Understanding Appreciation

Deciding to Sell - Prepare to Sell - Set a Price - Accept an Offer - Close the Sale - Prepare to Move

Timing
Consider the timing of your sale relative to the market and to your home equity. A slow market may negatively affect your sale. And if your equity is low, you could end up bringing cash to the closing to pay off your lender. The more equity you have in your home, the better equipped you are to cover your sales costs.

Tax consequences
Though capital gains tax laws have relaxed to the point where most Americans don't have to pay tax on real estate profits, you will likely have to pay if you've lived in your home only a short time. Make sure you know where you stand.

Financial impact
It can costs thousands of dollars to sell a property. The less equity you have in the house, the greater the financial hit. It pays to run the numbers before you sell.

Deal with disclosures. Most states now require sellers and their agents to disclose any issues that may affect a buyer's decision to purchase your home. Make sure you understand what you need to disclose and decide whether to make any repairs or adjust your asking price.

Make appropriate repairs.
This is not the time to undertake major improvements. It is generally wiser to make only necessary repairs (such as replacing cracked windows or rickety front steps) and cosmetic improvements (such as painting the exterior and planting flower beds) that will enhance your home's salability.

Neutralize your decor.
Eccentricities that you find charming may not charm a buyer. Consider replacing out-of-date carpeting, painting odd-colored rooms, and otherwise polishing your home's appearance. Pare down visible personal possessions. You may also want hire extra cleaning help while your house is on the market.

Your home's value is ultimately what a buyer is willing to pay at any given time. Your final list price may depend on many factors: If you want to sell quickly or you are in a buyer's market, you may decide to set your price lower than market value. On the other hand, if you're in a seller's market where multiple offers are common, you may want to set your price higher than market value.

Know how to read a comparative market analysis
A comparative market analysis should take into account repairs, improvements, and annual costs (such as property taxes) of your home, in addition to its size, features, and amenities. Expect to get an analysis of recently sold, comparable homes in the neighborhood, and a list of comparable homes currently for sale.

Get an appraisal
If you want confirmation of the list price you have in mind, get a pre-sale appraisal. Appraisers use comparable sales in addition to other information to make their determinations.

You may not have to wait long for your first offer. If the market is active, you may get one the day you list. In most cases, however, you will wait a few weeks for an offer. This can be an emotional process, especially if offers come in far below your list price. Remember:

Don't rush negotiations
Take the time to receive offers in person, not over the phone. Consider all offers carefully, and make sure that the terms are as favorable to you as they are to the buyer.

Don't get personal
You want to know as much as possible about the buyer's motivation—and the buyer wants to know about yours, as well. If possible, avoid discussing your situation in terms of any need to sell. Don't overreact if you are presented with an offer you find insulting.

Don't hesitate to counter
Even in a buyer's market where numerous listings make selling difficult, it never hurts to counter an offer (particularly a low offer).

At this point, the buyer is busy with financing; until the sale closes, you are responsible for keeping your property in the same condition it was when the buyer saw it last. The closing date should be clearly specified in your sales contract, which should include deadlines for the buyer to sign off on contingencies. Make sure the buyer meets any deadlines you've set. Be ready to deal with any issues that may crop up such as:

• Unsatisfactory home inspection
• Low appraisal
• Cloud on the title
• Buyer's remorse

If you know of issues that could arise ahead of time, and how to deal with them, selling your home will go smoothly.

Once you've sold your home, you can proceed with your move and tie up the loose ends:

Make a file
File all closing and settlement papers; include receipts for any home improvements you made while you owned the house. Even though it's unlikely you will have to pay capital gains tax, you will need these figures for your next tax return.

Send change-of-address notices
Avoid getting caught by late payment fees: Before you move, send change-of-address notices to creditors, professional associations, and publications to which you subscribe.

Switch utilities
It's important to make sure your utilities are switched off at your previous address and switched on at your new address around the closing date.