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- Herausgeber: John Wiley & Sons
- Kategorie: Ratgeber
- Sprache: Englisch
- Veröffentlichungsjahr: 2011
New how-to details on staging and curb appeal The fun and easy way? to minimize selling hassles and get topdollar for your house Want to stand out to homebuyers in today's crowded market?America's #1 bestselling real estate authors have revised theirclassic guide to save you time and money as you prepare to sellyour property. They'll show you when to put your house on themarket, the pros and cons of FSBO, and the best ways to utilize theInternet, from online listings to digital photos. Discover how to: * Prepare your property to attract buyers * Determine your asking price * Hire the right real estate agent * Market and show your house * Negotiate for the best offer
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Praise for House Selling For Dummies
“You won’t find a better ‘how-to-sell-your-home’ book than this one. The authors have included practical knowledge you won’t find anywhere else. . . . On my scale of one to 10, it rates a solid 10.”
— Robert J. Bruss, syndicated real estate columnist
“Brown and Tyson . . . are back with a timely tome: House Selling For Dummies. . . . Packed with the proven punch of the Brown-Tyson combination . . . the book is destined to become a home seller’s best friend.”
— Broderick Perkins, San Jose Mercury News
“The authors cover every aspect of the home-selling process — from deciding whether you are financially able to sell, to assembling a real estate team and marketing your property, to selling it quickly for top dollar.”
— Don DeBat, Crain News Service
“[Tyson and Brown] tackle the complex subject of selling a house with humor and practicality . . . the authors explain strategies that could generate or save readers thousands, perhaps even tens of thousands of dollars on the sale of their house.”
— Inman News Features
“The best thing about this book [House Selling For Dummies] is that it doesn’t recommend anything. Instead, it helps you in a far greater way. It helps you think through the relocation decision.”
— Dr. David Demko, AgeVenture News
“House Selling For Dummies by Eric Tyson and Ray Brown is fun . . . and also filled with practical advice.”
— Allen Norwood, Charlotte Observer
“Do’s and Don’ts for Do-It-Yourself Home Sellers: Start by educating yourself. I recommend the book House Selling For Dummies by Eric Tyson and Ray Brown, which offers excellent advice on the entire process.”
— Rick Wilking, Reuters News Service
“Home Buying For Dummies and House Selling For Dummies, both by Eric Tyson and Ray Brown, go into surprising depth on their topics without straying from their mission of explaining the processes simply. Perhaps the best thing is what the authors call their holistic approach. . . .”
— Maryann Haggerty, Washington Post
Praise for Eric Tyson and Ray Brown’s best-selling Home Buying For Dummies
“This fun read for home buyers includes the essentials, laced with humor and practical advice. The new material on Internet resources updates this classic how-to-buy-a-home book. Of the many books on this topic, this is by far the best. . . .”
— Robert J. Bruss, syndicated real estate columnist
“. . . takes you step by step through the process . . . humorous insights that keep the pages turning. This is a reference you’ll turn to time after time.”
— Judy Stark, St. Petersburg Times
“. . . Home Buying For Dummies immediately earned a prominent spot on my reference bookshelf . . . takes a holistic approach to home buying.”
— Broderick Perkins, San Jose Mercury News
“. . . Home Buying For Dummies provides a much-needed emotional stabilizer.”
— Judy Rose, Knight-Ridder News Service
“The humorous Home Buying For Dummies by Ray Brown and Eric Tyson is a favorite . . . because the editorial is so good. They check their facts very well. They set out to make you understand this subject and make it fun reading and informative.”
— Michelle Wong, Minneapolis Star Tribune
“The book [Home Buying For Dummies] is a primer on all the things to do and not to do when - buying a home.”
— Brian Banmiller, FOX-TV
“. . . can help you buy a castle for the price of house. The authors present a balanced approach to buying a house.”
— Times-Picayune, New Orleans, LA
“A survival guide to buying . . . fun to read and very clearly written. . . . Whether taking over a foreclosure, determining not how much you can borrow but how much you can actually afford to spend, how to find a good broker, landing a lender . . . Tyson and Brown definitely help ease the trauma of the transaction. . . .”
