WHY YOU SHOULD GET AN INSPECTION BEFORE SELLING YOUR HOME
A home inspector’s green light could give you the edge in a competitive market. According to the U.S. General Accounting Office, more than 85 percent of homebuyers who applied for a mortgage also requested an inspection — not too surprising, since home inspections can reveal hidden flaws and potentially pricey repairs. But even though an inspection can make or break the deal, most sellers wait for the buyer to take the initiative (and chew their nails while awaiting the results). Here are a few reasons why you might benefit from getting your home inspected before you put it on the market.
Reason #1: Reassure prospective buyers.
Even after a walk-through or two, buyers rarely know exactly what to expect from a home inspection — there’s always the possibility of termites gnawing on that rustic log cabin or faulty wiring lurking behind those faux-finished walls. Providing a pre-inspection assures the buyer that no major surprises are in store; while they might not waive their own follow-up inspection, they’ll at least feel more comfortable about placing a bid.
Reason #2: Buy time and save dough.
Even in a relatively new or completely renovated home, chances are a home inspector can find a red flag or two. After all, that’s their job. When a fault is found during a typical home inspection, you may only have a few days to decide whether to make the repair or adjust the sale price appropriately — and you’ll need to find a solution that satisfies you and the buyer. A pre-inspection gives you more time to compare prices and treatment options from a variety of contractors. You may also avoid conceding a huge chunk of change for unpredictable repair costs like mold remediation or structural work.
Reason #3: Know where you stand.
Generally, your final selling price is determined long before the inspector ever sets foot inside your door. That leaves a huge question mark lingering over your negotiations — are you going to be forced to drop your final figure again if a major problem is uncovered? By getting an inspection early, you’ll know what concessions a buyer might request. That allows you to set your asking price accordingly and find out whether or not you’re in a position to play hardball.
Reason #4: Prevent repeat repairs.
No matter how handy you are, there’s always a risk of misdiagnosing a problem. But getting your home pre-inspected could help you avoid wasting money on unnecessary repairs. Say your toilet hasn’t been flushing quite right, so you pay a plumber to replace it — only to learn upon inspection that the problem was in your septic system. A pre-inspection helps you avoid doing double-duty, since the inspector can pinpoint the problem and recommend the right repair.
While the average home inspection costs a few hundred dollars, it can save time and money in the long run. To find a home inspector in your area, visit the American Society of Home Inspectors at www.ashi.org.
WHAT EXPENSES SHOULD YOU EXPECT WHEN SELLING YOUR HOME
Talk to anyone who’s just sold a home, and you’ll probably see some eye-rolling as they recount how the supposed profits were undercut by one expense after another. But the results won’t seem quite so shocking if you know what to expect. In fact, if you start planning ahead of time, you may find ways to reduce some of the costs, perhaps by handling some tasks yourself or getting lots of competing bids for work.
Before the Sale: Expenses to Expect
Here are the typical upfront expenses. Some are a matter of choice, yet may be important investments in making sure your house sells for the highest amount possible — or sells at all.
Painting. A new paint job is one of most cost-effective ways of freshening your house up, inside and out. If you’ve recently painted, this is less important — though if your color choices were bold or unique, you might want to tone them down with some crowd-pleasing neutrals. Your stager, if you hire one (see below) can help advise on the best colors.
Window washing. When did you last wash them — especially on the outside panes of upper floors? Sparkling windows make a surprisingly large difference to buyer perceptions. Hiring someone will cost a few hundred dollars, depending on the size and height of your home.
Fixups. Which fixups are necessary (such as replacing cracked windows or stained carpeting) and which (such as major remodels) should be left for the buyer to handle is a separate discussion in itself. But there’s practically no house that couldn’t use some quick maintenance to make sure it looks well-cared for and leaves fewer items for a home inspector to comment on.
Staging. It’s de rigeur in some parts of the United States, and less known in others — but staging your home, or having a decorator help declutter, reorganize, and in some cases refurnish it after you’ve moved your stuff out, can help impress buyers in a big way. In fact, studies show that buyers pay more for staged homes. Expect to pay a professional stager a few thousand dollars for their services (a bit less if some of your own furniture is usable.)
Adding decorative or new items to your home (if you’re not hiring a stager). Even if you decide to save money by staging your own home, you’re almost guaranteed to have to buy things like a new doormat, new plush towels for the bathroom, flowers for the showings, and more, depending on what your house needs. Other likely possibilities include new couch cushions, area rugs, a nice table runner, and artwork to replace your wall of kids’ photos.
Landscaping. Buyers are increasingly interested in the state of your garden. If it’s already fully planted, you’ll want to hire someone (or put in some sweat equity) to get it raked, pruned, and otherwise tidied up. If the area hasn’t already been landscaped, plan to add some new greenery and flowering plants. (By the way, if you plant in containers, you can take the containers with you when you move — unless they’re so big or incorporated into the property as to be considered “fixtures.”) Many sellers simply put in new sod — but do the buyers a favor and don’t leave the plastic mesh backing on it, in case the buyers want to replace it with something more interesting and environmentally friendly.
Pre-inspection reports. Having a professional inspect your house for either termite/pest damage or other structural matters isn’t required , nor expected in most parts of the United States. Buyers expect to pay for their own inspectors, and in fact will probably want to hire ones they know and trust regardless of whether you’ve had the property inspected first. Yet there are situations where you might want to have the house inspected before letting buyers in — for example, if you’ve owned the property for many years and wonder whether any problems have arisen “below the hood” that you’re oblivious to, and would perhaps prefer to fix before buyers have a chance to get upset about them. Inspections will run you upwards of $200.
