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After You Sell
Preparing to Sell
Timing Your Sale, Handling Presale Preparation, Key Exterior Improvements, Key Interior Improvements, Pre-Marketing Property Inspections, Staging a House
Timing Your Sale
While the overall health of the market has the greatest impact on your sale, the date you put it on the market can also be important. The real estate marketing calendar generally has two distinct peaks and valleys created by ebbs and flows of activity in your local real estate market. You can use the predictability of these cycles to your advantage.
Depending on where you live, the longer and stronger of the two annual peak seasons begins somewhere between January and March. Markets in cold weather climates may take a little longer to get started.
February through May is normally the most active selling time for residential real estate. Families with children want to get their purchase or sale out of the way by late spring so moving won't disrupt the kids' schooling for the next academic year. Other people buy or sell early in the year for tax purposes, or to avoid interference with their summer vacation.
The first peak season is usually the best time to put your house on the market. High sale prices can result from spirited buyer competition during this time of year.
In some markets, Memorial Day tends to mark the beginning of the first valley. Sales activity usually slows during June, July, and August. Buyers, sellers, and agents often take summer vacations, which reduces the market activity. Many folks spend their weekends having fun in the sun rather than looking at houses.
This season is still a good time to put your property on the market.. Houses might take somewhat longer to sell in the summer due to a slightly lower level of buyer activity, but again, it depends largely on the conditions of the local housing market.
Labor Day usually starts the second peak season. This peak normally rolls through September, October, and into November. People who sell during late autumn tend to be strongly motivated.
Some of these buyers are calendar-year taxpayers who sold houses earlier in the year and want to buy their new home before December 31st so they can pay tax-deductible expenses (such as the loan origination fee, mortgage interest, and property taxes) prior to the end of the year to reduce the impact of federal and state income tax.
The second peak season usually slows again a week or so before Thanksgiving. The exception to this are those few determined sellers and bargain-hunting or relocating buyers who stay in the market until the end of December.
One thing that many sellers do not realize is that November and December actually have the best exposure ratio of any other months of the year. It's true that February and March produce the highest amount of home sales, but when you compare the percentage of sales to the total number of new properties that come onto the market, November and December prove to be extremely good months to sell your home.
A large part of what contributes to this high rate of exposure is that there are fewer homes listed during November and December, resulting in fewer "new on the market" properties. In other words, there is not as much competition for sales, so homes have the potential to receive much more exposure than it would during the spring and summer months when there are significantly more homes on the market.
Handling Presale Preparation
When selling your home, it's important to make the psychological shift from the "home" you love so dearly into the "house" you are trying to sell. This shift, in layman's terms, is part of letting go and is the emotional detachment process all sellers experience sooner or later. Home is where your heart is. Houses, like TV sets, toasters, and tangerines, are commodities sold on the open market. You're getting ready to sell a house.
Getting your house ready to put on the market takes time. If you make the right improvements when fixing up your property, you increase the odds of selling it more quickly.
Start the presale fix-up process by getting an outside opinion of your house's strengths and weaknesses. Real estate agents are an excellent, objective source of advice about readying your house for sale. Because agents see your house with fresh eyes, they can spot flaws you no longer notice. Furthermore, agents look at your house the way buyers do. They know how to prepare houses so that they're appealing for marketing -- a process sometimes referred to as staging.
Common Presale Pitfalls
Suppose that your house needs a new roof, kitchen remodeling, or bathroom upgrades. What's the best way to handle major expenses like these?
You shouldn't spend big dollars on major improvements. For example, you probably shouldn't install a new roof just before putting your house on the market. A wiser plan is to give buyers a credit to cover the repair cost. Prepare for negotiations regarding the credit by getting several competitive bids for the corrective work from reputable local contractors, and then base your credit on the lowest realistic bid.
Why offer to give the buyer a credit? For one thing, you can avoid a huge out-of-pocket expense by handling the repairs this way. Furthermore, this arrangement allows the new owners to have the work done by their own contractor whenever they want after the sale is completed. Last, but not least, if the buyers have problems with their new roof after the sale, the repair isn't your responsibility because you aren't liable for their contractor's work.
Nor should you make major remodeling changes to a kitchen or bathroom. You generally can't increase your sale price enough to fully compensate you for all the work and money you put into the project. Furthermore, you can't second-guess the next owner's preferences in toilets, tile, and tubs.
A much better plan is to reduce your asking price so it reflects that your house has an old kitchen or bathroom instead of spending your time and money on a major remodeling job.
