For most people, selling their home means cashing in their biggest asset. In other words, it must be handled with great care if you hope to protect-and capitalize on-your investment.
These tips will give you the tools you need to maximize your profits, maintain control, and reduce the stress that comes with the home-selling process.
Tip #1 - Know why you're selling.
The reason you look closely at why you want to sell is that your motivations play an important role in the process. They affect everything from setting a price to deciding how much time and money you'll invest to getting your home ready for selling.
For example, what's most important to you: the money you walk away with, ot the length of time your property is on the market? If your goal is a quick sale, that can dictate one kind of approach. If you want to maximize your profit, the sales process will almost certainly take longer.
Tip #2 - Once you know, keep it to yourself.
Your reasons will affect how you negotiate the sale of your home, but they shouldn't be given as ammunition to the person who wants to buy it. For example, a prospective buyer who knows you must move quickly has you at their mercy in the negotiation process. When asked, simply say that your housing needs have changed. Your reasons are nobody's business but your own.
Tip #3 - Do your homework before setting a price.
Settling on an offering price shouldn't be done lightly. Once you've set your price, you've told buyers the absolute maximum they have to pay for your home. The trick for the seller is to get a selling price as close to he offering price as possible. If you start out by pricing too high, you might not be taken seriously by prospective buyers and their agents. A price too low can result in selling for much less than you had hoped for.
Setting your home's sales price can by a fairly easy process. If you live in a subdivision comprised of homes with similar or identical floor plans, built in the same time period, then all you have to do is look at recent sales in the neighborhood to give you a good ballpark figure.
But many people live in older neighborhoods that have changed quite a bit over the years. Every home in your neighborhood may be different in minor or substantial ways-the house next door may have added another bedroom, for example, or the one across the street might have been built recently to fill a vacant lot. As a neighborhood evolves over the years, you may find that there aren't homes that are truly comparable to your own.
If you decide to sell your home on your own the most common way to set a value is to look at homes that have sold in your neighborhood within the past six to 12 months, as well as those now on the market. That's certainly how prospective buyers will assess the worth of your home.
You can usually learn what homes have sold for in your neighborhood by making a quick trip to City Hall; home sale information is in the public records in most communities (but not all).
If this sounds like a lot of work, you may decide to hire a RealtorŪ. Your RealtorŪ will do all the market research and provide you with comps showing where your home should be priced to best meet your goals-a fast sell, maximum profit, etc.
Tip #4 - Go home shopping yourself.
The best way to get to know your competition, identify features that are popular and learn what turns buyers off is to check out other open houses. Plan on spending a few weekends touring other homes on the market to learn what other sellers are asking. Be sure to make note of the floor plan, condition, appearance, size of lot, location and other features.
If you visit enough homes and pay close attention to the details (and what "buyers" are saying), you'll develop a good understanding of how different features affect pricing. And then you can apply what you've learned to the task of setting your price. But don't forget to include in the equation what homes are actually selling for, not just simply what people are asking. And remember, if you're serious about getting your home sold quickly, don't be more expensive than your neighbor.
Tip #5 - Know when to get an appraisal.
Sometimes you can use a good appraisal to your benefit in marketing your home. And if you get a VA or FHA appraisal, you can use it to let prospective buyers know that your home can be financed. However, an appraisal costs money. It also has a limited life. And you may not like the figure.
Tip #6 - Your tax assessment ratio means almost nothing.
Some people look to tax assessment to assign a value. The problem here is that assessments are based on a number of criteria unrelated to property values, so they often don't necessarily reflect the true value of your home. Have you heard of two identical homes in the same neighborhood with dramatically different assessed values because one was purchased more recently that the other? Well, it happens quite often.
Tip #7 - Find a good RealtorŪ.
Nearly two-thirds of the people who sell their own home ay they wouldn't do it themselves again, according to research by the National Association of RealtorsŪ. Sellers surveyed point to difficulties in setting a price, marketing handicaps and liability concerns among the primary reasons they would turn to a RealtorŪ next time. And selling a home yourself usually eats up more time and effort than you might initially expect.
Once you understand how much work it will be to sell it yourself, talk to a RealtorŪ you trust even if you decide to strike out on your own. Many top professionals are more than willing to help do-it-yourself sellers with the paperwork, contracts, etc. Plus you'll have a relationship with an agent if problems do arise that require professional help.