Lights and heat while the house sits empty. If you’ll be moving out before putting your house on the market, expect to pay double utilities for a while. You’ll want to leave the lights and heat on in the house for sale, or program them to stay on during any hours that potential buyers and their agents may be stopping by the place. No one likes to enter a cold, dark house and fumble around for the light switches.
Extra homeowners’ insurance for the vacancy period. Check with your homeowners’ carrier. Your insurance may not apply when the home is “vacant,” which term will be defined in your policy. You can ask for a rider to cover any period of vacancy.
At Closing: More Expenses to Expect
The good news is, most of what you’ll be paying out at closing will come out of the sale proceeds. The bad news is, you’ll be saying goodbye to some big dollars.
Real estate agent commissions. You, as the seller, will likely be paying the entire 5% – 6% commission, to be split between the buyer’s agent and yours.
Other closing costs or credits to the buyer. You might have agreed — based on local tradition or buyer negotiation — to pay various of the standard costs associated with closing the deal, such as fees for the escrow company; the mortgage and home appraisal; recording and transfer of the property; homeowners’ and title insurance; and more. If your local real estate market is sluggish, buyers may also ask you to pay all or a hefty portion of the closing costs, which typically add up to 2% to 4% of the selling price.
Transfer tax. Your city or state may require you to pay transfer taxes, as a small percentage of the sale price.
Home warranty for the buyer. Whether because the buyer requests it or to make the buyer feel secure about the home purchase, many sellers buy a home warranty on the buyer’s behalf. This is a service contract that covers repairs to appliances and certain systems within the house for the first year of ownership. It will cost about $500.
Capital gains tax. If you earn less than $250,000 on your home sale (or $500,000 if you’re married and filing jointly), don’t worry — you won’t owe a thing in the way of capital gains taxes. But if you earn more than that, you’ll want to look further into the matter. Once you’ve subtracted things like the costs of preparing the property for sale from the supposed gains, you may not owe the tax.
Moving costs. Asking your friends with pickup trucks to help can save you some dough — but will take a lot more time. Sometimes it’s worth paying for the deluxe treatment, where the company packs your boxes for you, transports them to the new location, and unpacks at the other end.
HOW TO INCREASE THE VALUE OF YOUR HOME
The road to selling a home can be a long one. Learn to improve the value of your home based on your budget with these 30 tips.
Home Improvements: Under $100
Tip 1: Spend an Hour With a pro
Invite a realtor or interior designer over to check out your home. Many realtors will do this as a courtesy, but you will probably have to pay a consultation fee to a designer. Check with several designers in your area; a standard hourly fee is normally less than $100, and in an hour they can give you lots of ideas for needed improvements. Even small suggested improvements, such as paint colors or furniture placement, can go a long way toward improving the look and feel of your home.
Tip 2: Inspect it
Not every home improvement is cosmetic. Deteriorating roofs, termite infestation or outdated electrical systems — you can’t fix it if you don’t know it’s broken. Hire an inspector to check out the areas of your home that you don’t normally see. They may discover hidden problems that could negatively impact your home’s value. Small problems (such as a hidden water leak) can become big, expensive problems quickly; the longer you put off repairs, the more expensive those repairs will be.
Tip 3: Paint, Paint, Paint
One of the simplest, most cost-effective improvements of all is paint! Freshly painted rooms look clean and updated — and that spells value. When selecting paint colors, keep in mind that neutrals appeal to the greatest number of people, therefore making your home more desirable. On average, a gallon of paint costs around $25, leaving you plenty of money to buy rollers, painter’s tape, drop cloths and brushes. So buy a few gallons and get busy!
Tip 4: Find Inspiration
An alternative to hiring a designer is to search for remodeling and decorating inspiration in design-oriented magazines, books, TV shows and websites. Simply tear out or print off the ideas you want to try and start your to-do list. Keep it simple — when remodeling on a tight budget, do-it-yourself projects are best.
Tip 5: Cut Energy Costs
The amount of money you spend each month on energy costs may seem like a fixed amount, but many local utility companies provide free energy audits of their customers’ homes. They can show you how to maximize the energy efficiency of your home. An energy-efficient home will save you money now, which can be applied to other updates, and is a more valuable and marketable asset in the long run.
Home Improvements: $100- $200
Tip 1: Plant a Tree
If you aren’t planning to sell your house today, plan for the future with a landscaping improvement that will mature over time. Plant shade trees — not only will mature trees make your home more desirable but a fully grown, properly placed tree can cut your cooling costs by as much as 40 percent. Mature landscaping is also good for the environment, providing a necessary habitat for wildlife while adding valuable curb appeal to your home.
Tip 2: Low-Maintenance Landscaping
No question that shrubs and colorful plants will add curb appeal to any home, but when shopping at your local garden center, make sure that you “think green.” Purchase plants that are native to your region or plants that are drought-tolerant; these require less water and maintenance, which means more savings to you and more green in your wallet.
Tip 3: Money-Saving Luxury
Speaking of water, here’s another way to tap into extra savings; install a water filtration system in your kitchen. Not only do these systems purify your water, they will also lower your grocery bills — no more bottled water. A water filtration system is an inexpensive addition, but it’s the sort of small luxury that homebuyers love.
Tip 4: Improve the air Quality Inside Your Home
Air quality isn’t just about the conditions outdoors. If you have older carpets in your home, they might be hiding contaminants and allergens. The first step to determine if these need replacing is to hire a professional company to test your indoor air quality. If the results prove that your carpets should be replaced, choose environmentally friendly natural products like tile or laminate floors. Hard-surface floors are much easier to keep clean, don’t hold odors, give your home an updated look and, in general, are more appealing to buyers.
Tip 5: Save the Popcorn for the Movies
Finally, what’s on your ceiling? Few structural elements date a house more than popcorn ceilings. So dedicate a weekend to ditching the dated look and adding dollar signs to the value of your home. NOTE: some older ceilings could contain asbestos so before undertaking this project, have yours tested by professionals.
