal
is the “first impression” your home will make. Clean everything
inside. Closets, too. Paint if necessary. Follow the “less is
more” theory and get rid of clutter.
9.
Make your home available to
sellers. Be willing to have your home shown on a moment’s notice.
Buyers generally look/offer/buy on their schedule—not yours.