Key Exterior Improvements
Most buyers will make quick judgments about your house, and buyers begin forming their opinion of your house long before they go inside. Curb appeal, the external attractiveness of your property when viewed from the street, is critically important. Here are some reliable ways to enhance your house's curb appeal:
- Painting: Painting your house's exterior before you put it on the market gives the biggest bang for your fix-up buck. White, light grays or soft tans are safe choices for exterior walls. If your house doesn't need a new paint job, at least touch up window frames, front shutters, gutters and down spouts. Also, be sure to give your mailbox and front door a fresh coat of paint.
- Lawn: A freshly mowed, neatly trimmed lawn gives your house a well-maintained appearance. Make sure toys, lawn equipment and garden hoses aren't scattered around the yard. You can also make your grass look extra lush and green by fertilizing it.
- Sidewalks: Sweep your sidewalks daily. Keep them free of snow and ice in the winter.
- Shrubbery: Remove or replace any dead or dying trees, hedges, or shrubs and prune anything that looks unkempt or overgrown. Cut back overgrown shrubs that block windows and keep light from entering your house.
- Flowers: Filling flower beds with seasonal flowers is an inexpensive way to add color and charm to a property.
- Repairs: Be sure that all gutters and down-spouts are in place and clean. Replace missing roof shingles and broken or cracked windows. Repair cracks in your driveway and remove large oil stains. Replace or repair broken stairs, torn window screens, broken or missing fence slats, and defective doorknobs. Make sure that your front and back doors, garage doors, and all windows open easily. Check exterior lights to be certain that they're working properly.
- Windows: Keep your windows spotless inside and out throughout your home. When you're not home, curious buyers attracted by the For Sale sign have been know to peek through the windows to size up your house.
- Eliminate or hide clutter: Clear everything you don't need out of the garage. Friends and family who live nearby can be a great source of temporary places to store excess items. If you can't clean your garage out, at least keep the door closed. Try to keep the number of cars, trucks, boats, and campers parked in front of your house to a minimal.
If you can afford it, make your life easier by hiring a professional to help you with these chores. Your real estate agent can probably refer you to people who specialize in this kind of work.
Key Interior Improvements
Curb appeal draws buyers into your house. But appealing interiors make the sale. The little things you do generally give the biggest increase in value. Concentrate on the three Cs -- clean up, clear out, and cosmetic improvements.
Use fabric -- area rugs, table cloths, napkins, sofa cushions, window curtains or drapes, bedspreads and quilts, bath and hand towels, shower curtains, and so on -- to create temporary color accents in rooms. Unlike other more permanent improvements, you can take these items with you for use in your next home. You can also use flower arrangements to add bright splashes of color to rooms.
- Clean, scrub, and polish: Your stove, oven, refrigerator, microwave oven, and other appliances must be spotlessly clean inside and out. Scour walls, floors, bathtubs, showers, and sinks until they sparkle. Don't forget to clean the ventilating hood in your kitchen.
- Eliminate odors: Buyers will notice strong smells as soon as they walk through your front door, so eliminate smoke, mildew, and pet odors. Cleaning drapes and carpets helps get rid of odors. Remove ashes from the fireplace. Use air fresheners or citrus-scented potpourri to keep your house odor free. Whether you do the work or hire someone, make sure that your house is spotless.
- Fix drippy faucets: If any of your sinks or bathtubs drain slowly, unclog them. Just as car buyers love to kick tires, some property buyers test houses by flushing toilets and running water in sinks and bathtubs to check drains.
- Get rid of clutter: Eliminating clutter and excess furniture makes rooms appear larger. Store, sell, or give away surplus or bulky furniture. Closet space sells houses too. Clean and organize closets, bookcases, and drawers.
- Profit from your clutter: Ironically, the clutter that reduces your house's value is far from worthless. On the contrary, your clutter is someone else's treasure. Make a donation to your favorite charity and earn a tax deduction (be sure to ask for a donation receipt). Or, have a garage sale.
- Make cosmetic improvements: Painting isn't expensive if you do it yourself, but be careful when selecting interior colors. In most cases you should try to avoid bright, bold colors with strong visual impact. You may love the effect, but you aren't the buyer. It's smart to stick to conventional whites, soft pastels, and other neutral colors. If your basement is dark and gloomy, paint the walls and ceiling a light color and put the highest wattage light bulbs you can safely use in your light fixtures to brighten the space up. Repair cracks in the floor.