— Paula Lee Aldridge, Homes and Real Estate Magazine
Here’s what critics have said about Eric Tyson and his previous national best-selling personal finance guides:
“Personal Finance For Dummies is the perfect book for people who feel guilty about inadequately managing their money but are intimidated by all of the publications out there. It’s a painless way to learn how to take control. My college-aged daughters even enjoyed reading it!”
— Karen Tofte, producer, National Public Radio’s Sound Money
“Among my favorite financial guides are . . . Eric Tyson’s Personal Finance For Dummies.”
— Jonathan Clements, The Wall Street Journal
“Smart advice for dummies . . . skip the tomes . . . and buy Personal Finance For Dummies, which rewards your candor with advice and comfort.”
— Temma Ehrenfeld, Newsweek
“Eric Tyson is doing something important — namely, helping people at all income levels to take control of their financial futures. This book is a natural outgrowth of Tyson’s vision that he has nurtured for years. Like Henry Ford, he wants to make something that was previously accessible only to the wealthy accessible to middle-income Americans.”
— James C. Collins, coauthor of the national bestseller Built to Last; Lecturer in Business, Stanford Graduate School of Business
“You don’t have to be a novice to like Mutual Funds For Dummies. Despite the book’s chatty, informal style, author Eric Tyson clearly has a mastery of his subject. He knows mutual funds, and he knows how to explain them in simple English.”
— Steven T. Goldberg, Kiplinger’s Personal Finance Magazine
“Personal Finance For Dummies offers a valuable guide for common misconceptions and major pitfalls. It’s a no-nonsense, straightforward, easy-to-read personal finance book. . . . With this book, you can easily learn enough about finances to start thinking for yourself.”
— Charles R. Schwab, Chairman and CEO, The Charles Schwab Corporation
“It can be overwhelming to keep up with the latest developments, which is why you might turn to the book Mutual Funds For Dummies by Eric Tyson. A light touch and the use of plenty of graphics help the pages fly by. This book is a primer for those who flinch when contemplating the 7,000 funds you can now buy.”
— Brian Banmiller, FOX-TV
“Best new personal finance book.”
— Michael Pellecchia, syndicated columnist
“Eric Tyson . . . seems the perfect writer for a ...For Dummies book. He doesn’t tell you what to do or consider doing without explaining the why’s and how’s — and the booby traps to avoid — in plain English. . . . It will lead you through the thickets of your own finances as painlessly as I can imagine.”
— Clarence Peterson, Chicago Tribune
“Personal Finance For Dummies is, by far, the best book I have read on financial planning. It is a simplified volume of information that provides tremendous insight and guidance into the world of investing and other money issues.”
— Althea Thompson, producer, PBS’s Nightly Business Report
“This book provides easy-to-understand personal financial information and advice for those without great wealth or knowledge in this area. Practitioners like Eric Tyson, who care about the well-being of middle-income people, are rare in today’s society.”
— Joel Hyatt, founder, Hyatt Legal Services, one of the nation’s largest general-practice personal legal service firms
“Personal Finance For Dummies is a sane and useful guide that will be of benefit to anyone seeking a careful and prudent method of managing their financial world.”
— John Robbins, founder of EarthSave, author of May All Be Fed
“Worth getting. Scores of all-purpose money-management books reach bookstores every year, but only once every couple of years does a standout personal finance primer come along. Personal Finance For Dummies, by financial counselor and columnist Eric Tyson, provides detailed, action-oriented advice on everyday financial questions. . . . Tyson’s style is readable and unintimidating.”
— Kristin Davis, Kiplinger’s Personal Finance Magazine
“For those named in the title, such as myself, Personal Finance For Dummies is a godsend. It’s bright, funny, and it can save you money, too.”
— Jerome Crowe, reporter, Los Angeles Times
“Eric Tyson has brought his financial experience, investment knowledge, and down-to-earth writing style to create an outstanding book on mutual funds for all investors — and an essential book for new investors . . . in short, a classic. . . .”
— Jack Bogle, former CEO, The Vanguard Group
“This is a great book. It’s understandable. Other financial books are too technical and this one really is different.”
