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Get estimates
from a reliable repairperson on items that need
to be replaced soon, such as a roof or worn
carpeting, for example. In this way, buyers will
have a better sense of how much these needed
repairs will affect their costs.
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Have a
termite inspection to prove to buyers that the
property is not infested.
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Get a
pre-sale home inspection so you’ll be able to
make repairs before buyers become concerned and
cancel a contract.
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Gather
together warranties and guarantees on the
furnace, appliances, and other items that will
remain with the house.
-
Fill out a
disclosure form provided by your sales
associate. Take the time to be sure that you
don’t forget problems, however minor, that might
create liability for you after the sale.
10 Ways to Make Your House More Salable
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Get rid of
clutter. Throw out or file stacks of newspapers
and magazines. Pack away most of your small
decorative items. Store out-of-season clothing
to make closets seem roomier. Clean out the
garage.
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Wash your
windows and screens to let more light into the
interior.
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Keep
everything extra clean. Wash fingerprints from
light switch plates. Mop and wax floors. Clean
the stove and refrigerator. A clean house makes
a better first impression and convinces buyers
that the home has been well cared for.
-
Get rid of
smells. Clean carpeting and drapes to eliminate
cooking odors, smoke, and pet smells. Open the
windows.
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Put higher
wattage bulbs in light sockets to make rooms
seem brighter, especially basements and other
dark rooms. Replace any burnt-out bulbs.
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Make minor
repairs that can create a bad impression. Small
problems, such as sticky doors, torn screens,
cracked caulking, or a dripping faucet, may seem
trivial, but they’ll give buyers the impression
that the house isn’t well maintained.
-
Tidy your
yard. Cut the grass, rake the leaves, trim the
bushes, and edge the walks. Put a pot or two of
bright flowers near the entryway.
-
Patch holes
in your driveway and reapply sealant, if
applicable.
-
Clean your
gutters.
-
Polish your
front doorknob and door numbers.
7 Steps to Preparing for an Open House
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Hire a
cleaning service. A spotlessly clean home is
essential; dirt will turn off a prospect faster
than anything.
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Mow your
lawn, and be sure toys and yard equipment are
put away.
-
Serve
cookies, coffee, and soft drinks. It creates a
welcoming touch. But be sure the kitchen has
been cleaned up; use disposable cups so the sink
doesn’t fill up.
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Lock up your
valuables, jewelry, and money. Although the real
estate salesperson will be on site during the
open house, it’s impossible to watch everyone
all the time.
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Turn on all
the lights. Even in the daytime, incandescent
lights add sparkle.
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Send your
pets to a neighbor or take them outside. If
that’s not possible, crate them or confine them
to one room (a basement or bath), and let the
salesperson know where to find them.
-
Leave. It’s
awkward for prospective buyers to look in your
closets and express their opinions of your home
with you there.
20
Low-Cost Ways to Spruce Up Your Home
Make your home
more appealing for potential buyers with these quick
and easy tips.
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Trim bushes so they don’t block windows and cut
down on light.
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Buy
a new doormat.
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Put
a pot of bright flowers (or a small evergreen in
winter) on your porch.
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Put
new doorknobs on your doors.
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Put
a fresh coating on your driveway.
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Edge the grass around walks and trees.
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Keep your garden tools out of site.
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Be
sure kids put away their toys.
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Buy
a new mailbox.
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Upgrade the outside lighting.
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Use
warm, incandescent light bulbs for a homey feel.
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Polish or replace your house numbers.
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Clean your gutters.
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Put
out potpourri or burn scented candles.
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Buy
new pillows for the sofa.
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Buy
a flowering plant and put it in a window you
pass by frequently.
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Make a centerpiece for your table with fruit or
artificial flowers.
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Replace heavy curtains with sheer ones that let
in more light.
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Buy
new towels.
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Put
a seasonal wreath on your door.
What Is
Appraised Value?
It’s an
objective opinion of value, but it’s not an exact
science so appraisals may differ.
For buying and
selling purposes, appraisals are usually based on
market value—what the property could probably be
sold for. Other types of value include insurance
value, replacement value, and assessed value for
property tax purposes.
Appraised value
is not a constant number. Changes in market
conditions can dramatically alter appraised value.
Appraised value
doesn’t consider special considerations, like the
need to sell rapidly.