If you decide to work with a RealtorŪ, contact four or five-you probably me a few that you lied during your open house tour. Explain to each that you're thinking about putting your house on the market and you'd like to meet to talk about pricing and marketing. By having this group "evaluation" done, you should end up with a fairly tight price range to help guide your decision. Any RealtorŪ who is substantially higher or lower than the group should be able to justify their estimate. Just as you should be concerned with too low of a price, beware of an agent who gives you the highest price-they may be trying to buy your listing.
A good RealtorŪ knows the market and your neighborhood in particular. They will supply you with information on past sales, current listings, a marketing plan, something on their own background, and references from past clients. Take the time to carefully evaluate candidates on the basis of their experience, qualifications, enthusiasm, and personality. Most importantly, make sure you choose someone who is going to put in a lot of hard work on your behalf.
Tip #8 - Give yourself room to negotiate.
Make sure you leave yourself enough room in which to bargain. If what you ask for is unacceptable to the buyer, and their first offer is unacceptable to you, then you better make sure you have someplace to go that is acceptable to you.
Start with the absolute minimum price you would accept, then pick the price you'd get if the world was perfect. This gives you your range to keep in mind when working with your RealtorŪ to negotiate the sale.
In setting your asking price, review your priorities. Do you want to maximize your profit or sell quickly? You'll price high for the former and closer to market value if the latter is the case.
Tip #9 - Maximize your home's sales potential.
Each year, corporate North America spends billions of dollars on product and packaging design. The lesson here is that appearance is critical-and it would be foolish to ignore this when selling your home.
You may not be able to change your home's location or its floor plan, but you can do a lot to improve its appearance. And you should. The look and "feel" of your home generates a greater emotional response than any other factor. You may price your home to sell, but a prospective buyer reacts to what they see, hear, feel and smell.
Tip #10 - Rely on other people's judgment as well as your own.
The key to effective marketing is knowing your product's good and bad points. In the case of your home, accentuating the good can mean a faster sale for more money; failing to deal with the bad can mean months on the market and a lower-than-desired sales price.
The biggest mistake you can make at this point is to rely solely on your own judgment. Remember this is your home, a place of fond memories. There are bound to be emotional issues that can impair your ability to make an honest assessment of your home's strengths and weaknesses.
In evaluating what improvements you can make, don't be shy about asking others for their opinions. But make sure you're getting an honest answer; some may try to spare your feelings, just what you don't need. Fortunately, your RealtorŪ won't be shy in discussing what should be done to make a home more marketable.
Tip #11 - Clean like you've never cleaned before.
Pick up, straighten, unclutter, scrub, scour, dust . well you get the idea. If your living room feels crowded, take out a piece of furniture you can get away with. If your home still isn't ready to appear in House Beautiful, then clean some more. Remember, you're not just competing with other people's homes-you're going up against brand-new homes as well.
Tip #12 - Remove all traces of you from your home.
When you toured other people's homes, you may have felt some discomfort. This probably occurred because you saw, heard or otherwise sensed something that made you feel as if you were intruding into someone's life.
The last thing you want others to feel in visiting your home is that same sense of discomfort. Avoid this by making your home as neutral as possible. Anything that interferes with a prospective buyers' ability to see themselves living in your home must be eliminated. A few carefully chosen knickknacks and family portraits may add warmth and character to the home, too many are a distraction. Avoid unique or trendy color schemes-paint and carpet in neutral shades of white or beige.
Tip #13 - The little touches can make a difference.
While personal items can detract, other small touches can help make your house a home to buyers. A well-placed case of flowers, accent pieces of sculpture, potpourri in the bathroom-all can enhance the attractiveness of your home in a subtle, soft-spoke way. Try perusing any of the home magazines for tips.
Tip #14 - Don't let a smell be your downfall.
Odd smells kill deals quickly. All traces of food, pet and smoking odors must be eliminated. Even when you're sure they're gone; don't encourage prospective buyers to imagine things. If they know that you're a smoker or that you have a dog, they'll start smelling odors and seeing stains that may not even exist. Be safe-don't leave any clues.
Tip #15 - Disclose everything.
Smart sellers proactively go above and beyond the laws to disclose all known defects to their buyers-in writing. If the buyer knows about a problem, he can't come back with a lawsuit later on.
Tip #16 - The more prospects, the better.
By maximizing your home's marketability, you'll increase your chances of attracting more than one prospective buyer. Why is this better? Because several buyers compete with each other; a single buyer ends up competing with you.
Tip #17 - Don't get emotional during negotiations.
