Expect Unexpected Costs, Chores When Selling Your Home To Move Up
Selling a home can come with unexpected chores and costs but taking some key steps can help keep you under budget on costs and on target for the best return on your investment.
1. First, get pre-approved for a home loan.
Sign a contract to sell your old home before you know if you are qualified to buy another and you could get stuck.
If your financial circumstances changed since your last home purchase you might no longer qualify for a loan or could become unable to sell at a price that allows you to buy your replacement home.
Along with getting pre-approved, research your next home’s housing market to determine how much you’ll need to buy the replacement home.
2. Determine how much the house you want to sell is really worth.
A real estate agent can help you determine your home’s fair market value, but consider taking the agent’s finding further and order an appraisal.
3. Estimate what it will cost to sell your home.
Your real estate agent can also help here, but be sure to include:
The real estate commission, if you use an agency to sell.
Advertising and staging costs, signs, other fees if you plan to sell it yourself.
Contractor (or repair costs) fees, legal fees, closing/escrow agent costs and other professional fees.
Excise or transfer taxes.
Prorated costs for your share of annual expenses, such as property taxes, homeowner association fees, homeowners insurance, fuel tank rentals, etc.
Other fees typically paid by the seller in your area including surveys and inspections.
4. Determine what it will cost to acquire a new home.
Costs for a new home can include moving expenses, loan costs, down payment money, home inspections, title work, homeowners insurance – any expense related to buying a home. Your lender should give you a disclosure of estimated costs when you apply for pre-approval.
Deduct your mortgage payoff from your home’s fair market value. Your lender can give you the pay off figure.
From what’s left, deduct your costs to sell and you’ll have an estimate of the proceeds you will be paid at closing.
Determine if your closing proceeds will cover your costs to acquire a new home. If not, you’ll have to come up with cash or other funding to make up any difference.
6. Complete repairs on your existing home.
Unless you are selling your home as-is as a fixer-upper, make the necessary repairs to bring your home’s condition up to a ready-to-go level. These are cosmetic repairs or staging steps, but items in need of real repair.
Leave something inoperable and you risk buyers submitting offers that are lower than you’d like.
7. Get the house ready to show to prospective buyers.
Most homes need at least a little spiffing up before they go on the market. Curb appeal, fresh paint indoors (and sometimes out), organized closets and cabinets, sparkling clean windows and appliances, and a clutter-free atmosphere are all essential for home to appeal to the greatest number of potential buyers.
8. Get psyched up to let potential buyers in, and then leave.
If you’re listing with a real estate agent, he or she will likely ask you to leave during open house events and individual tours. Lurking sellers make buyers feel like they are intruding and you could get a little protective of your first dream home.
Unless there’s a very good reason, don’t ask your agent to be present during showings. It’s the kiss of death for showing activity.
Buyers’ agents also want privacy with their clients and they don’t have time to work around your agent’s schedule.