Pre-Marketing Property Inspections
Prudent purchasers will have your property thoroughly inspected before they buy it. Expect inspectors to poke into everything -- your house's roof, chimney, gutters, plumbing, electrical wiring, heating and cooling systems, insulation, smoke detectors, all the permanent appliances and fixtures in your kitchen and bathrooms, and the foundation. They'll also check for health, safety, and environmental hazards.
Exploring the advantages of inspecting before marketing
The best defense is a good offense. Get your inspections before your buyer gets theirs. This will help you identify anything that might be wrong with your house before putting it on the market. Defusing a crisis begins by discovering that a problem exists. Consider these four reasons to have your property thoroughly inspected before putting it on the market:
- Be aware: Suppose that your house needs a new foundation. The problem is there whether you know about it or not. Why wait for an ultimatum to fix the foundation at a cost established by the buyer's inspection? If you discover the problem before marketing the house, you can disclose it to prospective buyers with a repair estimate. Your negotiating position is much stronger if you know about problems in advance -- and accurately know the cost to correct them. Concentrate on buyers who are willing to do corrective work after the closing if your price and terms are fair.
- Financial planning: It's very important to have a realistic estimate of your present house's net proceeds of sale before committing to buy a new home. If your house needs major repairs, you'll pay for them one way or another -- either by doing the repairs yourself, by reducing your asking price to reflect the cost of repairs, or by giving buyers a credit to do the work. A good pre-marketing inspection can reveal all these problems will review latent defects -- flaws hidden out of sight behind walls or concealed in inaccessible areas, such as under your house or up in the attic where you can't see them.
- Fine tuning: Professional property inspectors can help you spot minor defects, such as dirty filters in the heating system; ventilation problems in the basement, garage, or crawl space; blocked gutters; loose doorknobs; stuck windows; a missing chimney hood or spark arrester, and so on. Eliminating small maintenance problems like these gives prospective buyers who tour the property a favorable -- and correct -- impression that your house is extremely well-maintained.
- Peace of mind: The inspector alerts you to health and safety precautions you should take. Installing smoke detectors, grounding electrical outlets, and keeping flammable products away from furnaces, heaters, and fireplaces, for example, make your house safer for the next owner and safer for you as long as you continue living in it.
Staging a House
If you've ever visited a new home development and walked through the builder's model home, you know exactly what staging is. Builders usually do extremely elaborate staging jobs.
Staging finishes the process you started with the three Cs (clean up, clear out, and cosmetic improvements). Here are some staging tips that you can use to increase your home's appeal:
- Kitchen: Aromas from fragrant goodies like freshly baked cookies or just-brewed coffee are appealing to most people.
- Bathrooms: Always have fresh towels in bathrooms. Buy new shower curtains; and put new soap in the soap dishes.
- Collections: Everyone has collections -- family photos on the wall, autographed baseballs, dolls, trophies the kids won in school, whatever. Put away your collections so people focus on the task at hand -- buying your house.
- Refrigerator: Clear everything off your refrigerator. Most folks use magnets or tape to stick everything from vacation snapshots and finger-painting masterpieces to notes for the kids and "to do" lists on the surface of their refrigerator.
- Comfort: Keep your house warm in the winter and cool in the summer. A house that's too hot or too cold isn't inviting.
- Fireplace: Functioning fireplaces are utilitarian (another heat source) and romantic (candlelit dinners by the fire). If you have a fireplace, spotlight it. Polish your fireplace tools. Pile logs neatly in the fireplace. When your house is shown on cold fall or winter days, nothing says "Welcome" like the warmth, glow, crackle, and smell of a blazing fire.
- Flowers: Vases of colorful, fresh flowers spotted throughout the house make a wonderful impression on prospective buyers. Bouquets of carnations, daisies, tulips, or other seasonal flowers from your local supermarket are great.
- Furniture: Rearrange furniture to create a warm, inviting feeling.
- Light: Bright, well-lit houses seem more spacious and cheerful. During the day, open all your curtains and drapes. If the view is unappealing, get sheer window coverings that let light through, but mask the view. When you show your house, brighten up rooms by turning on all your lamps, even during the day. Be sure hallways and stairways are brightly lit. Don't forget to turn on closet lights, oven lights, and the lights over your stove and kitchen counter.
Prospective buyers often drop in or drive by in the evening to see how your house looks at night. Interior lights that can be seen from the street make a house look cozy and inviting. From sunset until you go to bed, keep at least one light on in each room that faces the street.