Do These 9 Things First
Selling a home can be a stressful and overwhelming process that rarely runs as smoothly as the seller had hoped. If you’re planning on selling your home in the near future, don’t worry. The following steps can help you prepare for the sale and avoid any last-minute scrambling.
1. Hire a professional
Choose a qualified real estate agent with experience in your particular market. Ask friends and family members for recommendations, and consider interviewing several agents in order to find the best fit.
2. Understand the market
Before listing your home, it’s important to understand what market conditions may impact its desirability and potential listing price. Questions to consider include:
- Is it a buyer’s market or a seller’s market?
- How many similar listings are in the area?
- What is the average number of days homes are on the market before selling?
- How does my home compare to others in the area (number of bedrooms and bathrooms, lot size, number of garage spaces, etc.)?
- Is there any upcoming development activity that could have a positive or negative impact on my home’s value?
3. Research your home’s value
With your real estate agent’s guidance, begin to gain an understanding of what other homes in the area have recently sold for. Consider homes with similar square footage, the same number of bedrooms and bathrooms, similar lots, etc. This can help you determine a realistic listing price.
4. Declutter and repair
This can be the most difficult task for many homeowners. You’ll want to significantly par down your belongings in order to make your home feel as open and inviting as possible. Clean out closets and put away family photos. Minimize decorative items on shelves and tabletops. You may even consider renting a storage unit to store any unnecessary possessions during the sales process.
With a critical eye, look for any maintenance issues that should be addressed. Patch any holes in the walls and ceilings. Pull weeds from the flower beds and freshen up the landscaping. Add a fresh coat of paint to any areas that need it. You’ll want your home to be as appealing to potential buyers as possible.
5. Consider a pre-sale home inspection
While a pre-sale inspection is certainly an optional step, it can be a wise investment — especially if you’re trying to sell your home in a buyer’s market. A detailed inspection report can alert you to any significant structural or mechanical problems in advance, allowing you to either fix or disclose them to potential buyers. This can help streamline the sales process and prevent any unexpected issues down the road.
6. Schedule professional photos
In the world of online listings, it’s vital to have high-quality, professional photographs. Choose a photographer who has experience with real estate photography. This professional should know how to properly light and photograph rooms to make them look larger and more appealing. Your real estate agent should be able to help coordinate this process.
7. Consider your closing costs
It’s important to be aware of the potential costs associated with selling your home. It’s not uncommon for a seller’s costs to equal 8% to 10% of the home’s sale price. A seller’s typical expenses include:
- The real estate agent’s commission (typically 5% to 6% of the home’s sale price)
- Title insurance
- Transfer tax
- Prorated property taxes
- HOA fees
- Attorney’s fees
8. Plan for taxes
Fortunately, if you’ve owned and lived in your home for at least two of the last five years, you likely won’t owe taxes on any profit up to $250,000 for individuals or $500,000 for married couples. Any profit in excess of that amount will be taxed at capital gains rates. Your wealth manager and CPA can help you plan for any other potential tax implications resulting from the sale of your home.
9. Make a plan for your profits
If you hope to use the proceeds from the sale of your home to fund your retirement or make another large purchase, it’s wise to make a plan in advance to help ensure you’re able to accomplish your specific goals. Take time to consider exactly what you wish to accomplish, and what it will take to get you there, then work with your wealth manager to develop a strategy that’s in line with your overall financial plan.
At Creative Planning, we understand how overwhelming the process of selling your home can be. Our teams are here to support you throughout the process and help ensure any decisions you make are furthering your long-term financial priorities. If you’d like to discuss your home sale, or any other financial matter, please schedule a call.
