No sooner did you purchase your home than you probably started wondering what it would be like to try and sell it someday. Now that you are planning to put it on the market, you've probably already moved out emotionally and just want to get started on finding your next home. But you'll have a lot of work to do if you want to fetch top dollar on the sale. Luckily, you don't need to spend a lot of money prepping, just some time and effort.
Here's a checklist to get you started:
Set your goals for the sale
Do you want a quick, hassle-free sale, and only want to get out of the home what you put into it? Or, are you willing to take more time and effort in order to get the highest possible price? Make sure you and your spouse have the same goal in mind. Also, do you have a plan for where you will go once you sell? With financing speeding up, some buyers will be looking to close in a matter of weeks. Decide if you would be willing to move out on a few weeks' notice and where you would go. If you plan to try and time the sale with the purchase of your next home you won't be able to be as flexible about the closing.
Decide whether or not to hire a real estate agent
Although we recommend that you at least try selling your home without a broker, going solo isn't for everybody. Learn more about both options by checking out Choosing a Broker and Selling Without a Broker.
Price the house
Evaluate the market in your area and set a realistic price on the house, either by checking the sale price of comparable homes in your town or hiring an appraiser. (You can get information and a referral from the Appraisal Institute.) It is critical to set the right asking price. You don't want to feel you sold for too little, but an overpriced home can languish on the market and go stale. Real estate agents will recommend a price, but you should probably do some homework yourself since some brokers will set a high price to get your listing, only to recommend that you lower it later.
Identify your home's flaws or problems
Sellers are obligated to disclose any major problems or flaws in the structure or property, including things like dry rot, termites, asbestos, septic problems, or a new highway slated to run nearby. The disclosure requirements vary by state, but if you fail to mention the leaky roof or flooding basement, you could be sued for fraud. There is really no upside to trying to hide problems anyway since most buyers will have the home inspected before closing.
If you are selling an older home that you have lived in for years, you may want to get it inspected yourself before you set the price. You can always sell the house "as is" if it's a real fixer-upper. You also might want to shell out some cash to fix small things, like a broken dishwasher or cracked tiles, so they don't enter into negotiations.
Get the house in showing condition
While you probably won't want to have major repair work done before a sale, small cosmetic touches can increase your home's value by thousands. Improve "curb appeal" by adding a row of flowers to the walkway, trimming the shrubs and painting, even if it's just the side of the house that shows from the street or the front door. Consider painting inside as well (white is best). Clean the windows, polish fixtures, buy some plants. Also, get rid of clutter. Remove extra chairs and tables to make rooms look more spacious, and clear off kitchen counters.
When you actually start showing buyers around, there are a lot of small ways to make your home more appealing. Of course, keep rooms and the yard meticulously neat. Also, turn on all the lights, fluff up pillows, light a fire in the winter and play soft jazz. Keep any pets out of sight.
Decide what goes and what stays
Before you start showing your home, you need to decide what will be included in the sale. If you want to take your Miele washer and dryer and your Sub-Zero refrigerator with you, tell serious buyers before negotiations start. Leaving behind the custom cushions and drapes designed for a window seat could turn out to be an attractive selling point.
Figure out your own finances
Make sure you know exactly what you'll net from the sale. Add up the amount you'll owe the bank, a broker (a whopping 6% of the sale if you go full-service) and the government. You may get a break on the capital gains tax in the new tax package (see Tax Issues). You also may get some cash back at closing for prepaid local taxes, home insurance or fuel.
Hire an attorney
Although an attorney won't really get involved until you draw up a contract of sale, it's good to get one on board early in the process. If you are selling the house on your own you may have questions about negotiating with buyers. If you use a real estate agent, you may want your lawyer to look at the listing agreement before you sign.
Start looking for a new home
Sellers are usually advised not to begin the search for a new home until a sales contract is signed. It's true that you don't want to be saddled with the costs of carrying two homes if the sale falls through. Plus, trying to perfectly time the two closings can make planning a move much more stressful. However, if you have to move quickly or you don't want to pass on your dream house, you have some options. A "bridge loan" will let you use the equity in your old house to buy a new one. You could also include a contingency clause stating that you will only buy the new home if the sale of your old home goes through.