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In the past there have been a number of sellers who have signed a contract to sell their house before they knew if they were qualified to buy another. 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. |
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Before you decide to sell your house, get pre-approved 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.
Start looking for two types of real estate: 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?
2. Check Your Mortgage Payoff
Call your lender to check the payoff for your current home mortgage. You'll need the figure to complete Step 6.
3. Determine How Much Your House Is Worth
Determine your home's fair market value. Arm yourself with the facts. It is best to access the knowledge of a professional – but don’t spend money on a formal appraiser – your REALTOR will provide a Comparable Market Analysis for you. Your agent will determine which type of market you are in (a buyer’s market, a seller’s market, or a neutral market) ; then study your area to compare your home to others based on style, size, number of bedrooms, baths, garage, basement, view, and lot size.
4. Estimate Your Costs to Sell
· Mortgage payoff
· Real estate commission
· Attorney, closing agent and other professional fees
· Property Transfer Tax or Land Gains Tax, if applicable
· Prorated costs for your share of expenses; such as property taxes, homeowner association fees, municipal water and sewer costs, and fuel tank rentals.
· Any other fees typically paid by the seller in your area
Real estate agents deal with transactions every day and can give you a very close estimate of seller closing costs.
5. Estimate Costs to Buy a New Home
· Calculate moving expenses, loan costs, down-payment, home inspections, title work and title 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 a loan pre-approval.
6. Calculate Your Estimated Proceeds
1. Deduct your mortgage payoff from your home's fair market value.
2. Deduct your costs to sell from the remainder to get an estimate of the proceeds you will be paid at closing.
7. Make Necessary Repairs
Prepare your home to sell. Make all needed repairs unless you want the house to be regarded as a fixer-upper. I'm not referring to cosmetic updates--just items in need of repair. Anything that's obviously broken gives potential buyers a reason to offer you a lower price, especially if it's one of several repair hot-spots that worry buyers the most.
8. Get the House Ready to Show
Get your home "show ready". Most houses need at least a little “spiffing-up” before they are shown to potential buyers. Great curb appeal, fresh paint indoors (and sometimes out), organized closets and cabinets, sparkling clean windows and appliances and a clutter-free look are essential if you want the house to appeal to buyers.
9. Get Psyched-Up to Let People In
Your real estate agent will ask you to leave when the house is shown. Why? Because lurking sellers make buyers nervous - they don't feel comfortable inspecting the house when they feel they are intruding in your personal space.
10. Make the
house accessible.
That
means it should always be ready to show. Many agents won't bother showing a
house that takes 24 - 48 hours to get into.
Licensed in the State of Vermont
