How to | Hold a Successful Garage Sale
What to Know 7 Reasons to Work With a REALTOR®
How to | Prepare for the Move
WHAT TO KNOW 7 Reasons to Work With a REALTOR®
REALTORS® aren’t just agents. They’re professional members of the National Association of REALTORS® and subscribe to its strict code of ethics.
This is the REALTOR® difference for home buyers:
An expert guide.
Objective information and opinions.
Property marketing power.
Your rock during emotional moments.
VOCABULARY Agency & Agency Relationships
The term “agency” is used in real estate to help determine what legal responsibilities your real estate professional owes to you and other parties in the transaction.
The seller's representative (also known as a listing agent or seller's agent) is hired by and represents the seller. All fiduciary duties are owed to the seller, meaning this person’s job is to get the best price and terms for the seller. The agency relationship usually is created by a signed listing contract.
The buyer's representative (also known as a buyer’s agent) is hired by prospective buyers to and works in the buyer's best interest throughout the transaction. The buyer can pay the agent directly through a negotiated fee, or the buyer's rep may be paid by the seller or through a commission split with the seller’s agent.
A subagent owes the same fiduciary duties to the agent's customer as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not the buyer’s agent, shows property to a buyer. The subagent works with the buyer to show the property but owes fiduciary duties to the listing broker and the seller. Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer customer can expect to be treated honestly by the subagent.
A disclosed dual agent represents both the buyer and the seller in the same real estate transaction. In such relationships, dual agents owe limited fiduciary duties to both buyer and seller clients. Because of the potential for conflicts of interest in a dual-agency relationship, all parties must give their informed consent. Disclosed dual agency is legal in most states, but often requires written consent from all parties.
Designated agents (also called appointed agents) are chosen by a managing broker to act as an exclusive agent of the seller or buyer. This allows the brokerage to avoid problems arising from dual-agency relationships for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties.
A transaction broker (sometimes referred to as a facilitator) is permitted in states where nonagency relationships are allowed. These relationships vary considerably from state to state. Generally, the duties owed to the consumer in a nonagency relationship are less than the complete, traditional fiduciary duties of an agency relationship.
QUESTIONS TO ASK When Considering Selling
These questions will help you decide whether you’re ready for a home that’s larger or in a more desirable location. If you answer yes to most of the questions, you may be ready to move.
Have you built substantial equity in your current home?
Has your income or financial situation changed?
Have you outgrown your neighborhood?
Are there reasons why you can’t remodel or add on?
Are you comfortable moving in the current housing market?
Are interest rates attractive?
Is the effort and cost of maintaining your current home becoming difficult to manage?
WHAT TO KNOW About Capital Gains
A Special Real Estate Exemption for Capital Gains
Up to $250,000 in capital gains ($500,000 for a married couple) on the home sale is exempt from taxation if you meet the following criteria: (1) You owned and lived in the home as your principal residence for two out of the last five years; and (2) you have not sold or exchanged another home during the two years preceding the sale. You may qualify for a reduced exclusion if you otherwise qualify but are short of the two-out-of-the-last-five-years requirement if you meet what the tax law calls “unforeseen circumstances,” such as job loss, divorce, or family medical emergency.
CHECKLIST Before Putting Your Home up for Sale
Here are a few items to take care of before listing your home. This can make the sale process quicker and easier in the long run.
Consider a pre-sale home inspection.
An inspector will be able to give you a good indication of the trouble areas that will stand out to potential buyers, and you’ll be able to make repairs before open houses begin.
Organize and clean.
Pare down clutter and pack up your least-used items, such as large blenders and other kitchen tools, out-of-season clothes, toys, and seasonal items. Store items off-site or in boxes neatly arranged in the garage or basement. Clean the windows, carpets, walls, lighting fixtures, and baseboards to make the house shine.
Get replacement estimates.
Do you have big-ticket items that will need to be replaced soon? Find out how much it will cost to repair an older roof or replace worn carpeting, even if you don’t plan to do so. The figures will help buyers determine if they can afford the home, and they’ll be handy when negotiations begin.
Gather up the warranties, guarantees, and user manuals for the furnace, washer/dryer, dishwasher, and any other items that will remain with the house. It may seem like this task can be left until closing, but you don’t want lost paperwork or last-minute scrambling to cause the deal to fall through.
Spruce up the curb appeal.
