In my most recent column, I said it usually takes a lot more than putting a “for sale” sign in the front yard to obtain a buyer willing to pay a fair price for your home.
I went on to list eight time-tested tips designed to prepare your home for the current selling season.
But a number of you responded with good additional ideas.
One reader suggested that getting the house ready before talking to an agent was putting the cart before the horse. In retrospect, I agree.
So here are two preliminary steps that logically should precede other efforts if you are thinking of selling this spring or summer.
1. Before you do anything else, it’s probably a good idea to contact an experienced local real estate professional. Tell them you are thinking about putting your home on the market, and wanted to seek their advice on pricing and preparation.
Specifically, you want a written “competitive market analysis” of your home. Often called a CMA, this report will detail the relevant features of your home, then compare those to the same features of homes that have sold recently in your neighborhood.
This data will reveal a likely selling price based on facts, not wants or needs.
Yes, you can probably find most of the same raw data somewhere on the Internet, but that’s not what you want. Instead, you are after the insight and experience the agent will bring to the table.
In addition, I recommend that you ask for a written marketing plan, detailing how this particular agent plans to tell the world that your home is for sale. As I said, it’s not enough to simply put a sign in the front yard.
As part of this process, the agent will want to visit and examine your home, giving you specific suggestions on areas of your home that may need attention prior to marketing.
In reality, I want you to contact three different agents with three different companies, so you get a full spectrum of information and ideas.
The reason that this step should precede all others is simple. This research may reveal that you owe more on your house than it can reasonably be expected to yield in a proposed sale. And seeking anything other than a “realistic” sale price is a waste of your time and effort.
2. After you have researched a likely selling price, you are in a much better position to estimate the net amount you may receive from a sale. And with that information in hand, you are now ready to visit with your local mortgage lender.
The reason that this should be your second step is also simple.
Getting pre-qualified by a lender now and knowing how much cash you will have available for your next purchase will reveal two critical details: whether or not you can expect to be approved for a loan on your next home, and in what price range you will be shopping.
During the past five years, many Americans have seen their credit damaged or ruined, and could not qualify for any kind of replacement loan, at least at this time.
Additionally, knowing now what price range limitations you have may reveal that you can’t afford what you want to replace your current home, and that you are actually better off waiting until a more favorable time to move.
These two preliminary steps are appropriate for anyone thinking of selling their current residence and replacing it with another. Here’s why:
Most of the eight steps from my last column involve spending money or at least investing your time in a project. In contrast, both the competitive market analysis and the loan pre-qualification are free. The agent and the lender are willing to undertake this research because they hope that you will choose to do business with them when the time comes.
And knowing both your target price range for a replacement home and the likelihood of the needed loan approval in advance will give you the confidence to undertake the selling steps we covered in my recent column.
In case you missed the "Eight Steps" from my last column, I have reproduced an expanded version on my website at Money99.com.
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