Selling your home 

Essential Home Selling Preparations

The home selling process there are some important steps that most home sellers should take before listing a house with an agent or selling it for sale by owner. Every bit of prep work you do helps you get the most return from your investment.

1. Get Pre-Approved for a Home Loan

Sellers have been known to have signed a contract to sell their house before they knew if they were qualified to buy another. Either their financial circumstances had changed since their last purchase, and they could no longer qualify for a loan, or they weren't able to sell at a price that allowed them to buy the type of replacement house they wanted. They ended up renting or buying something that was far from their ideal home.

Before you decide to sell the house, get pre-approved by a lender you trust and research the housing market in the area where you wish to live so that you have a good idea how much it will take to buy a replacement. Start looking for two types of real estate: houses that seem to match the one you'd like to buy and houses that are similar to your current home.

2. Check Your Mortgage Payoff

Call your lender to check the payoff for your current home mortgage.

3. Determine How Much Your House Is Worth

Determine your home's fair market value. Estate agents will usually help you determine the value as a courtesy, but you might take it a step further.

4. Estimate Your Costs to Sell

  • Real estate commission if you use an agency to sell.
  • Advertising costs, signs, other fees if you plan to sell by owner.
  • Attorney, closing agent and other professional fees.
  • Excise tax for the sale.
  • Prorated costs for your share of annual expenses, such as property taxes, home owner association fees, and fuel tank rentals.
  • Any other fees typically paid by the seller in your area (surveys, inspections, etc.).

Estate agents deal with transactions every day and can give you a very close estimate of seller closing costs.

5. Estimate Costs to Buy a New Home

  • Calculate moving expenses, loan costs, down payment, home inspections, title work and title policy, paying for a new hazard insurance policy and all expenses related to buying a home. Your lender should give you a disclosure of estimated costs when you apply for loan pre-approval.

6. Calculate Your Estimated Proceeds

  1. Deduct your mortgage payoff from your home's fair market value.
  2. Deduct your costs to sell from the remainder to get an estimate of the proceeds you will be paid at closing.

Will your closing proceeds cover your costs to buy a new home? If not, do you have cash or other funding to make up the difference?

7. Make Necessary Repairs

Make all needed repairs unless you want the house to be regarded as a fixer-upper. I'm not referring to cosmetic updates, just items in need of repair. Anything that's obviously broken gives potential buyers a reason to offer you a lower price, especially if it's one of several repair hot spots that worry buyers the most.

8. Get the House Ready to Show

Most houses need at least a little spiffing up before they are shown to potential buyers. Great curb appeal, fresh paint indoors (and sometimes out), organized closets and cabinets, sparkling clean windows and appliances and a clutter-free look are essential if you want the house to appeal to buyers. Be sure to avoid the things buyers hate most about houses.

9. Get Psyched Up to Let People In

If you're listing with a estate agent, they could ask you to leave when the house is shown. Why? Because lurking sellers make buyers nervous, they don't feel comfortable inspecting the house when they feel they are intruding in your personal space.

Unless there's a valid reason for it, don't ask your agent to be present for all showings, because that requirement can be the kiss of death for showing activity. Other agents want privacy with their buyers and they don't usually have time to work around your agent's schedule.

Make the house accessible. That means it should aways be ready to show. Many agents won't bother showing a house that takes 24 hours to get into.

Getting Through the Home Inspection

Home Selling Advice

Nearly all home buyers hire a professional home inspector to take a close look at their new house before closing. You can speed things along by analyzing the condition of your home and making necessary repairs now, before the house is under contract. Whole-home inspections cover numerous systems within the house, but there are a handful of hot-spots that seem to worry buyers the most:

Mold & Mildew

Mildew stains and odors scare buyers, especially now that toxic black mold is such a hot topic, and chances are you won't even get an acceptable offer if mold and mildew are present. Even if the mold in your house is the normal variety kill it and fix the source of the problem.

Damp Basements and Crawlspaces

Mildew odors signal that a basement is too moist. Buyers and home inspectors will look closely at the walls and floors for patches of mildew and signs of dampness. The inspector might use a meter to determine how much moisture is present in these spaces, because moisture deteriorates building materials and attracts insects.

Cover exposed earth in basements and crawl spaces with plastic to help keep moisture levels down. Most foundation "leaks" we see are a result of poor drainage that funnels water towards the foundation.

  • Make sure gutters are clean so that rainwater flows toward downspouts instead of spilling over gutter sides along the foundation.
  • Point drainage downspouts away from the house.
  • Check water flow through buried drainage lines by flooding them with water from a hose. If water comes back towards you the line is plugged and should be cleared.

If foundation problems do exist, and you cannot make repairs, you might need to lower the price of the house upfront, with the understanding that the price reflects the problem. Another option is to give the buyers an allowance to make repairs after closing.

Roofs and Chimneys

Deteriorated shingles or other roof coverings are one of the first things home buyers and home inspectors notice. If the elements underneath the shingles are moist or rotted, you can bet repairs will be requested.

Make sure flashing around the base of the chimney is watertight, and that mortar and bricks are in good condition. Inspect the fireplace to make sure it is functioning properly.

Plumbing Problems

Fix leaks long before the home inspection takes place. The inspector will check water pressure by turning on multiple faucets and flushing toilets at the same time. The inspector will also run the dishwasher.

The home inspector might check the septic system. One method uses dyes that are flushed down a stool. The inspector waits to see if the dye surfaces on top of the septic drainfield, which would indicate a drainage problem.

Inadequate or Inferior Electrical Systems

The electrical panel and circuit breaker configuration should be adequate for the needs of the house. The inspector will look for receptacles with ground fault circuit interrupters (GFI) in bathrooms and kitchens. These receptacles contain mini circuit breakers that click off during a short circuit or overload.

The home inspector will likely make sure the receptacles are what they appear to be, and not "dummies" that aren't wired correctly. The inspector will test a portion of the remaining receptacles in the house.

Other Important Home Inspection Checks

  • The home inspector will check the heating and cooling systems, making sure they work and commenting about their efficiency.
  • The home inspector will take a close look at the structure and foundation.
  • The home inspector will check appliances that remain with the house, including smoke detectors.

Before the Home Inspection

Do everything you can to get the house in good condition before you attempt to sell it, but don't be discouraged if the inspection report contains a few negative statements. Home inspectors make note of everything they see.

Remember that the home inspection report is not a wish-list for buyers. Read your contract carefully, it dictates which systems should be in good working order at closing. If the roof is older, but doesn't leak, it's in good working condition. The same is true for older appliances.

Your contract may also state that you are under no obligation to make any repairs at all, although the buyers can then likely withdraw from the contract. Don't feel you must comply with unreasonable demands for repairs.