Important Considerations When Selling Your Home
There is a lot more to selling your home than staging, open houses, and contract negotiations. Much of getting ready to sell your home has to do with how you want (or need) to sell your home. But for some home sellers, that is an afterthought. Here are some important considerations when selling your home.
Understand any tax exposure from selling your home. It is wise to consult with a tax professional before deciding to sell your home, especially if you have had a change in ownership or title. Review whether you meet the homeowner’s tax exemption criteria and assess any potential tax liability from the sale. This can also help you set a sales price so that you minimize your tax exposure.
Know your current mortgage debt and closing costs. Any loan debt payoff will need to be subtracted from your sales price. There will also be other closing costs associated with selling your home, so knowing what you owe and what you wish to net will help guide your negotiations during the sale. Ask your real estate agent to provide you with a net sheet to avoid any big surprises.
Decide how you want to time your sale (and purchase). This is an important consideration that may be the difference of getting your offer accepted or receiving multiple offers. If selling and buying a home simultaneously, one option is to make one or both sales contingent upon the other. However, that can get complicated, especially since there are at least two other parties involved.
Another option for selling is negotiating a rent-back to the seller after escrow closes for a specified amount of time. This can help ease the pressure of purchasing a replacement home and give the seller more time to move, but not all buyers are in a position to rent-back.
If you aren’t in a hurry to sell your home, then time is on your side and you are in a better bargaining position. However, don’t hold out for too long, or you run the risk of buyers losing interest (which usually means lower offers). Conversely, if you need to sell quickly, there are usually cash buyers ready and waiting to buy your home at a discount if you need cash in hand and can afford to sell for less.
Understand the conditions of the current real estate market. Things like housing inventory, availability of financing, interest rates, and affordability will play key roles in how you sell your home. Work with a real estate agent who can look at real estate market trends and indicators such as days on market, recent sales, and inventory in your neighborhood to help you create a price and plan to market your home to the ideal buyer. Also, know what terms of the sales are most important to you so you know where you have room to negotiate. Ultimately, your agent works for you, so make sure you feel well represented. And remember, it’s a negotiation and willingness to be flexible when needed will make for a much more pleasant home selling experience.