Lenders usually
use either the appraised value or the sale price,
whichever is less, to determine the amount of the
mortgage they will offer.
Used with
permission from Kim Daugherty, Real Estate
Checklists and Systems (http://www.realestatechecklists.com).
Understanding Capital Gains in Real Estate
When you sell a stock,
you owe taxes on your gain—the difference between
what you paid for the stock and what you sold it
for. The same is true with selling a home (or a
second home), but there are some special
considerations.
How to Calculate
Gain
In real estate,
capital gains are based not on what you paid for the
home, but on its adjusted cost basis. To calculate
this:
1. Take the
purchase price of the home: This is the sale price,
not the amount of money you actually contributed at
closing.
2. Add
adjustments:
•
Cost of the purchase—including transfer fees,
attorney fees, inspections, but not points you paid
on your mortgage.
•
Cost of sale—including inspections, attorney’s fee,
real estate commission, and money you spent to fix
up your home just prior to sale.
•
Cost of improvements—including room additions, deck,
etc. Note here that improvements do not include
repairing or replacing something already there, such
as putting on a new roof or buying a new furnace.
3. The total of this is the adjusted cost basis of
your home.
4. Subtract this
adjusted cost basis from the amount you sell your
home for. This is your capital gain.
A Special Real
Estate Exemption for Capital Gains
Since 1997, up
to $250,000 in capital gains ($500,000 for a married
couple) on the sale of a home is exempt from
taxation if you meet the following criteria:
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You have
lived in the home as your principal residence
for two out of the last five years.
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You have not
sold or exchanged another home during the two
years preceding the sale.
Also note that
as of 2003, you also may qualify for this exemption
if you meet what the IRS calls “unforeseen
circumstances,” such as job loss, divorce, or family
medical emergency.
Remodeling That Pays
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Upgrading
your home is always appealing, but which
enhancements really get you a good return for
your money when it’s time to sell? The 2003 Cost
vs. Value Report by Remodeling magazine
and REALTOR Magazine has the answer.
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To see the
complete article, visit
http://www.realtor.org/rmomag.NSF/pages/
costvaluedec03.
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2003 |
2002 |
Variance |
|
Bathroom Remodel
|
|
Midrange |
89.3% |
87.5% |
1.8% |
|
Upscale |
92.6 |
91.0 |
1.6 |
|
Bathroom Addition |
|
Midrange |
95.0 |
94.2 |
0.08 |
|
Upscale |
84.3 |
81.4 |
2.9 |
|
Major Kitchen Remodel |
|
Midrange |
74.9 |
66.6 |
8.3 |
|
Upscale |
79.6 |
79.8 |
-0.2 |
|
Master Suite |
|
Midrange |
76.4 |
75.1 |
1.3 |
|
Upscale |
76.9 |
76.8 |
0.1 |
|
Family Room |
|
Midrange |
80.6 |
79.5 |
1.1 |
|
Deck |
|
Midrange |
104.2 |
N/A* |
N/A* |
|
Basement Remodel |
|
Midrange |
79.3 |
78.7 |
0.6 |
|
Siding Replacement |
|
Midrange |
98.1 |
79.1 |
19.0 |
|
Window Replacement |
|
Midrange |
84.8 |
73.8 |
11 |
|
Upscale |
87.0 |
77.0 |
10 |
|
Attic Bedroom |
|
Midrange |
92.8 |
N/A* |
N/A* |
7 Terms to Watch for in a Purchase Contract
1. The
closing date.
See if the date the buyer wants to take title is
reasonable for you.
2.
Date
of possession.
See if the date the buyer wants to move in is
reasonable for you.
3.
The
earnest money.
Look for the largest earnest-money deposit possible;
since it is forfeited if the buyer backs out, a
large deposit is usually a good indication of a
sincere buyer.
4.
Fixtures and personal property.
Check the list of items that the buyer expects to
remain with the property and be sure it’s
acceptable.
5.
Repairs.
Determine what the requested repairs will cost and
whether you’re willing to do the work or would
rather lower the price by that amount.
6.
Contingencies.
See what other factors the buyer wants met before
the contract is final—inspections, selling a home,
obtaining a mortgage, review of the contract by an
attorney. Set time limits on contingencies so that
they won’t drag on and keep your sale from becoming
final.
7.
The
contract expiration date.
See how long you have to make a decision on the
offer.
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