Walk out to the front of your home, close your eyes, and pretend you’re a prospective buyer seeing the property for the first time. As you approach the front door, what is your impression of the property? Do the lawn and bushes look neatly manicured? Is the address clearly visible? What do you see framing the entrance, if anything? Is the walkway free of cracks and impediments?
HOW TO Hold a Successful Garage Sale
Garage sales can be a great way to get rid of clutter and earn a little extra cash before you move. But make sure you plan ahead; they can take on a life of their own.
Don’t wait until the last minute.
Depending on how long you’ve lived in your home and how much stuff you want to sell, planning a garage sale can take a lot of time and energy. And that’s on top of the effort of putting your home on the market!
Contact your local government.
Most municipalities will require you to obtain a permit in order to hold a garage sale. They’re often free or cheap, but the fines for neglecting to obtain one can be hefty.
See if neighbors want to join in.
You can turn your garage sale into a block-wide event and lure more shoppers. However, a permit may be necessary for each home owner, even if it’s a group event.
Schedule the sale.
Sales on Saturdays and Sundays will generate the most traffic, especially if the weather cooperates. Start the sale early — 8 or 9 a.m. is best — and be ready for early birds.
Place an ad in the newspaper, free classified papers, and websites, including the date(s), time, and address of the garage sale. Add information about what will be available, such as kids’ clothes, furniture, or special equipment. On the day of the sale, use balloons and signs with prominent arrows to grab attention.
Price your goods.
Clearly mark rounded prices (50 cents, 3 for $1, or $5, for example) with easily removable stickers.
If it’s junk, recycle or donate it.
If it’s truly garbage, throw it away or place it in a freebie bin. Don’t try to sell broken appliances, and have an electrical outlet nearby in case a customer wants to try plugging something in.
Display items nicely.
Organize by category, and don’t make customers dig through boxes.
Stock up on supplies.
Having a stock of old shopping bags that can be reused encourages people to buy more items. Newspapers are handy for wrapping fragile goods.
Manage your money.
Obtain ample change for your cashbox, and have a calculator on hand. Assign one person to man the “register,” keeping a tally of what was purchased and for how much.
HOW TO Hire a Remodeling Contractor
Shop around for the right company. Get at least three written estimates.
Ask for and check references. If possible, look at jobs the contractor recently completed. Check with your local chamber of commerce or Better Business Bureau for complaints.
Be sure that the contractor has the necessary licenses and insurance, as well as the ability to obtain permits. Ask if the contractor’s workers will do the entire job or whether subcontractors will be involved.
Read the contract carefully. Be sure the contract states exactly what is to be done and how change orders will be handled. Check that the contract states when the work will be completed and what recourse you have if it isn’t. Make sure the contract indemnifies you if work does not meet building codes or regulations. Be sure that the contract specifies who will clean up after the job and be responsible for any damage.
Ensure that the materials meet your specifications.
Seal the deal. Remember that you can often cancel a contract within three business days of signing it. Make a small down payment so you won’t lose much if the contractor fails to complete the job. Don’t make the final payment until you’re satisfied with the work.
HOW TO Add Curb Appeal
HOW TO Clean When Your Home is For Sale
Executing a deep clean before putting your home on the market will not only help it shine, but it will make tidiness easier to maintain between showings. Here are some power-cleaning tips to try.
Clean windows make a huge difference.
Remove window screens and place them outside on a tarp or other clean, waterproof surface. Use a garden hose, an all-purpose cleaner, and a soft brush to gently clean the screens. You don’t need anything special to polish up window glass; just mix a solution of one part white vinegar to eight parts water, plus a drop or two of dishwashing liquid in a spray bottle. Wipe with newspaper to avoid streaks. (Washing on a cloudy day also reduces streaking.)
The fridge is the most common source of kitchen smells.
Check the drip tray underneath your refrigerator and wash out any standing water from defrosting. Scrub the inside of the fridge with a baking soda and water solution. Activated charcoal in the fridge can help keep odors at bay.
Think outside the house.
It’s amazing the difference a sparkling entryway makes to your home’s curb appeal. Wipe down your front door, give the doormat a good shake/vacuum, and make sure dust and dirt haven’t collected on outdoor furniture. Use a pressure washer to give your driveway and garage floor a good cleaning. The acidity in dark cola drinks can help remove oil, rust, and grease stains, along with a little elbow grease.
Target the Bathroom.
