Make high-return improvements to your home before
you sell.
There are a number of improvements that you can make to your house
that will provide a greater-than-100% return on your initial investment.
Chief among these is having your house painted, but you should also
consider kitchen and bathroom renovations, adding fireplaces and
skylights, and attic or basement conversions. Contrary to popular belief,
building a swimming pool is not a good capital investment, and will
usually only add 33% of its cost to your home's final sale price.
Don't buy your new home until you have sold your
current home.
This is generally sound advice unless you live in an extremely hot
market and your Realtor is sure you'll be able to sell your home quickly.
Timing is crucial, so start working with your agent to find a new home as
soon as yours is listed. With a little bit of luck, the day you accept an
offer on your home, you'll be able to make an offer on a new home and
close both deals on the same day. At worst, you may have to live in a
rental for a couple of months, but most people agree that moving twice is
preferable to being stuck with two mortgage payments!
Why use a realtor?
Some homeowners think that selling their own home will save money and
give them an advantage over the Realtor-using majority. Before you start
down this complicated path, here are a few reasons why using a real estate
professional is important:
1) You will be drastically limiting your exposure to potential buyers,
which means it can take between 10 and 15 times longer to sell your home.
Houses that take a long time to sell usually sell for less because buyers
believe there must be something wrong with them.
2) Most buyers find negotiating with sellers extremely awkward, and
therefore avoid For Sale By Owner situations.
3) Most buyers use a Realtor in their home search, and most buyers'
agents will typically not work with FSBOs because they will not be paid.
This means you will have to offer a selling commission to attract buyer's
agents, which will cut into your expected "savings."
4) Lack of negotiating experience can result in a lower selling price,
or worse, a bungled contract and possible lawsuits. It is probably unwise
to pit your negotiating skills against those of experienced professionals.
5) If you plan to use a lawyer to help you negotiate, your lawyer's
fees could be considerably higher than a Realtor's commission. Unlike
Realtors, lawyers do not get paid for proactively representing your best
interests or mediating delicate situations.
6) You only pay a commission to your Realtor if they successfully sell
your home at a price you are happy with.
