There are many reasons why people decide to move and sell their homes. For instance, you might have a bigger family now, and your current home doesn’t fit you anymore. It might also because of the constant changes in the neighborhood, and you don’t feel comfortable living in the area. Some also move houses because of new opportunities, especially new career openings. If you’re thinking of selling your home, it’s best to prepare a selling plan and create effective strategies to help you sell your house with a good value. Here are the 5 Things To Know When Selling Your House.
Here are the top essential pieces of information you need to know to help prepare your home for the market:
Ready The Documents
Gather all the documents you need to sell your home. Having the documents prepared will help you answer inquiries clearly. You’ll need the necessary documents that your potential buyers, attorney, and real estate agent might request in the future.
Here’s a list of the vital documents you shouldn’t miss before listing your home in the market:
- Original Sales Contract
- Home Repair And Maintenance Records
- Mortgage Statement
- Homeowners Insurance Records
- Past Utility Bills
- Manuals And Warranties
- Homeowners Association Documents
- Receipt For Capital Improvements
- Property Tax Information
- Title Report
- Lease Agreement
It’s essential to prepare the paperwork as early as you can to ensure that your deals will go smoothly. The documents needed can be complicated, and you can seek help from your trusted attorney and real estate agent to check if you miss out on any paperwork. It’s best to check your state what documents they require because every state has different home sale paperwork conditions.
Learn The Current Tax Laws
You need to understand the implications of capital gains tax when selling a home. Capital gains are based on the house’s selling price after you reduce your property’s selling costs, closing expenses, and tax basis. The basic math of a capital gains tax is subtracting the purchase price from the selling price. The price you’ll get afterward is your capital gain.
There are exemptions, of course, to owing taxes on profits. If you’ve originally owned the home and lived in it for at least two to five years before deciding to sell it, you don’t have to pay taxes for selling profits that don’t exceed USD$250,000. If you’re a married couple wanting to sell a house, the range of taxes you can exclude raises up to USD$500,000.
If your profit exceeds both conditions, you’ll have to report to the IRS regarding your tax returns.
Know Your House’s Worth
Before you list your home in the market, make sure to evaluate your home’s current selling value. You can check nearby comparable properties for sale to see the current price range on the market and set a price based on what you see will sell best.
You might be tempted to sell your house at a high price, especially if you’re in a hurry, but it will be challenging to find a buyer who’ll instantly agree to your price without seeing its condition.
If you go for an overpriced route, your house might actually get fewer potential buyers and will be left hanging in the market for an extended time. Some buyers will be wary of choosing your home if it’s in the market for too long as it may make them think that something’s wrong with the house. Remember to set a reasonable price that will attract buyers to checking out your house to avoid this issue.
Estimate Potential Gain
Keep in mind that your initial profit from your sale will not be completely yours. Before setting a price and listing your home, you should estimate your final earning by reducing the following:
- Title Charges
- Real Estate Sales Commissions
- Closing Fees
- Transfer Charges
- Settlement Charges
- Debt Obligations
- Home Repairs
- Staging Expenses
Once you reduce the estimated extra expenses, you’ll see whether you can gain a reasonable profit or not. You can avoid the hurtful money loss if you prepare for all the expenses and work your selling price around it.
Decide How To Sell The House
Once you know your home’s worth and pricing, you now have to decide how you want to sell your home. You can either sell it with the help of a real estate agent, sell for cash, or take the for sale by owner (FSBO) route.
Here’s a quick guide to help you decide what’s the best option for you:
- Hire A Real Estate Agent
Selling a house can be extensive and stressful. If you want extra help from someone who knows how the market works, hiring a real estate agent is the way to go. A reliable agent can analyze the local market to give your home a reasonable price. They can also help prepare your home for any repairs, decluttering, and staging that can raise the value of your house.
If you want your house to look appealing to buyers, real estate agents can also hire professional photographers. Most importantly, real estate agents can handle confusing paperwork that can often overwhelm homeowners.
- Sell Your Home For Cash
You can also opt to sell your home for cash if you want to get the most income. It’s also the best option if you want to sell your home fast. By selling your home to a cash buyer, you can close deals from days to weeks. You can skip the preparations, repairs, and staging when you sell it for cash, even though there’s a price cut compared to preparing the home entirely for sale.
- For Sale By Owner (FSBO)
If you choose an FSBO route, it means that you’re cutting off the real estate agent from the process and handling everything by yourself. You’ll be responsible for handling the paperwork, deciding a selling price, making repairs, staging the homes, and dealing with the buyers. It’s a complicated process, and you should only make an FSBO sale if you already have buyers in mind or if you’re in an extremely low inventory seller’s market.
If you’re certain that you want to sell your home, it’s crucial to prepare yourself for the lengthy selling process and review all your options before closing a deal. By studying the information listed above, you can prevent any major selling issues and have a seamless transaction with your potential buyers.