Picture this! You have been hearing about how hot the real estate market is in the DFW area. You are pretty sure that your mortgage balance is way lower than what you could get for your home. Do you really want to move? It is such a hassle getting the home ready to sell and then negotiate its sell. You also have to find a new place to live. None of these things sound appealing. On the other hand, it would be nice to have a change of scenery and even move up to a bigger house. You are pretty sure you could afford a nicer house now that you have been working for several years and have some money saved up. It is all too confusing. What should you do?
It is with the mission of clearing up some of this confusion that we present you with this list of frequent questions to consider before selling your house. It is one of a series of posts with frequent questions to consider when selling your home. Each set of questions cover a different step in the process so be sure to check it out.
When you are done reading these questions, please contact us with further questions or clarifications. We would love to help you sell your current home and get you into a new one. Let’s chat!
Why do I want to sell my house? – The first real question you need to ask yourself is why are you selling? If you are selling your house for a job transfer, then check with your company as they might have a relocation company in place that can handle the sell of your property. if you are selling to move up to a bigger house, you need to be sure to build in some contingency plans for what happens if your current home sells fast (very possible in this market). If you just want to sell to take advantage of the great seller’s market we are currently in, then I would recommend you contact a realtor to discuss possible prices. If you can get a Comparative Market Analysis (CMA) from the realtor, you can tell pretty quickly if you will make enough on the sell of your house to justify putting it on the market. You could also request a net seller sheet from the realtor that will outline all the costs involved with closing on the property (which generally run 8% to 11% of your sales price).
What is the current market? Is it favorable to me selling my house? – The CMA will help a lot with this question. Overall, the current market in the DFW region is a seller’s market, where we have many more buyers than sellers. Most homes that present well will sell relatively quickly and you are most likely going to get your asking price. In fact, we are still seeing many homes go into a situation where they get multiple offers on their home, which means you can, if you want, start a bidding process on your home where you get all the buyers to put in their final and best offers. I have seen sellers get almost ten percent over asking in cases like this.
Do I use a realtor? – Yes. You have the option of of not using a realtor as Texas allows you to sell your home yourself (whereas you need a license to sell anyone else’s home). I don’t recommend the For Sale By Owner (FSBO) approach. As you can see from these National Association of Realtor’s report, it works less often than it does. A realtor’s cost is well worth it to get you home sold at a good price with a lot less hassle on your part if you undertook the sale yourself.
Do I need to make any repairs? – Yes. You should always make repairs to a home before putting on the market (if your budget allows). What repairs you make is dependent on the return you will receive from the repair. I always tell sellers that kitchens and bathrooms sell homes so you want to invest some funds in making these rooms spectacular. You can also realize quite a good return on structural repairs (foundation, roof, plumbing, electrical) as any good realtor will advise to reduce the sales price if there are any structural issues. If you want a more precise ROI on repairs, go check out this site where you can get a good idea on what repairs will bring you the greatest return.
Do I need to pay off any liens or judgement against my title? – Yes. If you can afford to take care of any liens and judgement on your title before your put on the market, it will save you some possible heart burn later on as the title company will find the title marks and come back to you about them. It just looks better as well to buyers to find nothing on the title that could prevent the sell. Of course, the exception to this would be any mortgage (first or second) and home equity loans/line of credit as you get these paid off from the proceeds.
What preparations do I need to make before I approach a realtor? – I would recommend you interview at least three realtors before hiring one to sell your home. I am constantly surprised by the statistic of how many sellers just hire the first realtor they encounter without doing any home work on the realtor. There are plenty of sources online about realtors and their ability to provide you with top quality service. I would recommend you pick three out that you like the best. You can invite them out for a cup of coffee and drill them with questions you have about their experience, understanding of the market and their value systems. There are plenty of us so there is no reason not to spend some time making sure you find the realtor that fits you and your family the best.
What is the going rate for realtors today? – The industry standard is 6% but this is negotiable as we are not allowed to set industry rates due to the current laws forbidding this practice. You should know, however, that there is a host of realtors today that charge flat fees for listing your property. This practice is perfectly legal and could save you some considerable funds, but be careful that the flat fee brokerage will offer the same level of service you would get from a traditional brokerage.
What makes a good realtor? – This answer really depends on you. The bottom line gauge is whether the realtor will eventually be able to sell your house at the price you want within the amount of time you specify. Of course, you also will be working with this individual, or team, for a considerable amount of time so you want to be sure to pick a company that promotes high values, stellar customer service and responsiveness to your questions. One other way to think about it is how you operate internally. Do you like structure? If so, you need to be sure to pick an agent that provides a good solid plan for selling your house. If you want a realtor who is more laid back and carefree (but still gets the job done) go with one that has these characteristics, but might not be able to deliver on plans.
Where will I move? Will I have enough time to find another place to live if my house sells quickly? – In this tight seller’s market, you get a lot of buyers trying to buy your home. This is great! At the same time, once you sell your home, you are now one of the buyers competing for a new place to live. You can always move in with family members, or there are plenty of short term rental locations like apartments that will work with you on a place to live while you look for you new home. Of course, the ideal situation would be that you close on your current house and your new house within a few days of each other.
How much do I stand to make by selling my house? – The net seller sheet we mentioned before is the best source for this information. You can download title company apps that provide this information for you. You can also find some great calculators online to do this for you. It does give you a ballpark figure. If you want exact numbers, you need to call a title company to ask for a closing document, or get your agent to do it for you.
What kind of other fees exist for selling my house? – You will have the realtor commission, which make up the majority of the cost. You also have title company fees like document fees, attorney fees, title research fees, etc. Once again, the net seller sheet can outline all of these fees. You should expect to pay anywhere from 8% to 11% of your sales price in fees.
What are some of the more annoying things about selling a house? – It depends on you. Most of the complaints we hear from sellers stem from the inconvenience of the selling process. You have to keep your home presentable by making sure to clean often and clear away clutter. If you have pets, you have to make arrangements for them. Showings can be off putting as you are asked to leave your house for hours at a time. Of course, there is also the cost of selling your home. Many sellers do not like this. There are lot of agents that thrive on drama and salesmanship(something we don’t do!). Sellers tire of this very quickly. Finally, no one likes repairs. Sellers don’t like to be told what is wrong with their house.
Will I be able to get the same interest rate I did with my last mortgage? – It doesn’t look good for this to happen. However, the mortgage rates are still historical low compared to times in the past. You will need to take this into consideration as you figure out what you want to do once you sell your house as mortgages are not buying as much house as they used to do.