By Jon Miller, Realtor®
Homeowners face a lot of unknowns when it’s time to sell their home so there are a lot of questions. You’ll need to know how much your home is worth, how much it will cost to sell your home, how to get your home ready to sell, how to reach buyers, what happens after a buyer’s offer is accepted, and whether you should list your home for sale first or find your next home first. Here you’ll find the answers to 9 of the most common questions that I hear from home sellers. This is Part I of a three part series.
How Much is My Home Worth?
Figuring out the value of your home and how much you owe on your mortgage are among the first steps of the home selling process. Knowing these numbers will help you determine if it makes sense to sell now and help you prepare for the purchase of your next home or your move.To narrow down the value of your home you’ll compare it recently sold homes of a similar style and size that are in the same area.
Condition, specific location, features, and amenities will all play an important role in determining the value of your home. While nearly all home sellers believe that their home is worth more than it is, try not to fall into this trap. Being unrealistically optimistic about the value of your home will lead to few showings, no reasonable offers, and a home that sits on the market for months and months.
Are Zillow’s Zestimates Accurate?
No, Zillow’s Zestimates (and any other online estimates) are not a good way to estimate the value of your home. Online estimates can easily be off by 10% or more.
If you’re curious about the accuracy of these estimates visit a number of online estimate sites and look at the difference in value estimates. One house that I looked at recently had various online estimates ranging from $600,000 to $900,000 for a house that is worth close to $700,000. One of the estimates was for just under $700,000 but there’s no way to know which is the most accurate, if any.
How Much will it Cost to Sell my Home?
Staging & Pre-Listing Repairs
These costs will vary greatly depending on what, if anything, needs to be done and what you have the time and budget to complete. Some homes are listed with no investments made. These are typically homes that are in pristine condition and homes that need so much work that making 2-3 improvements won’t increase the value. Typical costs range from $500-$5,000.
Real Estate Transfer Taxes & Commissions
These fees vary by area and the agreement with your broker. Typical costs range from 6%-8% of the sale price.
These costs are very difficult to estimate because we just don’t know what issues a home inspection will uncover and which of those issues will be important to buyers. A home inspector may find that there are no major issues and the buyer will accept the property as-is. It’s also possible that an inspection will uncover a major structural issue that requires extensive repairs that every buyer will want to have addressed before purchasing the home. While both of these are less common, they do happen. I encourage sellers to have some budget set aside for common major repairs. Depending on the age, size, and condition of the property having a budget of $2,500 to $5,000 makes sense. It doesn’t mean that you’ll use it, but it’s best to plan for it and expect it.
Prior to listing your home for sale you’ll want to contact your lender to get your mortgage payoff amount. You’ll need this number to estimate your proceeds from the sale.
This is Part I of a three part series.
Part III of this series covers what to do if your house doesn’t sell, what happens after you’ve accepted a buyer’s offer, and what you’ll need to know if you’re planning on buying a new home at the same time that you’re selling your current home. Read Part III.