Once you’re in the clear, this is a project you can tackle yourself. First, visit your local hardware store for a solution to soften the texture, then simply scrape the popcorn away. Removing a popcorn ceiling may not seem like a big change but one of the keys for adding value to your home is to repair, replace or remove anything that could turn buyers away.
Home Improvements: $200-$400
Tip 1: Clean up the Lawn
Overgrown or patchy lawns and outsized bushes will cause your home to stand out — in a bad way. The good news is that taming your jungle is an easy fix. For a few hundred dollars, hire a lawn service company to trim your lawn and shape your hedges. Your curb appeal will go from messy to maintained without blowing your budget.
Tip 2: Cleanliness counts
The old adage that you only get one shot at a first impression is true. So, make the interior of you home shine from the moment someone walks through the door. For less than $400, hire a cleaning service for a thorough top-to-bottom scrubbing. Even if you clean your home regularly, there are nooks and crannies that you may miss or overlook. Let a cleaning service do the dirty work to really make your home sparkle.
Tip 3: Visually Increase Your Home’s Square Footage
The size of your home dramatically affects the value, but square footage isn’t the only space that counts. Visual space or how large a home feels also counts. The key is to make each room in your house feel larger. Replace heavy closed draperies with vertical blinds or shutters to let light in — a sunny room feels larger and more open. Also, try adding a single large mirror to a room to visually double the space. Finally, clear the clutter. The more clutter, furniture and plain old stuff you have in a room, the more cramped it will feel. For less than $400, add an attractive shelving unit to an underused space and store your clutter out of sight.
Tip 4: Small Bathroom Updates Equal a big Return
Bathroom updates are always a smart move. Even if you can’t afford a full remodel, small changes such as replacing dated wallpaper with a faux or textured finish and replacing old lighting will update the room without denting your wallet.
Tip 5: Add new Energy-Efficient Fixtures
A functional, decorative ceiling fan is a beautiful thing. It provides necessary light and, in warm months, creates a soft breeze reducing the need for expensive air conditioning. But, an outdated, wobbly, loud or broken ceiling fan is a useless eyesore. Replace old fixtures with new ones to make your home more enjoyable for you now and to increase the bottom line should you decide to sell.
Home Improvements: $400-$750
Tip 1: Big Return on Bathroom Updates
A great room to update for less than $750 is the bathroom. The two rooms that benefit most from even small renovations are the kitchen and bathroom. One cost-effective change — like replacing an outdated vanity, old plumbing and lighting fixtures or adding a new tile floor — will guarantee a lot of bang for your buck and give your bath an updated, modern look.
Tip 2: Any Kitchen Update Equals Added Value
The same rule applies in the kitchen. You don’t have to start from scratch to create a winning recipe. For maximizing your home’s value, kitchen updates are key. Start by swapping out just one item, such as a stained sink or ancient microwave for shiny new stainless models. Even small kitchen updates will add big value to your home.
Tip 3: Replace Worn Carpets or rugs
Take a look at your home’s soft flooring. Are your carpets and area rugs stained or worn? Nothing turns buyers off more than the thought that they will immediately need to replace all of the flooring in a home. Ideally, you may want to replace them all, but if a limited budget puts a snag in that plan, start by replacing the carpet in the room that shows the most wear and tear and replace the others as your finances allow.
Tip 4: Keep up With Regular Maintenance and Repairs
Walk around your home and make a list of all the little things that are broken or in need of repair. Individually, small repairs might not seem important, but if every room has just one thing wrong, those small things will add up to create the impression that your home has been neglected. If you don’t feel comfortable tackling the repairs yourself, hire a handyman for a day and watch your “to do” list disappear. Staying on top of maintenance today eliminates problems down the road should you decide to sell.
Tip 5: Get Help with Getting Organized
Hire a professional organizer for a day. They will show you how to organize various rooms in your home and teach you tricks for keeping it organized. How does this increase your home’s value? Simple — a clutter-free home appears cleaner and larger, which is more attractive to homebuyers and therefore more valuable.
HOW TO SELL YOUR HOME FASTER
SHOW AND SELL.
It’s showtime! A house that shows well will sell faster and bring a better price. Here are some suggestions to help you make the most of it.
Home Buyers love the light. By day, let the sun shine in. By night, turn on all your lights – inside and out. Don’t forget the accent and picture lights.
Home buyers hate crowds. When your agent shows your home, send the kids to the neighbors and take a long walk.
SILENCE IS GOLDEN.
When your house is being shown, turn off the radio, television, stereo or any other noise-producing source. It will make your agent’s job easier.
LOSE THE PET.
Make your pets disappear when your home is being shown. Your prospect may have different tastes in animals than you.
STAY IN THE BACKGROUND.
Don’t try to engage your prospects in conversation. Let your Realtor do his or her job – and let your buyers inspect without interruption.
You never know when your agent may need to show your home on a moment’s notice. Make your beds and tidy up each morning, just in case.
NO APOLOGIES NECESSARY.
Nobody’s perfect. There’s no need to apologize for the appearance of your house. Let your agent field any negative comments.
SELL THE HOUSE. PERIOD.
Don’t try to sell your prospect old furniture, appliances, lava lamps or anything besides your house. Save it for after the sale.
LEAVE IT TO THE PROFESSIONALS.
Let your agent discuss selling price, terms, possession dates or other such details. They’ve been carefully trained and will negotiate on your behalf.
SHOW BY APPOINTMENT ONLY.
Your agent can schedule all showings – including those from other real estate offices. All you need to do is make sure your home is ready to show.
There’s more to selling a home than meets the eye. Your experienced real estate agent is carefully trained to help you sell your home for as much and as fast as possible. These recommendations are offered to assist you in avoiding the pitfalls many home sellers encounter.
