Selling you home can be a stressful experience if you aren’t prepared. Be aware of what kind of pitfalls to expect and the process will go much smoother. Some of these pitfalls are avoidable. Unfortunately some are not. Here are a few things to be aware of before you sell.
1. Your neighbors will be curious. It’s possible you have neighbors you don’t care for and you would prefer them not to know anything about your business. It’s impossible to hide things from your neighbors and properly market your home at the same time. Those neighbors you don’t like can be a good source of potential buyers. Be as open as possible, and just remember you’re leaving and won’t have to see them again if you don’t want to.
2. An agent will over estimate the value of your home. Home valuation is more art than science. If you ask three different agents for an opinion of your home’s value, you will get three different answers. Many home sellers are tempted to go with the agent who gives the highest valuation. Most agents know this and in order to get a listing they give an overly optimistic value. Heck, they can always ask for a price reduction later.
This isn’t always in the best interest of the home seller. Before you go with that high value, ask direct questions about how he or she came up with that number. A good question to ask is “Which of the sold comparables you used most closely matches our home, and why?”
3. You don’t realize you own more stuff than you need. Before you sell, have a garage sale or donate items you don’t use any more. Homes with packed closets and clutter in general aren’t as attractive to potential buyers. When you do sell, the moving process will be easier and less expensive.
4. Once you find a buyer you will have 30 to 45 days to get out. Rarely do buyers have the patience to wait longer than that. In this current market we are in there is a lot less to choose from. You can end up making offers and get outbid on multiple occasions before you successfully purchase a new home. So, unless you are going to rent, it is a better idea to buy your new home first. This of course presents the possibility of owning two homes at the same time. Can you swing that?
6. The check you get at closing may not be as big as you thought. There is nothing worse than a surprise at the closing table. What gets deducted from the proceeds of the sale of your home? Mortgage(s), liens, assessments, commissions, taxes, legal fees, etc. Stay on top of this. Before accepting an offer ask your agent for a “Net Sheet” of your estimated proceeds. They won’t be able to know exactly what you will net at closing, but they should at least cover what they know, like their fees and closing costs. Once a lien search is completed the closing agent should be able to provide a preliminary closing statement also known as a HUD Statement. It should more closely reflect what you will get at closing. If your condo has an assessment that you are making payments on, make sure you understand what you are liable for when you sell. Sometimes the assessment must be paid in full by the seller and sometimes the new owner takes over the payments.
6. Your home may not be in as good shape as you think. Even the most well maintained homes can have some hidden defects. I had a closing almost get delayed at the last minute because the buyers insurer didn’t like the type of breakers in the electrical panel. No insurance means no financing. No financing means no sale. We were able to work things out, but there was panic on both sides for a couple of days. It’s not a bad idea to have your home inspected by a professional before you sell. This will prevent surprises and can help keep the buyers honest if they do an inspection and come asking for repair credits.
7. Real estate closings are often delayed. Real estate transactions are complicated and getting more so everyday it seems. Especially if there is financing involved. Typically you, as a seller, are supposed to be moved out before you go to the closing table. Think about what happens if the buyers can’t close on time? Hope for the best and prepare for the worst. Have a plan B.
By Tom Day
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