For tile floors, apply your usual cleaner and then run a wet/dry vac, which will suck contaminants out of the grout. Pour a quarter cup each of baking soda and vinegar down the drains, leaving the concoction overnight, then flush with boiling water. Clean soap scum and mildew from plastic shower curtains by tossing them into your washer on the gentle cycle in cold water, with detergent and ½ cup vinegar (if mildew is present, add ½ cup of bleach instead of vinegar). Put a couple of large towels into the machine to act as scrubbers. Allow the curtain to drip-dry on the rod.
Make your bed better.
Vacuum mattresses and box springs, and then rotate and flip over. Do the same for removable furniture cushions. This is also a great time to wash or dry-clean the dust ruffle and mattress pad. Add new loft to a lumpy comforter by having two people vigorously shake the quilt up and down to redistribute stuffing.
Wash the walls.
Grease, smoke, and dust can adhere to walls and make even the best decorating look dingy. Resist the temptation to spot-clean since it will make the rest of the wall look dirtier. Mop walls using a general-purpose cleaner diluted with hot water. Start at the top corner of the wall to avoid drips. Don’t press too hard, and rinse the mop head frequently in clean water. Use melamine foam cleaner to erase scuffs and stains.
HOW TO Prepare for the Photoshoot
With the majority of buyers shopping for homes online, high-resolution slide shows and video tours are a must. Here’s how to make your home shine on camera.
Understand the camera’s perspective.
The camera’s eye is different from the human eye. It magnifies clutter and poor furniture arrangement so that even a home that feels comfortable in person can look jumbled online.
Make it spotless.
Cameras also tend to magnify grime. Don’t forget floor coverings and walls; a spot on a rug might be overlooked during a regular home showing, but it could become a focal point online.
Know what to leave.
You want to avoid clutter, but try to have three items of varying heights on each surface. On an end table you can place a tall lamp (high), a small plant (medium), and a book (low).
Snap practice pictures with your own camera.
This will give you an idea of what the home will look like on camera before the photographer shows up. Examine the photos and make changes to improve each room’s appearance, such as opening blinds to let in natural light, removing magnets from the refrigerator, or taking down distracting art.
Removing one or two pieces of furniture from each room, even if just for the shoot, can make your space appear larger on screen.
Spotlight the flow of your space by creating a focal point on the furthest wall from the doorway and arranging the other pieces of furniture to make a triangle shape. The focal point may be a bed in a bedroom or a china cabinet in a dining room.
Include a healthy plant in every room; the camera loves greenery. Energize bland decor by placing a bright vase on a mantle or draping an afghan over a couch.
Keep the home in shape.
Buyers who liked what they saw online expect to encounter the same home in person.
HOW TO Attract More Buyers
These tips will help you convince buyers your property offers top value for their dollar.
Amp up curb appeal.
Look at your home objectively from the street. Check the condition of the landscaping, paint, roof, shutters, front door, knocker, windows, and house number. Observe how your window treatments look from the outside. Something special—such as big flowerpots or an antique bench—can help your property stand out after a long day of house hunting.
Enrich with color.
Paint is cheap, but it can make a big impression. The shade doesn’t have to be white or beige, but stay away from jarring pinks, oranges, and purples. Soft yellows and pale greens say “welcome,” lead the eye from room to room, and flatter skin tones. Tint ceilings in a lighter shade.
Upgrade the kitchen and bathrooms.
These are make-or-break rooms. Make sure they’re squeaky clean and clutter-free, and update the pulls, sinks, and faucets. In a kitchen, add one cool appliance, such as an espresso maker.
Add old-world patina to walls.
Crown molding that’s at least six to nine inches deep and proportional to the room’s size can add great detail on a budget. For ceilings nine feet high or higher, consider dentil detailing, which is comprised of small, tooth-shaped blocks in a repeating ornamentation.
Screen hardwood floors.
Refinishing is costly, messy, and time-consuming, so consider screening instead. This entails a light sanding — not a full stripping of color or polyurethane — then a coat of finish.
Clean out and organize closets.
Remove anything you don’t need or haven’t worn in a while. Closets should only be half-full so buyers can visualize fitting their stuff in.
Update window treatments.
Buyers want light and views, not dated, heavy drapes. To diffuse light and add privacy, consider energy-efficient shades and blinds.
Hire a home inspector.
Do a preemptive strike to find and fix problems before you sell your home. Then you can show receipts to buyers, demonstrating your detailed care for their future home.
CHECKLIST For Better a Home Showing
Clear off counters and pack unnecessary decorative items. Put extra furniture in storage, and remove out-of-season items. Don’t forget to clean out the garage, too.
Let it shine.
