10 Steps Before You Sell
Introduction
The home selling process differs from state to state, but there are some important steps that you should take before you put your house on the market. All steps that protect your interests and help you get the most return from your investment.
Sellers will sign contracts to sell their house before they knew if they were qualified to buy another. Sometimes 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 ideal. Before you decide to sell the house, get pre-qualified 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.
How To Start Researching
- Start looking for houses that seem to match the one you'd like to buy and houses that are similar to your current home. How do the two categories compare in price? Can you handle the difference if you're planning a step up?
- Find homes in free For Sale publications, often available outside grocery and convenience stores.
- Search the Internet for homes for sale in your area and read Realtor">real estate ads in your local newspapers. You won't find house locations without making phone calls, but browsing the general market will get you off to a good start.
2. Check Your Mortgage Payoff
Call your lender to check the payoff for your current home mortgage.
3. Determine How Much the House Is Worth
Determine your home's
fair Market Value. Real estate agents will usually help you determine value as a courtesy, but you might take it a step further and order an
Appraisal>appraisal.
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">closing agent and other professional fees.
- Excise Tax for the sale.
- Pro-rated 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.).
- Real estate agents deal with transactions every day and can give you a very close estimate of seller Closing Costs.
5. Determine Your Costs to Acquire a New Home
Total your costs to acquire a new home: moving expenses, loan costs,
Down Payment,
home inspections,
Title work and policy, paying for a new
Hazard Insurance policy--all expenses related to buying a home. Your lender should give you a disclosure of estimated costs when you apply for pre-approval.
6. Calculate Your Estimated Proceeds
- Deduct your mortgage payoff from your home's fair market value.
- 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 acquire a Finding a Realtor.
