Selling your home is an exciting prospect however it is no secret that unexpected expenses often rear their ugly head in the process. To best prepare yourself, it is wise to take a good look at your home with a fresh set of eyes and have Hart Property Advisors help you see your home from a potential buyer’s perspective. The majority of buyers are looking for a move-in-ready home to make their own. Making your home the most appealing it can be could add-up quickly if major changes need made on the spot, however, with some elbow grease and insight from your Realtor you can account for the necessary costs upfront and sell your home in no time!
As the first impression your potential buyer has of your home, curb appeal is vital to your home’s selling power. Be se sure that your lawn is healthy and manicured and your landscaping beds are neat. Hiring a landscaper is a great option, but to save on money you can pull weeds, trim hedges, prune trees, and add fresh mulch yourself. There’s no need to create an Eden as most buyers tastes vary and they are looking for a clean slate to make their own.
Do you remember the last time your house was painted or your roof was patched, repaired or replaced? How about the last time your second floor windows were washed (sashes and sills included)? While these are things you may not be able to handle on your own, knowing that they make a difference in buyers’ offers ahead of time will give you time to shop around to find the best deal possible or the affordable help of some family and friends. Your Realtor should have some reputable contractors to refer you to for the larger jobs. Be sure seasonal maintenance like cleaning gutters and raking leaves is also completed as part of your outdoor maintenance checklist.
Just as fresh paint can make a big impression on the exterior of your home, the inside of your home should have freshly painted walls in neutral colors. Again, think about creating blank slate for your buyer. Professional painters can cost thousands of dollars, but having a few friends over for a cookout and paint day can be the perfect workaround (remember the refreshments)! If you’ve recently painted or have avoided bold color choices you may be able to skip this step altogether and spot clean as needed. If you have stained carpeting, rent a carpet cleaner to see if you can remove the stain yourself before you hire a professional. Condition finished woodwork with Lemon Oil or similar conditioner to enhance woodgrain and finish or paint outdated woodwork glossy white to match the contemporary color palette. In a highly competitive Buyers market (when there are many homes for sale), small finishing details can set your home apart from the others in the neighborhood.
General Home Maintenance
You may not use every room in your home on a regular basis so if an outlet doesn’t work or a certain window doesn’t open all the way you’ll want to find out before your buyer does so you can adequately repair or disclose them. These checks may seem minor, but buyers often assume they will find more expenses along the way which can lessen their confidence in their purchase. Ask your Realtor to refer you to a professional if these repairs are significant enough to warrant immediate repair.
If your home is still on the market but you have vacated the premises and moved into your new Home, you will still need to maintain utilities at both Properties. Just because there is no one currently living in your old home that is for sale, it does not mean it won't still need electricity and running water. If people are still coming through the home on Showing Appointments they need to be able to turn on the lights and use the restroom. If selling the home during the winter, the heat will need to be kept on low to keep pipes from freezing; if on the market during the heat of summer, the air conditioning will be in use during Showings. Because the home is still in your name, you are responsible to continue paying the utility bill until the keys are handed over to the Buyers on their Possession Date.
In most cases, Buyers pay for a home inspection before Closing on a house to ensure it has no major problems latent to the layperson. Although it’s not necessary, some Sellers pay for their own pre-inspection report to err on the side of caution and provide a glimpse into what the Buyer's inspection will find. If you’ve lived in your home for many years, a pre-inspection can find things under the surface that you were completely oblivious to, like termites, water damage or major pest damage. In some cases, it’s better to fix these things before they could potentially deter buyers from moving forward in the buying process after completing their own inspection once in Contract.
According to the National Association of Realtors®, 4 out of 10 buyers start home-shopping by looking at pictures online. Just like fashion, window shopping is the best way to get an idea of what is out there on the market. To make sure your home looks the most appealing online, having photographs taken by a professional could make a huge difference in how long your home sits on the market! Some real estate agents offer this service, or have a reputable contact to which they can refer their clients. While getting your Home photographed by a professional photographer is not necessary, it may be worth it in the end. You have limited time to catch that Buyer's attention while they scroll through properties on Zillow during their work break.
Closing Costs and Commission
One of the biggest expenses to prepare for when selling your home are the closing costs and commission to your Real Estate Agent. While it can vary, sellers owe 6% of their home’s purchasing price to their Brokerage as commission. Closing costs can typically consist of 2% of the purchasing price, and cover anything from mortgage processing fees, escrow fees, property taxes and notary or Recording fees. You should also expect to pay whatever balance is remaining on any outstanding mortgage notes, and any outstanding property taxes. All of these expenses will show on the Settlement Statement which you'll receive prior to Closing. Some Sellers will opt to hire a real estate Attorney to help them shop around for the best Closing rates.
Capital Gains Taxes
While it’s a good thing to have your home highly increase in value from the time you bought it, don’t be surprised if you are faced with a bill for Capital Gains Taxes. The tax is calculated by the difference between your home’s original purchase price and your final selling price, minus the cost of any major home improvements or additional costs. While these taxes sound overwhelming, there are ways to make your real estate transaction exempt. For married couples selling their home, they can potentially be exempt up to $500,000 on taxes; and sellers who are single can oftentimes cut off $250,000. Remember, these numbers depend on each seller’s specific financial situation, so it’s advised to consult with your Accountant to get an accurate tax estimate.
A successful transaction starts with reasonable expectations for both Seller & Buyer -- understanding the final cost of one of your largest transactions in your life will help alleviate any surprises at the Closing table. Contact us at Hart Property Advisors today to help you navigate the Sale of your Property and provide more information, tips & tricks!