WHAT ARE THE BEST-KEPT SECRETS FOR SELLING YOUR HOME
Tricks of the trade to help you get top dollar when selling your home.
Selling Secret #10: Pricing it right
Find out what your home is worth, then shave 15 to 20 percent off the price. You’ll be stampeded by buyers with multiple bids — even in the worst markets — and they’ll bid up the price over what it’s worth. It takes real courage and most sellers just don’t want to risk it, but it’s the single best strategy to sell a home in today’s market.
Selling Secret #9: Half-empty closets
Storage is something every buyer is looking for and can never have enough of. Take half the stuff out of your closets then neatly organize what’s left in there. Buyers will snoop, so be sure to keep all your closets and cabinets clean and tidy.
Selling Secret #8: Light it up
Maximize the light in your home. After location, good light is the one thing that every buyer cites that they want in a home. Take down the drapes, clean the windows, change the lampshades, increase the wattage of your light bulbs and cut the bushes outside to let in sunshine. Do what you have to do make your house bright and cheery – it will make it more sellable.
Selling Secret #7: Play the agent field
A secret sale killer is hiring the wrong broker. Make sure you have a broker who is totally informed. They must constantly monitor the multiple listing service (MLS), know what properties are going on the market and know the comps in your neighborhood. Find a broker who embraces technology – a tech-savvy one has many tools to get your house sold.
Selling Secret #6: Conceal the critters
You might think a cuddly dog would warm the hearts of potential buyers, but you’d be wrong. Not everybody is a dog- or cat-lover. Buyers don’t want to walk in your home and see a bowl full of dog food, smell the kitty litter box or have tufts of pet hair stuck to their clothes. It will give buyers the impression that your house is not clean. If you’re planning an open house, send the critters to a pet hotel for the day.
Selling Secret #5: Don’t over-upgrade
Quick fixes before selling always pay off. Mammoth makeovers, not so much. You probably won’t get your money back if you do a huge improvement project before you put your house on the market. Instead, do updates that will pay off and get you top dollar. Get a new fresh coat of paint on the walls. Clean the curtains or go buy some inexpensive new ones. Replace door handles, cabinet hardware, make sure closet doors are on track, fix leaky faucets and clean the grout.
Selling Secret #4: Take the home out of your house
One of the most important things to do when selling your house is to de-personalize it. The more personal stuff in your house, the less potential buyers can imagine themselves living there. Get rid of a third of your stuff – put it in storage. This includes family photos, memorabilia collections and personal keepsakes. Consider hiring a home stager to maximize the full potential of your home. Staging simply means arranging your furniture to best showcase the floor plan and maximize the use of space.
Selling Secret #3: The kitchen comes first
You’re not actually selling your house, you’re selling your kitchen – that’s how important it is. The benefits of remodeling your kitchen are endless, and the best part of it is that you’ll probably get 85% of your money back. It may be a few thousand dollars to replace countertops where a buyer may knock $10,000 off the asking price if your kitchen looks dated. The fastest, most inexpensive kitchen updates include painting and new cabinet hardware. Use a neutral-color paint so you can present buyers with a blank canvas where they can start envisioning their own style. If you have a little money to spend, buy one fancy stainless steel appliance. Why one? Because when people see one high-end appliance they think all the rest are expensive too and it updates the kitchen.
Selling Secret #2: Always be ready to show
Your house needs to be “show-ready” at all times – you never know when your buyer is going to walk through the door. You have to be available whenever they want to come see the place and it has to be in tip-top shape. Don’t leave dishes in the sink, keep the dishwasher cleaned out, the bathrooms sparkling and make sure there are no dust bunnies in the corners. It’s a little inconvenient, but it will get your house sold.
Selling Secret #1: The first impression is the only impression
No matter how good the interior of your home looks, buyers have already judged your home before they walk through the door. You never have a second chance to make a first impression. It’s important to make people feel warm, welcome and safe as they approach the house. Spruce up your home’s exterior with inexpensive shrubs and brightly colored flowers. You can typically get a 100-percent return on the money you put into your home’s curb appeal. Entryways are also important. You use it as a utility space for your coat and keys. But, when you’re selling, make it welcoming by putting in a small bench, a vase of fresh-cut flowers or even some cookies.
WHAT ARE COSTLY HOME SELLER MISTAKES
If you’ve lived happily in your home for years, it can be difficult to detach yourself from cherished memories and look at your house as a commodity you’re attempting to sell. But no matter how much you love your home, you’ll need to spruce it up before it hits the market. For a smooth transaction that garners the most possible profit from your sale, avoid these eight common, and costly, home seller mistakes.
1. Skipping a home inspection. Depending on the age of your home, scheduling a pre-listing home inspection could save you a lot of time and aggravation. You can address issues on your own time and budget before negotiating with a buyer to fix problems.
2. Skimping on your sales prep. While you may be tempted to “test the waters” and put your home on the market without painting it or making minor repairs, your home is likely to languish on the market and get a reputation for having a major problem. A thorough, professional-level cleaning should be your bare minimum seller prep. Your eventual sales price is likely to be lower if you don’t sell within the first few weeks after you list your home.
3. Choosing the wrong REALTOR®. Instead of picking a REALTOR® who’s a friend of a friend, a relative or perhaps someone who’s great at working with buyers, take time to pick a REALTOR® with an excellent reputation for listing homes. Your payoff will be much larger if you list your home with a REALTOR® with local market knowledge and sales expertise.
4. Neglecting to ramp up your curb appeal. If you polish and primp inside your home but neglect to pull weeds or paint your front door, you run the risk of potential buyers leaving without ever entering your home.
