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MEMBER OF THE NEW YORK STATE REAL ESTATE BOARD Licensed Broker for The Corcoran Group |
If you've decided to sell your home, chances are
you're caught
up in a host of emotions. You may be looking forward
to moving
up to a new dream house or facing the uncertainty
of a major
move across country. You may be reluctant to leave
your memories
behind or eager to start new adventures. Whatever
turbulent feelings
you're experiencing right now, there are plenty
of practical matters
that need your attention.
Keep in mind the following considerations to help
the whole process go more smoothly.
Time
Becomes Money
It's a good idea to place your home on the market
as far in
advance as possible of purchasing a new one.
If you find a new home first and then try to sell
your present home,
you may wind up with two mortgages. If this does
happen, ask
your real estate agent or banker about a bridge
loan to help
you make the double payments. Lenders use the
same criteria
for offering bridge loans as they use for mortgages.
Should you
choose to accept a bridge loan, beware of the
expense; during
the term of the loan you must continue to pay
both mortgages.
Shop around for the best terms.
Keep in mind that when people move, sell and buy,
there usually
is a domino effect. Closing and moving dates have
to be coordinated,
and the more firmly everyone commits to a window
of dates and
sticks to them, the better for all involved. Put
all agreements about
dates in writing, and protect yourself by negotiating
financial penalties
for failure to comply.
Check
For Appeal
A home that's visually appealing and in good condition
will get the
interest of potential buyers. Use this checklist
to view your property
through an outsider's eyes.
Is your home tidy?
Is there a lot of clutter
here and about?
Do you have too much
furniture?
Are the windows clean?
Is any room or area in
desperate need of painting?
Is your entranceway presentable
and clean?
Making
Improvements
Fortunately, there are plenty of easy improvements
you can make
to your home's interior without spending a lot
of money.
Cleaning is No. 1. Your windows, floors and bathroom
tiles should sparkle.
Make sure you have clean heating and air conditioning
filters.
Shampoo dirty carpets, repair dripping faucets
and oil squeaky doors.
It may not seem fair, but a peek in the oven may
be the hallmark by
which a buyer judges how well you have kept up
your home.
Remove unnecessary clutter from the rooms and closets.
If your
home is crowded with
too much furniture, consider putting some
things into storage. If a room needs a fresh coat
of paint, use a
neutral off-white. Think, too, about how your
home smells.
You may be used to the smell of a pet or cigarettes,
but such odors can be a strong turn-off to others.
Finally, set a mood for the buyer. Play some nice
soft music.
Make your house homey with live flowers and fresh
guest
towels in the bathroom. Place scented potpourri
around the
house or, on the day you're expecting a potential
buyer,
pop a batch of frozen cinnamon rolls into the
oven for a welcoming aroma.
Burn some incense.
It's attention to the basics -- anything that says "this home has been carefully maintained" -- that will help you get the price you want.
Go It
Alone--or Choose an Agent?
Some homeowners decide to sell their homes themselves
in
order to save the commission charged by a real
estate agent.
The commission rate may vary, depending on where
you live
or what agency you choose, but it is generally
upwards of 5%.
However, handling your own sale means you will
be responsible
for placing ads, effective marketing, getting
the word out to the
brokerage community, showing your home to strangers,
interviewing and qualifying, credit checking,
being available
full-time for answering calls, answering inquiries
and scheduling
viewing times, handling and negotiating offers,
handling and
working with brokers.
What's more, buyers
who know you are saving on an agent's commission
may offer less for
your home, wiping out the financial incentive to do it all yourself.
You may decide an agent's commission is a bargain
the
first time that a would-be buyer shows up unannounced
at dinnertime. Also, be aware that a real estate
agent
knows a lot more about the business of selling
a home than you do.
Here are some of the advantages of using a professional agent:
1. They will help you establish a fair asking price for your home.
2. They will promote your home to other agents
and list your
property in multiple
listing services.
A multiple listing service
is a book or computer
database that all real estate
agents who
subscribe to the service can access.
Your home will get exposure
to all those agents, one of
whom
may have the perfect
buyer.
