No matter how much you might fall in love with your first home, few people stay in one house their entire life. For one reason or another, the time may come for you to think about selling your home. Unfortunately, selling a home is just as complex as buying one.
Before you make the choice to start the selling process, sit back and have a think about whether it’s the right thing to do. Check out the following 5 questions you need to ask before selling your home for some pointers.
Why do I want to sell my home?
If it is a personal choice rather than something you have to do, it’s a good idea to think about whether selling your current home is really the best way to achieve your goals. The most common reasons people have for wanting to sell are that they want more (or less) space, or they’re in a tight spot financially.
If you need more space to accommodate a growing family, consider whether expanding your current home is a more viable option than relocating altogether, especially if it could disrupt your or your kids’ lives.
On the other hand, if you’re strapped for cash, an obvious solution may be to sell your home and downgrade or move somewhere more affordable. However, selling your home may be more expensive than you’d imagined, so make sure you know what taxes and what hidden costs are associated with selling. Otherwise, if things don’t quite go to plan, you might end up in even more trouble financially.
Can I afford to sell my home?
It’s not a given that you’ll make money by selling your home, and the process doesn’t come cheap. A lot depends on your specific circumstances; how much mortgage you still have to pay off, how much of a down payment you put down, etc. It’s essential that you find out exactly how much you owe on the mortgage and any other loans you may have taken out and compare it to the estimated value of your home.
If your house value is higher, chances are you’ll make a profit; but if the value is lower, you could be taking a large risk. You’ll still need to pay off your debts after you sell, even if the house sale doesn’t cover it all. Bear in mind that you might also be penalized for breaking your mortgage before the term has ended.
Additionally, there are numerous other costs you’ll need to take into consideration when selling;
- Agent’s commission; typically, around 5% of the sale price
- Closing costs and legal fees; normally around 2% of the sale price
- Home pre-inspection and appraisal; around $200 to $500, a pre-inspection will pick up any problems before you’ve even listed the home, avoiding nasty surprises, and giving you a chance to fix any issues or adjust the sale price accordingly.
- Appraisal: appraisals typically cost between $250 and $400, and give an approximate value of your home.
- Repairs and landscaping: depending on the results of your pre-inspection, repairs could cover anything from a new coat of paint to more major jobs such as replacing the roof. It’s important to be aware of how much each job will cost, and whether you can afford it.
- Staging and photographs; many agents will include basic marketing in their fee, but if you want to go the extra mile, you might employ professional stagers and photographers. Staging fees average out at around $400, while professional photos can cost between $500 and $1000.
Should I hire an agent?
Selling your home privately has the advantage that you’ll retain the agent’s commission. However, it’s a good idea to think about what the advantages of hiring an agent are. A qualified and experienced agent should know all the legalities and local codes, as well as the marketing aspect of selling a home. They will save you a lot of work and stress as you try to tackle a task you probably don’t fully understand and will always strive to get the best price.
However, if you have a buyer lined up, or wish to sell to a relative or friend in a relatively straightforward transaction, you could save a lot of money by not hiring an agent.
What do I need to do to get the best price?
Getting the best offers means you’ll probably have to do a bit of work before listing your home. It’s important to put yourself in the shoes of the seller and work on the areas they’re most likely to be hooked by.
Curb appeal is extremely important, so it’s worth spending a bit of time and money on making a great first impression. The entryway to your home is the first indoor area the potential buyer will see and can often be where they make their mind up, so making sure it looks great is important. The kitchen and bathrooms are other important areas.
Mostly, you need only give the place a good clean, declutter it, and depersonalize your space, so that buyers can envision their life in your home. However, you may need to update certain areas or make pricey repairs if there are some major problems or if the property sustained structural damage over the years.
Is now the right time to sell my home?
Once you’ve thought about your finances and worked out whether you can afford to, just think if now is the best time. Perhaps it would be best to wait until your mortgage term ends, to avoid the costly penalties. Or maybe the fees are worth it to take advantage of a seller’s market. The key takeaway here is to do your research and stay on top of what everything will cost.
Typically, spring and early summer is the best time to sell, as the school year is ending, the weather is good, and everything looks great. But don’t get fixed on this time frame, there are buyers all year round. Try to avoid selling during a buyer’s market and do your best to take advantage of a seller’s market.
Selling a home involves a fair bit of work and research, so make sure you have the time and energy for the process, in order to get the best results.