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Selling Your House For Dummies



Selling Your House For Dummies

Eric Tyson, Ray Brown

ISBN: 978-1-119-43431-3 February 2018 384 Pages

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Sell your house in any market

Whether you're selling your home yourself or using a realtor, this helpful guide offers all the information you need to make an otherwise-stressful undertaking go smoothly. In Selling Your House For Dummies, you'll find plain-English, easy-to-follow information on the latest mortgage application and approval processes, the hottest websites used in the house-selling process, and revised tax laws that affect the housing and real estate markets.

From the author team behind America's #1 bestselling real estate book, Home Buying Kit For Dummies, this book offers Eric Tyson and Ray Brown's time-tested advice, recommendations, and strategies for selling your house given current market conditions. From staging your home to utilizing technology to sell your house directly to home buyers, this trusted resource is packed with tips and ideas to make your home the most appealing house on the block.

  • Prepare your property for the best offer
  • Stage and market your house successfully
  • Negotiate and successfully close the sale
  • Make sense of contracts and forms used in the house-selling process

Get the tried-and-true advice that will help you sell your property!

Introduction 1

How This Book Is Different: The Eric Tyson/Ray Brown Difference 1

Foolish Assumptions 2

Icons Used in This Book 3

Beyond the Book 4

Where to Go from Here 4

Part 1: Getting Started with Selling Your House 5

Chapter 1: Deciding to Sell 7

Figuring Out If You Really Need to Sell 9

Good reasons to stay 10

Reasons to consider selling 15

Knowing the Health of Your Housing Market 17

Selling in a depressed housing market 17

Selling during a strong market 21

Chapter 2: Selling and Your Personal Finances 23

Trading Up 23

Examining your housing budget 24

Figuring your expected expenses after trading up 27

Determining the financial impact on your future goals 31

Exploring the other costs of trading up 31

Making Retirement Housing Decisions 32

Trading down 32

Researching reverse mortgages 38

Tax Facts Sellers and Landlords Ought to Know 43

Chapter 3: Exploring the Economics of Selling 45

Estimating Proceeds of Sale 46

Estimated sale price 46

Closing costs 47

Mortgage payoff 48

Moving expenses 50

Putting it all together 51

Assessing the Financial Feasibility of a Move 52

Researching living costs and employment opportunities 52

Avoiding relocation traps 54

Chapter 4: Confronting Financing Issues 57

Financing Decisions When Trading Up 58

Choosing your mortgage 58

Financing improvements 59

The Trials and Tribulations of Seller Financing 61

Asking yourself why you’d ever want to be a lender 62

Deciding if seller financing is for you 63

Finding creditworthy buyers 64

Deciding what to charge 72

Protecting yourself legally 73

Part 2: Tactical Considerations 75

Chapter 5: Timing Is Everything 77

Timing the Sale of Your House 77

First peak season: Spring flowers and For Sale signs bloom 79

First valley: Summer doldrums 79

Second peak season: Autumn leaves and houses of every color 80

Death Valley: Real estate activity hibernates until spring 82

The Seller’s Quandary: Timing the Purchase of Your Home 82

Consolidating Your Sale and Purchase 83

Determine your house’s current value 83

Check your buying power 84

Familiarize yourself with the market 85

Take action 86

Chapter 6: For Sale By Owner 89

Eyeing the Potential FSBO Advantages 89

You want to save money on commissions 90

You may already have a ready, willing, and able buyer 90

You may know the house and neighborhood well 91

You may be more motivated than an agent 91

You like challenges 92

You want to be in control 93

Your house may sell itself 93

Focusing on Potential FSBO Disadvantages 93

You may not know how to price property 93

You may not know how to prepare your house for sale 94

You may not know how to market your property 94

You may not know how to separate real buyers from fakes 94

You may not have enough experience as a negotiator 95

You may get yourself into legal trouble 95

You may not know how to close the sale 95

Increasing Your Chances of Success 96

Educate yourself 96

Ensure that other team members are especially strong 96

Cooperate with agents 97

Financially qualify prospective buyers 97

Chapter 7: Your Real Estate Team 99

Teaming Up — A Winning Concept 99

Landing the Perfect Listing Agent 101

Understanding agent relationships 102

Recognizing the best listing agents 104

Choosing your listing agent 105

Achieving top performance from the winner 112

Bringing in the Broker 113

Handling House Inspectors 114

Arranging premarketing property inspections 114

Exploring the advantages of inspecting before marketing 115

Investigating inspectors 117

The Officiating Escrow Officer 120

Finding Financial and Tax Advisors 121

Locating a Good Lawyer 122

Choosing among lawyers 123

Working well with your lawyer 124

Chapter 8: Listing Contracts and Commissions 125

Understanding Listing Contracts 125

Considering the Types of Listings 127

Exclusive listings 127

Open listings 137

Examining Broker Compensation 139

Commissions 139

Net listings 144

Discount brokers 145

Preparing Seller Disclosure Statements 147

What information should you disclose? 147

An ounce of prevention is worth a pound of cure 152

Part 3: Getting Top Dollar When You Sell 155