5. Withholding information from buyers. If you hope that the buyers or their inspector won’t find out about the leak under your bathroom sink or the fact that your basement gets flooded every winter, you run the risk of a nasty negotiating period—or worse, a lawsuit after the settlement.
6. Overpricing your home. If you’ve hired the right REALTOR®, someone who can give you a strong market analysis and help you determine a reasonable price for your home, then you can avoid overpricing your home. If you don’t listen to a REALTOR® and base your listing price on an inflated view of your home’s value, you’re likely to end up selling after multiple price drops for less than you would have if you priced it right the first time.
7. Being unprepared for your next step. Whether you should buy your next home or sell your current home first is only one part of the preparation you need to make to move. You need a back-up plan in case your transaction on either end takes longer or shorter than you think, and you need to understand your mortgage payoff and the closing costs you must pay.
8. Letting your pets and kids spoil a sale. Part of your emotional detachment from your home is recognizing that while you love Fluffy and your darling twins, buyers want to visualize themselves and their own family in your home. Bribe your kids if you have to, but make sure the house is neat and as neutral-looking and smelling as possible. Take the kids and your pets out (or lock up your pets) when prospective buyers are visiting: You never know if someone who is terrified of dogs or cats will be turned off from making an offer because of your adorable pet.
Selling a home can be challenging, but with the help of a reliable REALTOR®, you can avoid making mistakes and reap the rewards of your sale.
HOW TO SET THE STAGE FOR A SUCCESSFUL SALE
Selling your home is just like selling anything else. You need to highlight its strengths. Focus on its features. Bring out its best. Heres a list of places to start.
MAKE A LASTING FIRST IMPRESSION:
Curb appeal is vital. Make sure your lawn is neatly trimmed. Rake up any refuse or leaves. Sweep the walk. The front door should be clean and presentable. If the doorbell is not working, fix it.
DO NOT HESITATE TO DECORATE:
Faded walls and worn woodwork will not sell your home. A small investment in paint or wallpaper will.
LET THE SUN SHINE IN:
Open the drapes and curtains. Clean the windows. Home buyers are drawn to bright, cheery interiors.
CALL THE PLUMBER:
Dripping water suggests worn out plumbing. Clean those rust-stained sinks. And make sure the drains are running free and clear.
THE DEVIL’S IN THE DETAILS:
Loose doorknobs. Sticking drawers. Wobbly hinges. Stuck windows. They can all cost you a sale. Fix them, and they can make one.
Keep stairways and corridors clear and free of clutter. Cluttered areas are not only unattractive, they are dangerous as well.
SELL THE WHOLE HOUSE:
Let prospects see the big picture. Make sure your garage is neat and organized. Give your storage spaces a clean coat of paint.
BUYERS LOVE BIG CLOSETS:
And they look even bigger when they are clean and well organized. Get rid of the piles of clothes, old cartons, and other clutter.
BATHROOMS ARE BIG SELLERS:
Make bathrooms sparkle. Clean sinks and bowls. Recaulk where needed. Make sure towels and area rugs are freshly washed.
WAKE UP YOUR BEDROOMS:
Remove excess furniture. Use attractive and colorful bed linens and spreads. Open the drapes and let the light in. Remember, this is where your buyers spend 1/3 of their lives.
HOW STAGING A HOME HELPS IT TO SELL FASTER
If you are planning to put your house on the market this summer, it goes without saying that you are hoping to sell your home as quickly as possible and get your asking price. Set the stage for success with these 21 tips for styling and upgrading your home, and see results — fast.
1. Boost curb appeal. This is something you always hear, and with very good reason. Many people thinking of touring your home will do a quick drive-by first, often deciding on the spot if it is even worth a look inside. Make sure your home is ready to lure in onlookers with these tips:
Power wash siding and walkways
Hang easy-to-read house numbers
Plant blooming flowers and fresh greenery
Mow lawn, and reseed or add fresh sod as needed
Wash front windows
Repaint or stain the porch floor as needed
2. Welcome visitors with an inviting porch. Even if you have only a tiny stoop, make it say “welcome home” with a clean doormat, potted plants in bloom and — if you have room — one or two pieces of neat porch furniture. Keep your porch lights on in the evenings, in case potential buyers drive by. Illuminating the front walk with solar lights is a nice extra touch, especially if you will be showing the house during the evening.
3. Get your house sparkling clean. From shining floors and gleaming windows to clean counters and scrubbed grout, every surface should sparkle. This is the easiest (well, maybe not easiest, but certainly the cheapest) way to help your home put its best foot forward. You may want to hire pros to do some of the really tough stuff, especially if you have a large house. Don’t skimp — this step is key!
4. Clear away all clutter. If you are serious about staging your home, all clutter must go, end of story. It’s not easy, and it may even require utilizing offsite storage (or a nice relative’s garage) temporarily, but it is well worth the trouble. Clean and clear surfaces, floors, cupboards and closets equal more space in the eyes of potential buyers, so purge anything unnecessary or unsightly.
But it’s my style! Guess what? It may not be the style of those seeking to buy a house in your neighborhood. So even if you have an awesome vintage-chic look going on, rein it in for the sake of appealing to the most number of people. You can bring your personal style back into play in your new home.
5. Strike a balance between clean and lived-in. Yes, I know I just said to get rid of all your clutter (and you deserve a big pat on the back if you did it), but now it’s time to judiciously bring back a few elements that will really make your home appealing. Think vases of cut flowers, a basket of fresh farmer’s market produce on the kitchen counter or a bowl of lemons beside the sink.
6. Style your dining room table. The dining room is often a blind spot in decorating the home. Between dinners, a large dining table can look bare and uninviting, so styling it up with visitors in mind can increase the appeal. An oversize arrangement can look too stiff and formal, so try lining up a series of smaller vessels down the center of the table instead.
