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Understanding Mortgages: Selling Your House

In the midst of one of the most uncertain real estate markets in history, it’s more important than ever to be informed. In a continuing series, we take a look at some of the most pressing questions about mortgages, refinancing, home equity, and other real estate options available to you.

(8/28/2012) Anyone taking even a casual browse through housing market news will know that it’s a buyers market right now. Home prices and interest rates are down, creating an environment of affordability for buyers. How do sellers make sure they successfully get rid of their property, but without substantial loss or time?

The first step is information. What is your local market like, and how has it been affected by the market? A “hot” market is one with more buyers than sellers. Buyers are competing and driving up prices. In these markets you can price your house more aggressively. A “cold” market is one with more sellers than buyers, so buyers can and do offer lower prices. In this market, sellers should list a price at or below market value to ensure a sale. Of course, determining your local market is more than simply online research – determine what other sellers your neighborhood experienced, and talk to a real estate agent knowledgeable in the area.

The next step is evaluation. You should have your home officially evaluated with an appraiser to ensure your suggested price is appropriate. These officials will examine your home and do research to identify comparable sales in your neighborhood. Going one step further and having a full inspection can also reinforce the value of the property, and identify any issues that might later cause a roadblock in the sale like the need for major repairs. If any major or minor issues are identified, it makes good sense to take care of them now – it can actually enhance the ultimate value of the home.

Always helpful through these first two steps and throughout the entire process is to work with key professionals with expertise in their area. Experienced and responsible real estate agents can provide valuable knowledge for a commission of about 5-6% of the sale price, a small price for time and aggravation saved.

When it’s time to show the house, aesthetics are key. If a home looks well-maintained and attractive, buyers will provide more reasonable offers. Also, a thorough list of all th selling points is helpful – good school districts, recent renovations, energy-saving features, neighborhood features, and more. When working with an agent, he or she will help put the property into listing services and ads to attract attention. Showings can occur via open houses or private showings.

And then the offers arrive. With the help of your real estate agent, you can take a critical look at offers that are presented – the promised purchase, the buyer’s financing, any proposed contingencies (like the buyer selling his or her house first), etc. Once you select and accept an offer, you will need to make the home available for inspection, negotiate over any repair issues, and sign appropriate paperwork.

Of course the actual process of selling a house will take time, patience, and occasionally a few rounds of offers. But knowing the key elements involved, and the necessary steps, will help navigate the process.