The extent of most people's experience in the art of negotiation begins and ends are their local auto dealership. And few of us have pleasant memories of haggling with car salesmen. But if you can just let go of the emotion you've invested in your home and approach negotiations in a detached, businesslike manner, you'll find the process to be a lot less painful. In fact, you might even enjoy it-and you'll definitely have an advantage over prospective buyers who get caught up in the emotion of the situation.
Tip #18 - Know your buyer.
In the negotiation process, your objective is to control the pace and set the duration. And the better you know your buyer, the more easily you can maintain control.
As a rule, buyers want the best property they can afford for the least amount of money. But knowing specifically what motives your buyer enables you to negotiate more effectively. Maybe your buyer needs to move quickly. Or the maximum amount he can spend is just a little below your asking price. Knowing this information puts you in a better bargaining position.
Tip #19 - Find out what the buyer can pay.
As soon as possible, try to find out the mortgage amount the buyer is qualified to carry and size of his down payment. If he makes a low offer, question his RealtorŪ about his client's ability to really pay what your home is worth.
Tip #20 - Find out when the buyer would like to close.
When a buyer would "like" to close is often when they need to close. Knowing this gives you his deadline for completing negotiations-again, an advantage in negotiations.
Tip #21 - Don't sign a deal on your next home until you close the deal on this one.
If circumstances conspire to force you into closing on your new home while you're sill making mortgage payments on the old one, you might end up turning yourself into a seller who is eager (or desperate) for the first deal that comes along.
Tip #22 - Don't move out before you sell.
Studies have shown that it is more difficult to sell a home that is vacant-it looks forlorn, forgotten, simply not appealing. It could cost you thousands. If you move, you're also telling buyers that you have a new home and are probably motivated to sell.
Tip #23 - Don't give yourself a deadline.
Forcing yourself to sell by a certain date adds unnecessary pressure and puts you at a serious disadvantage in negotiations.
Tip #24 - Don't take a low offer personally.
The first offer is invariably well below what you both know the buyer will end up paying for your property. Don't get angry or feel insulted; evaluate the offer objectively. Make sure it spells out the offering price, adequate earnest money, amount of down payment, mortgage amount, a closing date and any special requests. Now you have a point from which you can negotiate.
Tip #25 - A really low offer may mean the buyer's not qualified.
If you feel an offer is inadequate, now would be a good time to make sure the buyer has been qualified to carry a mortgage of the size this deal would require (if you haven't learned this already). Ask how they arrived at their figure, and then suggest their agent use comparable to establish what homes are going for in your neighborhood.
Tip #26 - Don't take a lowball offer seriously.
An unacceptable low offer should not be taken personally or seriously. Rather, it should be countered, even with the slightest reduction in your asking price. This lets a buyer know that their first offer isn't seen as a very serious one.
Tip #27 - Make sure the contract is complete.
The best way to avoid problems is to make sure that all terms, costs and responsibilities are spelled out in the contract of sale. A contract should include the date it was made, the names of the parties involved in the transaction, the address of the property being sold, the purchase price, where deposit monies will be held, the date for loan approval, thte date and place of closing, type of deed, any contingencies that remain to be settled, and whether there's any personal property included (or not) in the sale, among other things.
Tip #28 - Don't deviate from the contract.
Resist the temptation to diverge from the contract. For example, if the buyer requests a move-in prior to closing, just say no. Now is not the time to take any chances of the deal falling through.
If this all sounds like a lot of work, it is. But it's to be expected when you're selling anything of such great value. And you'll thank yourself for all the expense and hard work when the outcome works to your satisfaction.
Unless your home is in mint condition or you're selling it as a "fixer-upper," there's probably a long list of repair or remodeling projects to consider. These can range from relatively simple jobs, such as painting a bathroom, to more complex room-addition or remodeling projects.
In considering any home improvement project, you need to ask yourself a couple of questions: why are you doing it? Is it work that really needs to de done-a paint job or replacing a leaky roof? Or is it an amenity you'd like that you think might appeal to a potential buyer-a hot tub or home office addition, for example. Will it add value to your home, or have no impact at all? Or will it make your home more difficult to sell?
Some investments-like painting and yard work-involve relatively little cash outlay and yet return many times your cost. Other improvements that you think add value have no significant impact. Adding a swimming pool is a good example. Besides the hassles of maintenance, a pool can reduce your home's appeal among families with small children because of the safety concerns.
Plan first, then do. Careful planning on your part is a prerequisite to undertaking any home improvement project, major or minor. In fact, the quickest way a "minor" project balloons into a major one is when you haven't thought things through in advance. I've seen some people get in over their heads because they didn't think things through before starting work.