7. Take a good look at your floors. At the bare minimum, give all floors a thorough cleaning (and steam clean carpets), but consider having wood floors refinished if they are in poor shape. If you don’t want to invest in refinishing floors, the strategic placement of area rugs can go a long way.
8. Rearrange your furniture. In the living room, symmetrical arrangements usually work well. Pull your furniture off the walls and use pairs (of sofas, chairs, lamps) to create an inviting conversation area.
9. Choose sophisticated neutral colors. Now is not the time to experiment with that “fun”-looking lime green. But that doesn’t mean you need to go all white, either. Rich midtone neutrals like mocha and “greige” create a sophisticated backdrop that makes everything look more pulled together.
10. Create a gender-neutral master bedroom. Appeal to everyone with a clean, tailored master bedroom, free of personal items and clutter. You can’t go wrong with clean, crisp linens, tasteful artwork and a blanket folded at the foot of the bed.
11. Open those closets! Open-house visitors will peek inside your closets. Closet space can be a make-it-or-break-it selling point for buyers, so show yours off to their full advantage by giving excess stuff the heave-ho. Again, this is really important, so even if you need to store a few boxes elsewhere, it’s worth it. Aim to have 20 to 30 percent open space in each closet to give the impression of spaciousness.
12. Clean up toys. Of course there will be families with children looking at your home, but just because they have kids too doesn’t mean seeing toys strewn everywhere will sell them on the place. When people are house hunting, they are imagining a fresh start. Show them that in this house, it is possible to have a beautifully organized kids’ room, and they might be swayed.
13. Use “extra” rooms wisely. If you have been using a spare bedroom as a dumping ground for odd pieces of furniture and boxes of junk, it’s time to clean up your act. Each room should have a clearly defined purpose, so think about what potential buyers might like to see here. An office? A guest room? Another kids’ room? Whether you buy inexpensive furnishings, rent them, or borrow some from friends, making a real room out of a junk room will have a big payoff.
14. Try a pedestal sink to maximize space. If you have a small bathroom but a huge cabinet-style sink, consider swapping it out for a simple pedestal version. Your bathroom will appear instantly bigger.
15. Use only perfect personal accents. Especially in the bathroom, it is important that anything left out for visitors to see is pristine. If you have a gorgeous fluffy white bathrobe, hanging it on a decorative hook on the door can be an attractive accent — but if your robe is more of the nubby blue floral variety, you might want to hide it away. Look at every detail with a visitor’s eye — bars of soap should be fresh and clean, towels spotless, the garbage always emptied (you get the idea).
16. Entice people to explore the whole house. By placing something that draws the eye at the top of the stairs, in hallways or in corners, you can pique curiosity and keep potential buyers interested throughout a whole home tour. A piece of artwork, a painted accent wall, a window seat, a vase of flowers, a hanging light or even a small, colorful rug can all work to draw the eye.
17. Show how you can use awkward areas. If you have any room beneath the stairs, or a nook or alcove anywhere in your home, try to find a unique way to show it off. By setting up a small work station, a home command center with a bulletin board, or built-in shelving, your awkward spot becomes another selling point.
18. Beware pet odors. Really, this can be a big one! If you have pets, get all rugs steam cleaned and be extra vigilant about vacuuming and washing surfaces. Also be sure to keep any extra-loved pet toys and doggie bones hidden when tours are scheduled.
19. Create a lifestyle people are looking for. Generally speaking, you want to play up what your neighborhood or area is known for. Have a house in a quiet, grassy suburb? Hanging a hammock in your backyard and a bench swing on your porch could be the perfect touch.
20. Stage the outdoors too. Even if your condo has only a teensy postage stamp–size balcony, play it up with a cute cafe table and chairs, a cheerful tablecloth and even a little tray of dishes or a vase of flowers. When people look at this scene, they won’t be thinking “small,” they will be thinking, “What a charming spot to have breakfast!”
21. Think seasonally. Make sure your garden is in beautiful shape in the summer, and that any extra features you have, like a pool or a fire pit, are cleaned and ready to go. Take advantage of the cozy vibe of the season in autumn and winter, by building a fire in the fireplace and simmering hot apple cider on the stove.Fox News
WHAT ARE THE PROS AND CONS OF SELLER FINANCING
Cutting out the middleman typically represents progress. Can you imagine depending on a telephone operator to put your call through? (Come to think of it, going through an operator might save us from making those calls we really shouldn’t make.) But back to the point: Who wants to deal with a third party when you don’t have to? That’s part of the philosophy behind seller financing. There’s a certain appeal to cutting out banks and mortgage lenders and having the seller finance the transaction — but there are risks involved. That said, both sellers and buyers can benefit. “Where else can you receive a rate of return in the 4 to 7% range with almost no risk?” asks Jesse Gonzalez, president of North Bay Capital Inc. “Your investment is backed by a tangible asset.”
What exactly is seller financing?
The seller is also the lender in a seller-financed transaction. But the seller doesn’t just hand over money to the buyer in the form of a loan as banks and mortgage lenders do. In this scenario, the seller allows the buyer to make payments instead.
Sometimes, as was the case with Mary Pitman from Vero Beach, FL, you can first be a renter. “I had a proven track record of paying on time and taking care of the house,” says Pitman who successfully went from renter to owner through a seller-financing deal. Pitman, when pitching the idea, told her landlord that he would be collecting about the same amount of money but would no longer have the expenses of property tax, homeowners insurance, and maintenance, which falls to the buyer under seller-financing deals.
Typically, the buyer signs a promissory note to the seller. The promissory note lists the interest rate, the repayment schedule, and default consequences.
Seller-financing arrangements are usually short-term ones. (Most sellers don’t want the hassle of collecting payments for the next 30 years.) A typical deal might be for the loan to be amortized for 30 years with a balloon payment after five years. “Balloon payment” refers to the repayment of the outstanding principal sum, made at the end of a loan period.
