Selling Your Home: How To Do It Effectively

This Financial Guide gives you suggestions that can increase the sales price and reduce the frustrations involved in selling a home. It discusses how to find a good agent, how to make your home more attractive to buyers, how to negotiate effectively, and how to handle the moving process.

Here are some tips for getting the best possible price for your home and making the process as smooth as possible. By putting some time into choosing a real estate agent, for instance, you can avoid wasting unnecessary time on the market due to an ineffective or haphazard sales strategy. Further, there are actions you can take to make your home more saleable.

Finding A Good Real Estate Agent

To find a good real estate agent, gather a list of names of candidates you will interview. You may want to consider recommendations from colleagues, friends, and professionals, as well as names listed on posted “for sale” signs, especially for houses that have been sold. Once you have at least three names, schedule a telephone or in-person interview with the agent. You may encounter some resistance; if you run into a broker who refuses to take the time to answer your questions, just move to the next one.

Tip: Although a popular practice in recent times (due to the savings on commissions paid to a broker), selling your own home without a broker is often more difficult unless you have a buyer in mind.

Be sure to ask potential agents the following:

Reviewing The Listing Agreement

The listing agreement is a contract between the homeowners and the agent. It states how much the agent will be paid and what services will be provided.

An exclusive right-to-sell type of agreement gives the broker the exclusive right to sell your house for a limited period of time. Other types of listing agreements vary either the exclusivity or time period of the listing. No matter which of these agreements are signed, the listing agent gets 100 percent of the commission if he or she sells the house and part of the commission if another broker sells the house.

Speeding Up The Selling Process

There are various things you can do before and during the selling process to move it along and make it less onerous. A good real estate agent may suggest the following:

Negotiating Effectively

Although it is the broker’s job to do the actual negotiating, the homeowners should stay involved in the process. Here are some tips for negotiating with buyers, once they have made their first offer.

One final piece of advice is to avoid being confrontational, which can kill a potential deal during the negotiation process. The offers you receive will likely be 10 to 15 percent below your asking price. Do not be offended by this or by any “low-balling” techniques engaged in by buyers. Be willing to make some concessions. Make counter-offers and try to bring the offer closer to your asking price. If you feel that an offer is unreasonable, however, you can always reject it outright and wait for another buyer.

Planning Your Move

Once you have signed the contracts, it is time to start planning the move. The closing date, which is generally your moving date, will fall about two months after the contracts are signed.

HIRING A MOVING COMPANY

One thing you should do immediately after the contracts are signed even though your moving date may be months away is to begin calling moving companies. Try to get recommendations from friends or colleagues. Call a number of movers for estimates. You will have to provide them with the number of miles involved in the move and the approximate weight of your belongings. The mover will help you in making this estimate. Do not use a mover whose estimate seems too low. The services provided may be second-rate. You get what you pay for!

Ask in advance about extra charges for heavy items, stairways, or pianos. Be aware that having the movers pack for you will increase your moving bill by about 30 percent. Also, you may pay a premium if you schedule your move during busy moving times, generally after the 25th of the month or before the 2nd.

Getting Ready For the Move

Right after you have scheduled your move, start taking care of the following items:

Then, as you get closer to the date of your move, take care of the following:

Tip: Leave the old account open until all outstanding checks have cleared. To avoid fees, you may need to leave in any minimum balance required. Be sure to leave your new address with the old bank.

Notifying People Of Your Move

Here is a list of people you should notify when you change your address and phone number. Although the list is not all-inclusive, it can be used as a starting point. You may need to notify these parties at both your old and new locations. Bear in mind that you may need to follow the instructions provided by banks, utilities, and credit card companies in order to effectively change your address. For instance, a phoned-in address change may not become effective with a lender if the lender’s policy is to require written address changes.

Figuring The Tax

Your responsibilities do not end with the sale of the old home and the move to the new one. There are tax consequences, often complex, that need to be considered. How much is the gain? How much of it is taxable? How can you minimize the tax impact? Here, professional guidance is important.

Related Guide: To gain a better understanding of the tax consequences, please see the Financial Guide: SELLING YOUR HOME: How To Minimize The Tax On The Gain

Agents’ Titles and What They Mean

When looking for a real estate agent, you may come across the following commonly used titles. Here is a basic definition of each:


Note
: On a home sale, the listing agent and the selling agent split the commission with each other and with their principal brokers.

Improvements That Help The Most

The following improvements and additions may increase the resale value of your home. Of course, bear in mind that the value home buyers place on various improvements will vary regionally, and even from neighborhood to neighborhood. But the list might serve to give you some ideas.