Whether you hire someone or do the work yourself, expect to spend more time and money than you initially anticipate. But by choosing well, you can ensure that the work you do adds the greatest value at the lowest cost.
Be methodical. Try breaking your list into "exterior" and "interior" projects, then break it down further by room or outside area. Decide which projects you're going to take on yourself and which will require outside help, and then do a rough cost estimate for each job.
One rule of thumb to keep in mind is that if you do the work yourself, you'll probably recoup more than what you pay out for some improvements. You can probably save anywhere from 10 to 30 percent by removing hired labor from the equation, On the other hand, you might pay more for work done by professionals, but the improvements can speed up the sale of your property.
Whether you should tackle the work yourself or hire professionals depends on several things. Do you have the time? Can your friends or relatives help you, or are you going to do it all yourself? How skilled are you and your helpers in the task at hand?
You may decide to split the job-the contractor does the major work and you do the finishing. Doing at least some of the work yourself can still save you money. Whatever you do, the key lies in doing it well. If that means hiring a professional, do it. A poorly done job can do you more harm than good.
Now let's take a look at some projects you might consider, beginning with some simple steps that can reap huge dividends.
&LDQUO;Curb appeal&RDQUO; isn't just catchy real estate jargon. It recognizes the fact that many buyers form their first, and often strongest, opinions before they step out of the car. Remember, buying a home is first and foremost an emotional commitment, especially for first-time home buyers. You may have a long list of logical reasons your home is a good catch, but a buyer is reacting emotionally to what he or she is seeing.
Knowing this, you can use a buyer's emotions to your advantage. First, take a good, hard look at the first impression your property makes. What do people see? If it's flaking paint and an unkempt yard, they may be seeing a home that needs a lot of work.
It should come as no surprise that surveys show that painting the exterior of your home results in the greatest return on time and money invested when compared to other improvements done for selling purposes. An investment of $1,000-$2,000 can mean adding $3,000-$4,000 to your asking price. And if you do a good job yourself, your profit is even greater.
Even if your home doesn't need the full treatment, check the trim around windows and doorways for cracking or peeling, and do any necessary touch-up work.
Another key first impression is made by the grounds of your home. If you can improve the attractiveness of your landscape without spending a lot of money, you can add a good 5 to 10 percent in the value of your home.
Minimally, you should prune existing trees, shrubs and bushes, clean out dead plants and weeds from flower beds and replace them with colorful flowering plants. Because landscaping can become a high-maintenance headache it not done carefully, choose hardy perennials that require minimal care.
If you have a damaged lawn, you may need to take additional steps. The easiest step is to repair damaged sections with new sod. While seeding is cheaper, it's won't produce grass overnight. A good patch job can make for a great quick fix.
Other lawn problems-dead areas due to lack of sunlight or a tree's root system-can be solved by planting ground cover or creating additional flower beds.
Like a new paint job, a relatively inexpensive upgrade of existing landscaping can bring far greater returns than what you spend. But don't do anything that would be deemed excessive by neighborhood standards. The idea is to make your home more attractive, not stand out as an oddity.
Because it's a big, dark, and usually takes up a significant portion of the property in front of your home, a driveway can affect a buyer's first impressions. If yours is in good condition, make sure you keep it swept and neatly edged where it meets the lawn. If yours is cracked, buckled or oil-stained, fix it. Patching concrete can be a problem because matching color is difficult; tar and asphalt are relatively easy to match. Whatever you do, be careful you don't create a bigger problem through quick-fix solutions-use high-quality patching materials and sealers.
These can be popular additions that add value, especially with smaller homes, because they add living space. But make sure that whatever you do is consistent with your home's architectural style and integrates will with your outdoor areas.
If your garage has that rough, unfinished look, consider drywall and matching switch and outlet plates. At a minimum, make sure all switches and outlets work. And give everything a good cleaning.
It's often the little things that really stand out. If your mailbox is in poor shape, replace it. Varnish or repaint your door if it need it. A door knocker and brass kick plate can also be a nice addition. Spruce up the entryway with new light fixtures, potted plants and other decorative touches.
With the exception of adding a deck or patio, most of the steps touched on here can be accomplished in relatively little time and without a lot of money. But the difference in the impression your home makes on prospective buyers will be dramatic.
Ironically, some of the big-budget items you might consider spending your money on will do little to enhance the marketability of your home. Aluminum siding, for example, is prized by some and loathed by others. Hot tubs may of may not appeal to potential buyers. Watch out for changes that you may find appealing but end up limiting your home's appeal to others.
