How Can I Sell My Home to Take Advantage of the Buyers Market?

We all have said at one time or another “I Wish I Would Have Bought Back When" Well truly now is When! These days many people would invest in real estate if they could only sell their existing home. You must be able to look at the big picture. With the incentives offered in the market today the future potential return can far exceed what you think you are losing on your current home. The perceived loss of equity is mostly that, perceived. Most people were not aware of what their home was worth before the news told us about it, so it is understandable that they would be shocked. It is true that property values have fallen, that is a fact. With that, the actual number of existing home sales has gone up! Selling your existing house these days is very possible but you must be serious and committed to do the things that buyers are looking for. I have found with some creative thinking and a real understanding of the numbers, you will find yourself winning in the end. Here are a few ideas to help you gather the information you will need to make the most informed decision.

Before the Sign Goes Out in the Yard

Work With a Realtor – The days of “one sign, one sale” is gone. With all the information on various mass media outlets available today, many prospective purchasers (as you are soon to be) are more informed than at any other time. Having someone committed to being there to help you is more important than it has ever been. Many people do not realize how time consuming and costly the process of marketing a house listing (correctly) can be and that is just the start. Great agents are constantly educating themselves to the legal, technical, sociological aspects of the real estate market just to insure your best interests. In fact, the smoother and quicker the process of selling your home seems, it is a likely sign of the skill and education of your agent possesses. A great agent has a very real way of “making it look easy.” The more you think that they did not earn it the more probable it is that they did.

Get Your Home Appraised – The best way to negotiate on your new home is to know what you can expect to make on your existing one. Although you may have a very talented agent, a true appraisal of your home validates your asking price. Only a registered appraiser is legally trained to do that for you. Think about it; you get an offer, you address any issues, you negotiate a fair deal and then the lender calls your buyer to let them know that the appraised value of the home is just not there. Now you have run the risk of losing that buyer or having them ask for even more money off the price.(remember the smooth process I mentioned earlier) In this market where every buyer is a blessing and one of your first ten potential purchasers will more than likely be your buyer. Can you really afford to take the chance on losing them? With the power of the appraisal in you hand you can stand up and feel good about your asking price and take the emotional ache of not being sure if you should consider an offer or not. When every dollar is on the line appraisal will help you make the most educated decision. Get an appraisal.

Get a Home Inspection – “What, you want me to spend more money?” No, I want you to sell your home as quick as possible for the most money possible without spending a lot of money. Having your home inspected tells your probable buyer that you are an honest seller with nothing to hide. It is a fact that most buyers these days will have a home inspection done and should that inspector find anything, even things considered to be “minimal or normal” the damage is done. They will ask for some crazy discount to off set the cost or worse not feel good about the investment and move on. An inspection is also helpful when marketing a house. I know of people that went out and remodeled their kitchen for thousands of dollars to get the home ready. The reality was they only needed to spend a few hundred dollars in repairs that an inspector found. With just these things alone, they would have been ready to out shine the competition. Get a home inspection Offer a home warranty – “You are killing me!” Ok, Ok, I know the out of pocket expenses can add up. Hopefully you have done basic maintenance to your investment to protect it. So the cost of repairs should be manageable. In today’s market you are competing with builders and their deeply discounted inventory homes. All of the homes have one thing in common, a warranty. The great thing for you is that many pre owned homes and sellers do not offer warranties. This fact alone gives you an additional edge over the other homes in you neighborhood. These warranties are available through third party companies and offer your buyer very good protection for very little money. (Typically $350 to $600 dollars in our area) When you offer a warranty you will again cement into the mind of your buyer how great an investment your house is and how you are not just forgetting about it or them after the sale. As far as the out of pocket expenses go the warranty can be paid for at the closing table and just subtracted from the return on your investment.

Do The Math – Once you and your agent gather the information from the appraisal, you can come up with the asking price on your house. The appraised value does not always dictate what the asking price will be. Many factors add to the estimated value. Demand can be highly localized. Things like schools, and distance to highways, and architectural design features can play a big role in what your house will sell for. Add up your estimated costs for the appraisal, inspection and its repairs. To that add the warrantee and real estate fees and what is left on you current mortgage. Subtract those from the sales price (give yourself a 5% cushion for negotiation) and you have arrived at your “estimated working equity”. It is important to remember that no matter what this number is, it will be normal to feel that it is less than you expected.

The Great News! You now have powerful information which to go out in the market place to position you self to take advantage of what many people say is the best time to invest in a new home ever. That $25,000 “hit “ you take on your house can translate into things like a $40,000 basement finish or maybe ¼ point interest rate buy down on your new mortgage. Huge money! A new home purchase has all the potential in the world to make it up to you. It’s less expensive now that ever before to finance and invest in a home. Even building a new custom home, which used to be reserved to people that would pay top dollar, is a great deal. The lack of demand on the work force means you will get better quality at better price. You can relocate to the areas that you have always wanted to live in and have a home with the features that best suit your lifestyle. In the end it is about improving your quality of life and investing your hard earned money wisely.

In part 2. I will discuss the new home market and all the creative ways you can set yourself up to win and win big.

Happy Hunting!