Cleaning windows and screens will help bring more light into your home. Replace burnt bulbs, and consider higher wattage in low-light areas. Clean the walls or brush on a fresh coat of bright, neutral paint. Replace heavy curtains with sheer ones and show off your view.
Keep it clean.
A deep clean before listing your home will make upkeep easier. Consider hiring a cleaning service to help.
In summer, shut A/C vents on the first floor so more air will get upstairs. Reverse the process in winter.
Perform a sniff test.
Clean carpeting and drapes to eliminate odors. Open the windows to air out the house. Consider potpourri or scented candles and diffusers. For quick fixes in the kitchen, cotton balls soaked in vanilla extract or orange juice can instantly make the fridge a nicer-smelling place. Boil lemon juice in your microwave, then add it to your dishwasher to eliminate odors. You can also run lemon rinds through the garbage disposal for a similar effect.
Take care of minor repairs.
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 up outdoors.
Cut the grass, rake the leaves, add new mulch, trim the bushes, edge the walkways, and clean the gutters. A pot of bright flowers near the entryway adds great curb appeal.
Set the scene.
A bright afghan or new accent pillows easily jazz up a dull room. Pretty dishes or a simple centerpiece on the tables can help buyers picture themselves living there. Try staging a chess game in progress. If you have a fireplace, lay fresh logs or a basket of flowers there.
Make the bath luxurious.
Make sure your personal toiletry items are out of sight, along with old towels and toothbrushes. Add a new shower curtain and fancy guest soaps.
Send the pets to the neighbors.
If that’s not possible, crate or confine them to one room, and let the real estate practitioner know where they’ll be to eliminate surprises.
Lock up valuables and medication.
Agents can’t watch everyone all the time.
It can be awkward for everyone if you’re home at the time of a showing.
WHAT TO KNOW About the Appraisal Process
Once you are under contract, the buyer’s lender will send out an appraiser to make sure the purchase price is in line with the property’s value.
Appraisals help guide mortgage terms. The appraised value of a home is an important factor in the loan underwriting process. Although lenders may use the sale price to determine the amount of the mortgage they will offer, they generally only do so when the property is sold for less than the appraisal amount. Also, the loan-to-value ratio is based on the appraised value and helps lenders figure out how much money may be borrowed to purchase the property and under what terms. If the LTV is high, the lender is more likely to require the borrower to purchase private mortgage insurance.
Appraised value is not a concrete number. Appraisals provide a professional opinion of value, but they aren’t an exact science. Appraisals may differ quite a bit depending on when they’re done and who’s doing them. Changes in market conditions also can dramatically alter appraised value.
Appraised value doesn’t represent the whole picture of home prices. There are special considerations that appraised value doesn’t take into account, such as the need to sell rapidly.
Appraisers use data from the recent past. Appraisals are often considered somewhat backward looking, because they use sold data from comparable properties (often nicknamed “comps”) to help come up with a reasonable price.
There are uses for appraised value outside of the purchase process. For selling purposes, appraisals are usually used to determine market value or factor into the pricing equation. But other appraisals are used to determine insurance value, replacement value, and assessed value for property tax purposes.
HOW TO Prepare for a Short Sale
A short sale is one where the net proceeds from the sale won't cover your total mortgage obligation and closing costs, and you don't have other sources of money to cover the deficiency. It’s significantly different from a foreclosure, which is when your lender takes the title of your home through a lengthy legal process and then sells it directly. A short sale is sometimes the route sellers take to avoid foreclosure.
Consider loan modification first.
Hire a qualified team.
Prepare a short-sale package to send to your lender(s) for approval.
Gather documentation before offers come in.
Your lender requires several documents in order to consider a short sale. This package accompanies the offer, typically including:
HOW TO Navigate a Short Sale
Be prepared for a lengthy waiting period.
Even if you're well organized and have all the documents in place, short sales can still be a long process. Waiting for your lender’s review of the short-sale package can take several weeks or even months. The length varies by lender and location, but these benchmarks can put your situation in perspective:
Your real estate professional and attorney, with your authorization, can work with your lender’s loss mitigation department on your behalf to prepare the proper documentation and speed the process along.
When the bank does respond… it can approve the short sale, make a counteroffer, or deny the short sale. The last two actions can lengthen the process or put you back at square one.
Don't expect a short sale to solve your financial problems.
Here are some post-short sale conditions to keep in mind:
HOW TO Improve the Odds of an Offer
Price it right. Set a price at the lower end of your property’s realistic price range.