Besides swimming pools, other investments you probably won't see a return on are tennis courts and automatic sprinkler systems. Unless they're for your own enjoyment, don't waste your money.
One major expense you may have to consider is a new roof. But if you think you can pass the cost along to a buyer, forget it. Everyone expects a good roof, and they're not going to pay extra for it. And a rook in poor condition can kill a deal quickly.
As with the exterior, there are plenty of interior tricks to punch the right emotional buttons in prospective buyers.
In all rooms, certain minimum standards should be met:
As is the case outside, a coat of paint can literally make the difference between a sale and no sale. Be sure to stick to neutral colors-white or off-white. It tends to make everything look new, clean and bright.
Be sure to paint everything: inside closets, cabinets, pantries, etc. If a prospective buyer opens a door and sees dirty walls or shelves, you've just wasted the advantage you had gained by painting in the first place.
Like paint, new carpeting should also be in a neutral shade. This helps buyers visualize their own furniture in your home.
Wallpaper, like wall colors, makes a personal statement about the owner's taste. Remove it. Buyers want to visualize what they would do with your home, and wallpaper gets in the way of their dreaming.
Many buyers value good wood floors, so sand and refinish yours if they can be restored. Otherwise, you might consider new flooring. If your home is short on storage space, consider how you can add shelving, cabinets or other storage systems to remedy this deficiency. You may also consider replacing windows and doors with more energy-efficient models.
Taken individually, each of the above improvements may not seem like much. But you'll find that the cumulative effect of fixing even relatively minor problems will be dramatic. A crack in the wall, a carpet stain or a light switch that doesn't work can send a negative signal that results in the loss of a buyer.
Kitchens and bathrooms have long been the top two remodeling projects, and you can expect them to remain so for years to come. They are the rooms that most consistently make or break a sale. A new or updated kitchen, a sparkling bathroom.these are features that help to sell a home.
If you can get away with a remodel rather than a new kitchen, do it. Because the kitchen is so important, sellers sometimes over-improve them to the point where there is no chance of recouping their investment when they move. Don't fall into this trap.
Add a new coat of paint, refinish the cabinets and counters, change drawer pulls and handles, install new appliances, put down a new floor-but don't gut and start over if it isn't necessary. When adding new appliances, be aware that many buyers consider brand name to be an important factor.
If you don't paint everything, at least repaint the ceiling bright white. You'd be surprised how much it can lighten up the room. Another great way to brighten a kitchen is to add a skylight.
If you choose to put in a new kitchen keep in mind what sells. Buyers are looking for lots of cabinets and counter space, new appliances, and an easy flow between the sink, food prep areas, stove and refrigerator. Think sunny, spacious and clean.
New fixtures, wall tile and flooring can make a big difference. If the bathtub is in poor shape, you can replace it, but a less expensive option may be to re-enamel it. If you keep the old tub, at least regrout and recaulk it. A good bathroom remodel or expansion can easily return more than 100 percent of its cost when you sell.
If you're feeling ambitious, adding a half-bath or second bath to a one-bathroom house is another option to consider, space allowing. Whatever the family size, one bathroom never seems adequate to most people.
For most people, the master bedroom is the third most important room in the house. If you have a large hoe with four or five small bedrooms and the floor plan allows for it, you might consider combining two rooms into a master bedroom. If you have a two- or three-bedroom home and a decent-sized lot, you might consider adding another bedroom.
A more recent remodeling trend is the "great room"-combining the kitchen, dining and family room into one larger living area. While lagging behind kitchen and bath remodels, it is definitely a trend on the rise. Living rooms, family rooms and formal dining rooms, on the other hand, are diminishing in popularity.
Another relatively new wrinkle is the home office. With more home based businesses and more companies allowing employees to telecommute, more people are looking for office-ready space in their homes. A recent survey conducted by Builder magazine found that nearly a third of buyers in their 20s, 30s and 40s plan to use a room as a home office. Other rooms that are showing up on more buyers' wish lists are exercise and media rooms.
Questionable projects include fireplace additions and installation of elaborate security systems. You can find professional who will argue for and against both of these projects. But with concerns about home safety on the rise, security systems appear to be moving into the "desirable" column.
Many of these projects are relatively inexpensive and will easily pay for themselves. With some projects, you may not recoup your investment, but you will have removed impediments to a sale. If you don't take care of things like leaky plumbing, drafty windows or outdated light fixtures, you're giving a buyer ammunition to use against you during negotiations.