Chapter 9: Preparing Your House for Sale 157

Handling Presale Preparation 158

Creating curb appeal 158

Exteriors attract, but interiors sell 160

Staging 162

Think Again: Avoiding Major Improvements 165

Chapter 10: Determining Your House’s Value 167

Defining Cost, Price, and Value 168

Value is elusive 168

Cost is history 169

Price is the here and now 170

Determining Fair Market Value (FMV) 170

Need-based pricing isn’t FMV 171

Median prices aren’t FMV 171

Using a Comparable Market Analysis 173

Playing with the numbers 176

Interpreting CMA adjustments and flaws 177

Considering appraisals versus CMAs 179

Bidding Wars 180

How buyers and sellers get to FMV 180

Why “buying a listing” ruins property pricing 181

Chapter 11: Price It Right and Buyers Will Come 183

Getting a Grasp on Pricing Methods 184

Four-phase pricing: Prevalent but ineffective 184

Pleasure-pleasure-panic pricing: Fast, top-dollar sales 185

Quantum pricing: An effective technique 188

Identifying Incentives and Gimmicks 190

Deal-making incentives 191

Deceptive gimmicks 191

Overpricing Your House 192

Can’t sell versus won’t sell 193

Three factors all buyers consider 193

Danger signs of overpricing 194

The foolproof way to correct overpricing 195

Placing the blame where it belongs 197

Part 4: The Brass Tacks of Selling Your House 199

Chapter 12: Marketing Your House 201

Advertising That Works 201

For Sale sign 202

Classified ads 203

Multiple listing service (MLS) 206

Listing statement 207

Computers 208

Word of mouth 208

Arranging Open Houses 209

Brokers’ opens 210

Weekend open houses 210

Showing Your Property 211

Preshowing preparations 212

The final showing 213

Chapter 13: Using Technology to Sell Your House 215

Knowing the Internet’s Limitations: The Net Alone Can’t Sell Your House 216

Ensure good web promo of your house 216

Knowing the truth about for-sale-by-owner (FSBO) sites 217

Realize the limits of valuing your house online 219

Relying on Technology to Determine Whether to Sell 220

Chapter 14: Negotiating Strategies for Sellers 223

Mastering Your Feelings 224

Putting emotions in their place 225

Gaining detachment through an agent 226

Following Some Basic Rules 227

Surviving the Bargaining Process 227

Receiving an offer to purchase 229

Dealing with contingencies — necessary uncertainty 231

Making a counteroffer 232

Negotiating from a Position of Strength 236

Handling multiple offers 237

Delaying presentation of offers 237

Setting guidelines for an orderly presentation process 238

Selecting the best offer 239

Negotiating from a Position of Weakness 241

Rejecting lowball offers 242

Considering other offers usually made in weak markets 244

Negotiating credits in escrow 247

Distinguishing Real Buyers from Fakes 251

Are the buyers creditworthy? 252

Are the buyers realistic? 252

Are the buyers motivated? 252

Do the buyers have a time frame? 252

Are the buyers cooperative? 253

Chapter 15: It Ain’t Over ’til the Check Clears 255

Entering the Neutral Territory of an Escrow 255

Understanding the role of the escrow officer 256

Maximizing your escrow 257

Avoiding the curse of December escrows 261

Letting Go of Your House 262

Moving daze 263

The final verification of condition 265

Surviving Seller’s Remorse or (Gasp) the Dreaded Double Whammy 265

Confronting your fears 266

Facing the ultimate test 267

Chapter 16: Income Tax Filings after the Sale 269

Profits from a House Sale 269

Defining profits 270

Excluding house sale profits from tax 270

Tax Filings Required after the Sale 271

Schedule D: Capital Gains and Losses 272

State income taxes on housing profits 275

Part 5: The Part of Tens 277

Chapter 17: Ten Things to Do After You Sell 279

Keep Copies of the Closing and Settlement Papers 279

Keep Proof of Improvements and Prior Purchases 280

Stash Your Cash in a Good Money Market Fund 280

Double-Check the Tax Rules for Excluding Tax on House Sale Profits 281

Cast a Broad Net When You Consider Your Next Home 282

Remember That Renting Can Be a Fine Strategy 282

Reevaluate Your Personal Finances When Things Change 283

Don’t Simply Rehire Your Listing Agent When You Repurchase 283

Think Through Your Next Down Payment 284

Remember to Send Change of Address Notices 284

Chapter 18: Ten Tips for Selling Rental Real Estate 287

Don’t Inadvertently Convert Your House into Income Property 287

Exercise Extra Care When You Sell Rental Property 289

Know How to Defer Your Investment Property Profits 289

Understand Your Local Market to Time Your Sale 290

Understand Opportunities for Adding Value 291

Maximize Your Property’s Rental Income 292

Minimize Your Property’s Expenses 292

Utilize Agents with Investment Property Experience 293

Visit Comparables and Review the Valuation Analysis 293

Work with Tax and Legal Advisors Who Understand

Rental Property 294

Chapter 19: Answers for Ten Questions Home Buyers May Ask 295

What Do You Like Best and Least about Living Here? 296

Why Are You Selling This Lovely House? 296

How Much Did You Pay for This House? 297

How Did You Establish the Asking Price? 298

Have You Received Inspection Reports? 298

May I See Your Written Defect Disclosure Statement? 298

Are There Any Neighborhood Changes That May Affect the Home’s Desirability? 299

How Many Times in the Last Year Have You Called the Police and Why? 299

What Problems Have You Had with the House? 300

What Are the Local Public Schools Like? 301

Part 6: Appendixes 303

Appendix A: Sample Real Estate Purchase Contract 305

Appendix B: Example of a Good Inspection Report 317

Appendix C: Glossary 333

Index 349