Pros for buyers:
Seller financing lets people who might not be able to secure a mortgage buy a home. A seller might OK you even if a bank or other traditional lender turned you down.
The closing process is faster and cheaper.
The down payment can be whatever amount you and the seller agree upon.
Cons for buyers:
The interest you pay might be high.
Just because the seller is not a bank doesn’t mean he or she won’t run a credit check on you. You could be turned down if you’re a credit risk.
You need to ensure you can pay the balloon payment.
Pros for sellers:
If you’re having trouble selling, offering seller financing makes your home stand out, potentially getting it sold faster. Simply add the words “seller financing available” to the listing to let people know.
You may be able to sell the house “as is,” instead of making costly repairs that might be required by traditional lenders.
You could get a better interest rate than you could get from other investments.
If the buyer stops making payments, you get the house back and can keep the down payment — plus any money that was paid.
You can sell the promissory note (usually at a discounted amount) right away to an investor, if desired. That would give you a lump-sum payment.
Cons for sellers:
You typically need to own the home free and clear. If you still hold a mortgage, you must get approval from your lender before going forward with the deal.
The buyer could stop making payments at any time. “Most of the time, when buyers default on the loan, they feel bad and just walk away,” says real estate professional Barb Getty of Indianapolis. But if the buyer doesn’t leave, you need to go through the foreclosure process. “I had to do this once, and it took three months and $700 in fees,” she explains.
You might “incur repair costs, depending on how the buyer cared for the property,” if you need to take back the house, says Cindy Welu, a real estate professional from Minneapolis/St. Paul.
Taxes could be complicated.
Whether you’re a buyer or a seller, consider it mandatory to work with a real estate attorney (in addition to a real estate agent), who can write the sales contract and the promissory note.
Sellers should run a credit check and check references.
Sellers should require a down payment, which gives buyers a stake in the home, making it less likely they will walk away. Chad Corbett, a real estate agent from Roanoke, VA, suggests that buyers put down 10% “if you want the seller to take you seriously.”
Corbett also suggests that sellers “talk with a CPA about the tax benefits of selling with owner financing vs. selling outright.”
Buyers with poor credit should focus on raising their credit score so they can refinance before the balloon payment is due.
WHY REAL ESTATE ASSESSMENTS MATTER
The real estate assessment letter you filed away unopened is the driving force behind how much you pay in property taxes.You might not think too hard about your real estate assessment, the dollar value the local government puts on your house and land. You should. The assessment determines how much you pay in property taxes. Once you understand your real estate assessment, you’ll understand your property tax bill — and, more important, whether you’re paying the right amount.
What Property Taxes Pay For
Your local government needs every dime it can collect to pay for the services you expect as a resident: schools, libraries, hospitals, and so on. Much of that revenue comes from property taxes. In normal times, real estate values climb steadily, allowing local governments to take in a little more every year to keep up with inflation and perhaps even add a few services. Property tax bills usually come due once or twice a year.
The situation gets stickier when real estate values decline. If that occurs, local governments generate less revenue from property taxes, meaning the tax rate needs to go up, the money needs to come from somewhere else, or spending on services needs to go down.
Not all counties can just raise taxes at any time. Sixteen states limit the property taxes counties can collect, and 38 of them limit property tax rate increases, property tax assessments, or both, according to the National Association of Counties.
Assess Your Real Estate Assessment
No matter if property values are rising, falling, or stagnant, you need to understand how you’re being taxed. Everything starts with your real estate assessment letter, which reveals what your property is judged to be worth by the local government. The letter will differ, depending where you live, but most will have:
A legal description of your house
Separate values for the land and the structure
Add those two numbers together to get your home’s assessed value.
Some local governments will appraise your home every year, others every two or more years. Tax assessors generally use one of two methods to come up with an assessment value for your home.
1. The most common method: Looking at recent sales of comparable homes. Keep in mind that “recent” is a relative term. To come up with a real estate assessment, assessors may be looking at sales that occurred as long as 18 months ago
2. Alternative method, especially in the absence of recent sales data: Calculating the cost to rebuild your home, and adding that to the estimated worth of your land to come up with your home’s assessed value.
Assessments Used to Calculate Property Tax
How much you pay in property taxes is based on your real estate assessment. You multiply your assessed value by the local tax rate and that’s how much property tax you pay.
It can become more complicated if there are multiple taxing authorities where you live — a city and a county, for example — or if there are special one-time assessments. Qualifying for property tax exemptions, perhaps due to age or disability, can also alter the formula. Some local governments offer online calculators on their websites, or you can call the tax assessor’s office for help.
How Property Taxes Get Calculated
If you want to run the numbers for yourself, don’t be intimidated by how your tax rate is expressed. Sometimes it’ll take the form of a percentage, say 1.5%, or perhaps a decimal, 0.015. Both equal the same thing.
In the 0.015 example, the owner of a home that’s assessed at $100,000 would owe $1,500 a year in property taxes. Other times it’ll be expressed as an amount per $100 or $1,000 of home value. In the case of a 1.5% tax rate that would mean $1.50 per $100 or $15 per $1,000. Regardless, the math doesn’t change: Multiply $100,000 by 0.015.
Make Sure Your Assessment is Accurate
Read your real estate assessment letter carefully, look for errors, and challenge your assessment if it seems too high.
If you find a way to reduce your real estate assessment, whether by contesting it or qualifying for an exemption, the savings can add up. The median annual property tax paid in the U.S. is about $2,000, or about 1% of the $200,000 median home value. By lowering the value of the home by 15%, you’d also lower the tax assessment by 15% since property tax is calculated based on value. So you’d save $300 on taxes.
