STEPS TO SELLING A HOME
You home is likely your most expensive asset. It is important to ensure that you have taken the necessary steps to reduce your risk exposure and maximize profit.
STEP ONE - GET PRE-APPROVED FOR FINANCING
STEP TWO - CHECK YOUR MORTGAGE PAYOFF
STEP THREE - DETERMINE HOW MUCH YOUR HOME IS WORTH
STEP FOUR - ESTIMATE YOUR COSTS TO SELL
STEP FIVE - ESTIMATE COSTS TO BUY NEW HOME
STEP SIX - CALCULATE YOUR ESTIMATED PROCEEDS
STEP SEVEN - SHOWING THE HOUSE
STEP EIGHT - GET PSYCHED TO LET PEOPLE IN
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STEP one - GET PRE-APPROVED FOR FINANCING
It is very risky to sign a contract to sell your home before you know if you are qualified to buy another. If you financial circumstances have changed since your last purchase, you may not qualify for another loan, or the market may not provide a price that will allow you to buy the type of replacement home you want. The last thing you want is to end up renting or buying something that was far from ideal.
Before you decide to sell the 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.
Finding the right loan and lender is crucial to your home buying success. It's up to you to determine which lender is best for your needs, and it's always a good idea to have at least a bit of background about the loan process before you talk to a lender.
Visit our Mortgage Resource Centre for more information
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STEP TWO - CHECK YOUR MORGAGE PAYOFF
Call your lender to check the payoff for your current home mortgage. Be sure to request the breakdown of any additional administration fees or penalties. You'll need the figure to complete Step 6.
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STEP THREE - DETERMINE HOW MUCH YOUR HOME IS WORTH
Determine your home's fair market value. Real estate agents will usually help you determine value as a courtesy, but you might take it a step further and order an appraisal.
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MAKE NECESSARY REPAIRS AND PREP HOUSE
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.
Make all needed repairs unless you want the house to be regarded as a fixer-upper. When getting your home ready to sell, think of it as a product competing with brand new homes. It needs to show well-which means clutter-free and well kept. These easy to read guide is packed with dozens of useful tips on how to get your house to show to its best potential: from weeding the flower beds to making sure the litter box is clean. The house should be spotless and you need to have a plan to whip it into shape when a prospective buyer is coming on short notice. It's a lot of work to get everything done, but it will pay off.
Click here to read the Getting Your House Ready to Sell guide.
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STEP FOUR - ESTIMATE YOUR COSTS TO SELL
- Real estate commission if you use an agency to sell.
- Advertising costs, signs, other fees if you plan to sell by owner.
- Lawyer fees and disbursements.
- Other professional fees.
- Land transfer tax for the sale.
- Prorated costs for your share of annual expenses, such as property taxes, home owner association fees, and fuel tank rentals.
(called adjustments)
- Any other fees typically paid by the seller in your area (surveys, inspections, etc.).
- Any costs associated with maintenance and preparing your home for sale.
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STEP FIVE - ESTIMATE COSTS TO BUY NEW HOME
Calculate moving expenses, loan costs, down payment, home inspections, legal fees, 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 loan pre-approval.
Links
Home Purchase Cost Estimator
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STEP SIX - CALCULATE YOUR ESTIMATED PROCEEDS
- Deduct your mortgage payoff from your home's fair market value.
- Deduct your costs to sell from the remainder to get an estimate of the proceeds you will be paid at closing.
Will your closing proceeds cover your costs to buy a new home? If not, do you have cash or other funding to make up the difference?
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STEP SEVEN - SHOWING THE HOUSE
Your house should always be available for show, even though it may occasionally be inconvenient for you. Let your listing agent put a lock box in a convenient place to make it easy for other agents to show your home to home buyers. Otherwise, agents will have to schedule appointments, which is an inconvenience. Most will just skip your home to show the house of someone else who is more cooperative.
Most agents will call and give you at least a couple of hours notice before showing your property. If you refuse to let them show it at that time, they will just skip your house. Even if they come back another time, it will probably be with different buyers and you may have just lost a chance to sell your home.
Home buyers will feel like intruders if you are home when they visit, and they might not be as receptive toward viewing your home. Visit the local coffee house, yogurt shop, or take the kids to the local park. If you absolutely cannot leave, try to remain in an out of they way area of the house and do not move from room to room. Do not volunteer any information, but answer any questions the agent may ask.
When you know someone is coming by to tour your home, turn on all the indoor and outdoor lights – even during the day. At night, a lit house gives a "homey" impression when viewed from the street. During the daytime, turning on the lights prevents harsh shadows from sunlight and it brightens up any dim areas. Your house looks more homey and cheerful with the lights on.
Do not use scented sprays to prepare for visitors. It is too obvious and many people find the smells of those sprays offensive, not to mention that some may be allergic. If you want to have a pleasant aroma in your house, have a potpourri pot or something natural. Or turn on a stove burner (or the oven) for a moment and put a drop of vanilla extract on it. It will smell like you have been cooking.
If you have pets, make sure your listing agent puts a notice with your listing in the multiple listing service. The last thing you want is to have your pet running out the front door and getting lost. If you know someone is coming, it would be best to try to take the pets with you while the home buyers tour your home. If you cannot do that, It is best to keep dogs in a penned area in the back yard. Try to keep indoor cats in a specific room when you expect visitors, and put a sign on the door. Most of the time, an indoor cat will hide when buyers come to view your property, but they may panic and try to escape.
Especially if your kitchen trash can does not have a lid, make sure you empty it every time someone comes to look at your home – even if your trash can is kept under the kitchen sink. Remember that you want to send a positive image about every aspect of your home. Kitchen trash does not send a positive message. You may go through more plastic bags than usual, but it will be worth it.
Not everyone makes his or her bed every day, but when selling a home it is recommended that you develop the habit. Pick up papers, do not leave empty glasses in the family room, keep everything freshly dusted and vacuumed. Try your best to have it look like a model home – a home with furniture but nobody really lives there.
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STEP EIGHT - GET PSYCHED UP TO LET PEOPLE IN
If you're listing with a real estate agent, she'll 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.
Unless there's a valid reason for it, don't ask your agent to be present for all showings, because that requirement can be the kiss of death for showing activity. Other agents want privacy with their buyers and they don't usually have time to work around your agent's schedule.
Make the house accessible. That means it should always be ready to show. Many agents won't bother showing a house that takes 24 hours to get into.
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