Four Things You Need to Do Before Listing Your House

If you're eager to sell your home and buy a new one, you might rush to put your house on the market. However, you should take a step back and really assess the situation. If there's a lot of competition in your local market, your property can sit for several months with little interest. This can be frustrating and discouraging. For that matter, don't rush. Here are four things you need to do before listing your house for sale.

1. How much do I owe?

Emotions may persuade you to sell your house quickly. Maybe you’re expanding your family and need a bigger home. Regardless of the situation, you need to crunch the numbers and determine whether now’s the right time to sell. Take into consideration how much you owe the mortgage lender. Visit your lender’s website or call the bank to get a payoff amount. Once you have this information, determine how much you’ll need to sell the property for. A real estate agent typically requires a 6% commission, and if proceeds from the sale will go toward the down payment on the next property, decide how much you’ll need to profit from the sale. For example, if you owe the bank $140,000, and realtors charge six percent commission, and you need a $7,000 down payment to purchase a new property, given these numbers you’ll need to sell for at least $155,400. The next question is: can you sale for this amount? You may think you can get a certain price for your home, but the local market ultimately determines the value of the house. A realtor can provide comparable sales and statistics to help you understand what similar homes have sold for in recent months, or you can hire an appraiser to assess your home’s value.

2. Realtor vs. For Sale By Owner

Most home sellers prefer using a real estate agent to handle the transaction. The realtor is responsible for listing the house, marketing the property, arranging showings, plus they can help with paperwork and answer questions. However, after completing market research and getting an appraisal, you may decide that you can't afford a six percent commission, and selling the home yourself might be the only alternative. You don't need a realtor to sell your house, just make sure you know what you're getting into before handling the sale yourself. You’re responsible for the marketing and the meetings with potential buyers.

3. Get pre-approved

Before listing your house for sale, get pre-approved for a new mortgage. The truth of the matter is, there's no point in selling your house if you don't qualify to buy a new one. A pre-approval is a simple process that takes less than a week. Basically, you complete a mortgage application, submit your income information and the lender pulls your credit. Based on this information, the bank determines if you qualify for a mortgage, and how much you’re eligible for receive.

4. Tour other homes for sale

Because many homebuyers seek move-in ready properties that require minimum improvements, you’ll need to compare your home with other houses on the market. You don't have to invest a ton of money in total renovations, just know that the more modern the space, the easier it'll be to sell. Visit similar homes for sale in your area to assess the competition. If your sale prices are comparable, but these homes are staged, updated and in better condition than your property, your home might not sell as quickly. To make your property more appealing to buyers, de-personalize the space so that potential buyers can envision their family living in the home. Choose neutral colors for the wall and replace worn items, such as the carpet, appliances, fixtures, tile floors and windows. Most buyers aren’t looking for perfection, but at the same time, many aren’t going to purchase a home that requires thousands of dollars in improvements — unless the price is low enough.

Final Word

Home selling is a competitive game, especially when there are many homes on the market. However, if you do preliminary work and research the market, and if you know what buyers want, you can sell faster and move into a new place sooner.