3. They will create, place and pay for professional eye-catching advertising for you.
4. They will photograph your apartment and market it on the World Wide Web
5. They will schedule appointments to show
your home to prospective buyers even
when you are not
there.
6. They can weed out buyers who will not qualify for a mortgage.
7. They can refer you to sources for insurance, inspections, legal counsel and financing.
8. They will help you negotiate with the buyer.
9. The will prepare and submit board packages
Finding
The Right Agent
If you decide to sell through an agent, ask friends
and neighbors for recommendations. Use an agency
that has been around for awhile.
Find one that a good reputation. Taking a walk
through
your home with an
agent should give you a feel for how
that person will handle prospective buyers.
Ask prospective agents
how they plan to market your home.
Don't sign with an agent just
because he or she suggests the highest asking
price.
Sign for a limited period of time -- usually three to six months.
Setting
a Fair Price
Naturally, you want to get top dollar for your
home.
But, at the same time, you don't want to scare
off
potential buyers with a price tag that's too high.
Setting an artificially high price may cause your
property to languish on the market for months.
Reducing your asking price later on may lead buyers
to wonder if there is something wrong with your
home.
Here are some of the factors to consider in pricing
your home.
Your location
Economic conditions
Supply and demand in
the local housing market
Seasonal influences
Local schools
Average home prices in
the neighborhood
Your home's extras --
pool, fireplace, central air, etc.
Market
Analysis
To determine the value of your home, you probably
will want the advice of a real estate agent or
appraiser.
Ask your agent to prepare a market
analysis for you,
showing the recent selling prices of three
neighborhood
properties comparable to your own. The agent can
help
you adjust for the unique
features of your own property.
Qualifying
A Buyer
Either you or your agent will want to quickly
weed out
potential buyers who cannot really afford to purchase
your home. A number of factors will help determine
whether or not you are wasting your time
negotiating a sale.
The buyer's debt and credit
history
The buyer's current income
and employment
The buyer's cash position
and availability of a down payment
The length of time the
buyer needs before closing on your home
How interested the buyer
appears to be in your home versus others
Seeking
Legal Representation
When selling your home -- particularly if you
are selling
on your own -- it's a good idea to be represented
by an
attorney. Look for an attorney with expertise
in real estate transactions.
When a potential buyer
puts an offer in writing and you
accept it, the signed acceptance becomes the sales
contract.
Your attorney will be present at the actual closing
to protect
your interests and can assist you
with the following elements of a sales contract:
1. The sale price
2. What is included in the sale price --
draperies, carpeting, light fixtures, kitchen
appliances, etc.
3. The amount of the down payment
4. The date of settlement and possession date
5. Contingencies to the sale-inspections,
required improvements, legal review of the
contract by the
buyer's or seller's attorney, etc.
6. The amount and length of the mortgage
loan, interest rate and time limits to secure
the loan
7. Determining which closing costs are to be paid by the buyer and which by the seller
Tax Implications
You Should Know About
Selling a home can have a major impact on your
federal and state tax returns. Check with your tax consultant
on the factors that may affect taxes resulting from the sale of your home.
For example:
1. Gain from the sale of a prior home on which tax was postponed
2. Whether you purchased the home or acquired it by gift or inheritance
3. Whether you used your home partly for business or rental
4. Costs associated with selling your home
5. Home improvements or additions, which may help to offset capital gains
6. Your age (If you are 55 years of age
or older, you may
be eligible for
a one-time-only capital gains
exclusion
of up to $125,000
on the sale of your home.)
Purchase of another
home of equal or greater value within two years prior or
subsequent to
the sale of your current home
In certain cases you can
exclude up to $250,000 in gain
($500,000 for
married couples filing a joint return)
on the sale of property
that was your principle
residence for at least
two years.
Generally, you can use
this exclusion every two years
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MEMBER OF THE NEW YORK STATE REAL ESTATE BOARD Licensed Broker for The Corcoran Group |
A Home for You and Your Family Publication
Series, North Carolina Cooperative Extension
Service, Housing & House Furnishings,
box 7605, Raleigh, NC, 27695-7605 (single copies free).
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