Asking a lender.
Prepare for visitors.
Consider an appraisal.
Be flexible about showings.
Anticipate the offers.
Don’t refuse to drop the price.
HOW TO Recognize a Qualified Buyer
Offers can be exciting, but unless your potential buyer has the resources to qualify for a mortgage, you may not really have a sale. Your real estate professional will try to determine a buyer’s financial status before you sign the contract. But it’s good for you to know what buyers with follow-through potential looks like.
They are prequalified—or even better, preapproved—for a mortgage.
They have enough money to make a down payment and cover closing costs.
Their income is sufficient to afford the home over the long term, too.
They have good credit, which they are monitoring and maintaining.
They’re not managing too many other debts to take on a mortgage.
VOCABULARY Transaction Documents
Property Disclosure Form
This form requires you to reveal all known defects to your property. Your real estate agent will let you know if there is a special form required in your state.
Purchasers’ Access to Premises Agreement
This agreement sets conditions for permitting the buyer to enter your home for activities such as measuring for draperies before you move.
This is the agreement between the buyer and seller, which outlines the terms and conditions of sale. Your agent or your state’s real estate department can tell you if a specific form is required.
Sales Contract Contingency Clauses
In addition to the contract, you may need to add one or more attachments to the contract to address special contingencies — such as the buyer’s need to sell a home before purchasing.
- and Post-Occupancy Agreements
Unless you’re planning on “moving day” being on or before “closing day,” you’ll need an agreement on the terms and costs of occupancy once the sale closes.
Lead-Based Paint Disclosure Pamphlet
If your home was built before 1978, you must provide this pamphlet. The buyers will also have to sign a statement indicating they received the pamphlet.
This document officially transfers ownership of the property to the buyers or their lender.
These are binding statements by either party. For example, you may end up signing an affidavit stating that you haven’t incurred any liens on your home.
These are amendments to the sales contract that affect your rights. For example, you may wish to negotiate to stay in the home for a specified period after closing, paying rent to the buyers during that period.
CHECKLIST Prepare for Your Move
Update your mailing address at usps.com or fill out a change-of-address form at your local post office.
Create a list of people who will need your new address.
Contact utility companies.
Check insurance coverage.
Unplug, disassemble, and clean out appliances.
Check with the condo board or HOA
Pack an “Open First” box.
If you’re moving a long distance:
HOW TO Pack Like a Pro
Plan ahead. Develop a master to-do list so you won’t forget something critical heading into moving day. This will also help you create an estimate of moving time and costs.
Discard items you no longer want or need. Ask yourself how frequently you use an item and how you’d feel if you no longer had it. Sort unwanted items into “garage sale,” “donate,” and “recycle” piles.
Pack similar items together. It will make your life easier when it's time to unpack.
Decide what you want to move on your own. Precious items such as family photos, valuable breakables, or must-haves during the move should probably stay with you. Pack a moving day bag with a small first-aid kit, snacks, and other items you may need before unpacking your “Open First” box.
Know what your movers will take. Many movers won’t take plants or liquids. Check with them about other items so you can plan to pack them yourself.
Put heavy items in small boxes. Try to keep the weight of each box under 50 pounds.
Don’t overpack boxes. It increases the likelihood that items inside the box will break.
Wrap fragile items separately. Pad bottoms and sides of boxes and, if necessary, purchase bubble-wrap or other packing materials from moving stores. Secure plants in boxes with air holes.
Label every box on all sides. You never know how they’ll be stacked. Also, use color-coded labels to indicate which room each box should go in, coordinating with a color-coded floor plan for the movers.
Keep moving documents together in a file, either in your moving day bag or online. Include vital contact information, the driver’s name, the van’s license plate, and the company’s number.
Print out a map and directions for movers and helpers. Make several copies, and highlight the route. Include your cell phone number on the map.
Back up computer files on the cloud. Alternatively, you can keep a physical backup on an external hard drive offsite.
Inspect each box and piece of furniture as soon as it arrives. Ahead of time, ensure your moving company has a relatively painless process for reporting damages.
HOW TO Move With Pets
Update your pet’s tag with your new address.
Request veterinary records.
Keep a week’s worth of food and medication with you.
Seclude them from chaos.
Prepare a pet first aid kit.
Play it safe in the car.
When traveling by air...
Prep your new home.
Learn about local health concerns and laws in your new area.
CHECKLIST For the New Owners
Before the property changes hands, consult this list to make sure these items are transferred with the house.