This article provides general information about tax laws and consequences, and shouldn’t be relied on as tax or legal advice applicable to particular transactions or circumstances. Consult a tax pro for such advice.
SHOULD I RENT MY HOUSE INSTEAD OF SELLING IT
The results of Fannie Mae’s June 2015 National Housing Survey, were just released showing that more and more homeowners are warming up to the idea that now may be a great time to sell their home. The amount of respondents that stated that now is a good time to sell rose three percentage points to a survey high of 52%; which may translate to a healthier market as more homes are listed in the coming months. At the same time “the percentage of respondents who expect home rental prices to go up rose to 59% – a new survey high.” Doug Duncan, senior vice president and chief economist at Fannie Mae, gave this insight: The expectation of higher rents is a natural outgrowth of increasing household formation by newly employed individuals putting upward pressure on rental rates. There is a chance that those who believe rental prices will rise may consider renting their house rather than selling it at this time. However, if you have no desire to actually become an educated investor in this sector, you may be headed for more trouble than you were looking for. Are you ready to be a landlord? Before renting your home, you should answer the following questions to make sure this is the right course of action for you and your family.
10 Questions to ask BEFORE renting your home:
How will you respond if your tenant says they can’t afford to pay the rent this month because of more pressing obligations? (This happens most often during holiday season and back-to-school time when families with children have extra expenses).
Because of the economy, many homeowners cannot make their mortgage payment. What percentage of tenants do you think cannot afford to pay their rent?
Have you interviewed experienced eviction attorneys in case a challenge does arise?
Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied home?
Will you allow pets? Cats? Dogs? How big a dog?
How will you actually collect the rent? By mail? In person?
Repairs are part of being a landlord. Who will take tenant calls when necessary repairs come up?
Do you have a list of craftspeople readily available to handle these repairs?
How often will you do a physical inspection of the property?
Will you alert your current neighbors that you are renting the house?
Bottom Line: Renting out residential real estate historically is a great investment. However, it is not without its challenges. Make sure you have decided to rent the house because you want to be an investor, not because you are hoping to get a few extra dollars by postponing a sale.
WHAT ARE TIPS FOR FIRST-TIME HOME SELLERS
A number of economists are forecasting an increase in home sales this year, and some are predicting that more first-time buyers will be in the mix. That’s great news for sellers, particularly first-time sellers most likely to have the kind of starter homes these buyers will want. Below are some tips for those selling a home for the first time.
Prepare for your own purchase.
Before selling your home, give some careful thought about where you will live next, said Hedda Parashos, owner of Palisade Realty in Spring Valley, Calif. “Planning ahead will save the time and money associated with moving multiple times or trying to get out of a deal after you sign a purchase agreement,” she said. “Your Realtor can help you locate a new home or rental before you close escrow or negotiate a lease back.”
If your plan is to buy another home and finance it, get preapproved for a mortgage. That way, you’ll know what you will be able to afford—and can eliminate surprises, she added.
It’s also getting more common these days—in certain markets—to purchase a home contingent on the sale of your existing one, said Christina Esala, associate broker and team leader with Tierra Antigua Realty, in Tucson, Ariz.
Get the home move-in ready.
If you can afford it, do whatever you can to make your home move-in ready. That means replacing ripped screens, broken baseboards, leaky faucets and making cosmetic repairs, as well as updating landscaping, Parashos said. Your house needs to be in showing condition all the time, she added.
At this point, start looking at your home as a house—stripping all sentimental value from the place, since your buyer won’t care about the tree you planted or the kitchen tile you installed yourself, said Geoff Bray, real-estate agent and partner at the Reuter Bray Group of RE/MAX Results in Minneapolis.
Enlist the help of a good real-estate agent.
Many people choose real-estate agents based on referrals from family and friends, but look beyond that to make sure you’re working with someone who does a lot of business in your particular neighborhood. While sales information for individual agents often isn’t publicly available, you could check with your local Realtor association group for the data, call the local multiple-listing service or ask a brokerage about their top sellers.
Online reviews of real-estate agents can also be helpful, Esala added. At the very least, get statistics from the agent, asking him or her how many homes they’ve sold recently, where the homes have been located and what the average sales prices have been, Esala said.
Price it right.
A good real-estate agent will help you price the home right—from the start. “Nothing will attract more buyers than making the right choice when pricing your home and nothing will deter buyers more than overpricing,” Parashos said. Overpricing often means a longer stay on the market as well as future price cuts—which often makes a home listing look stale and less desirable.
Market the home appropriately.
In addition to getting on the multiple-listing service, or MLS, as well as home listing sites online, your real-estate agent might recommend other methods of advertising, including open houses and direct mail postcards. Ask the agent how he or she plans on marketing the property before hiring the agent.
Quality photography of the home is also important. Those who use professional real-estate photos sell listed homes 32% faster than all other listings, according to VHT Studios, a real-estate photography network for homes and businesses. Take it for what it’s worth, a statistic from a company in the photography industry. But also think about the homes that you spend the most time looking at online; chances are they’re the ones with a variety of clear, quality pictures.
Make the house available.
Some sellers create restrictions on when their home can be shown, but being inflexible on this point can hurt you. “People, if they want to see it now…they’re going to contact that agent and going to want to see it immediately,” Esala said. “Make your home available for all of the daylight hours,” she said. Otherwise, within two days, prospective buyers will find another home and forget yours.
Plan your negotiation.
Know what you will and won’t give up when it comes to your sale, from price to closing date, repairs to closing costs. Knowing what outcome you want in advance will help you avoid haggling over minor items that could cost you the sale.
Finally, don’t focus as much on the final sales price as on the final net price.
Many first-time buyers ask for sellers to help with closing costs, for example, which affects the net cost.
If you are seeking assistance with the sale of a home, provide your contact information and a brief message indicating your needs below:
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