— Shad Johnson, producer, “Business Radio Network”
“An invaluable, easy-to-read financial help book that should be in every family’s library.”
— Stan Schaffer, reporter, The Morning Call, Allentown, PA
More Bestselling For Dummies Titles by Eric Tyson
Investing For Dummies®
A Wall Street Journal bestseller, this book walks you through how to build wealth in stocks, real estate, and small business as well as other investments.
Personal Finance For Dummies®
Discover the best ways to establish and achieve your financial goals, reduce your spending and taxes, and make wise personal financial decisions. Wall Street Journal bestseller with more than 1 million copies sold in all editions and winner of the Benjamin Franklin best business book award.
Taxes For Dummies®
The complete, best-selling reference for completing your tax return and making tax-wise financial decisions year-round. Tyson coauthors this book with tax experts David Silverman and Margaret Munro.
Home Buying For Dummies®
America’s #1 real estate book includes coverage of online resources in addition to sound financial advice from Eric Tyson and frontline real estate insights from industry veteran Ray Brown. Also available from America’s best-selling real estate team of Tyson and Brown — House Selling For Dummies and Mortgages For Dummies®.
Real Estate Investing For Dummies®
Real estate is a proven wealth-building investment, but many people don’t know how to go about making and managing rental property investments. Real estate and property management expert Robert Griswold and Eric Tyson cover the gamut of property investment options, strategies, and techniques.
Small Business For Dummies®
Take control of your future and make the leap from employee to entrepreneur with this enterprising guide. From drafting a business plan to managing costs, you’ll profit from expert advice and real-world examples that cover every aspect of building your own business. Tyson coauthors this book with fellow entrepreneur Jim Schell.
House Selling For Dummies®, 3rd Edition
by Eric Tyson and Ray Brown
Authors of Home Buying For Dummies
House Selling For Dummies®, 3rd Edition
Published byWiley Publishing, Inc.111 River St.Hoboken, NJ 07030-5774www.wiley.com
Copyright © 2008 by Eric Tyson and Ray Brown
Published by Wiley Publishing, Inc., Indianapolis, Indiana
Published simultaneously in Canada
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600. Requests to the Publisher for permission should be addressed to the Legal Department, Wiley Publishing, Inc., 10475 Crosspoint Blvd., Indianapolis, IN 46256, 317-572-3447, fax 317-572-4355, or online at http://www.wiley.com/go/permissions
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LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: The publisher and the author make no representations or warranties with respect to the accuracy or completeness of the contents of this work and specifically disclaim all warranties, including without limitation warranties of fitness for a particular purpose. No warranty may be created or extended by sales or promotional materials. The advice and strategies contained herein may not be suitable for every situation. This work is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If professional assistance is required, the services of a competent professional person should be sought. Neither the publisher nor the author shall be liable for damages arising herefrom. The fact that an organization or Website is referred to in this work as a citation and/or a potential source of further information does not mean that the author or the publisher endorses the information the organization or Website may provide or recommendations it may make. Further, readers should be aware that Internet Websites listed in this work may have changed or disappeared between when this work was written and when it is read.
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Library of Congress Control Number: 2007939645
ISBN: 978-0-470-17046-5
Manufactured in the United States of America
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About the Author
Eric Tyson, MBA, is a former financial counselor, lecturer and coauthor of the national best-seller, Home Buying For Dummies, as well as the author of four other best-selling books in the For Dummies series: Personal Finance, Investing, Mutual Funds, and Taxes (coauthor).
Eric has counseled thousands of clients on a variety of personal finance, investment, and real estate quandaries and questions. In addition to maintaining a financial counseling practice, he’s a former lecturer of the San Francisco Bay Area’s most highly attended financial management course at the University of California, Berkeley.
Eric is also a syndicated columnist and was an award-winning journalist for the San Francisco Examiner. His work has been featured and praised in hundreds of national and local publications, including Newsweek, Kiplinger’s, The Wall Street Journal, Money, The Los Angeles Times, and the Chicago Tribune, and on NBC’s Today Show, PBS’s Nightly Business Report, CNN, The Oprah Winfrey Show, ABC, CNBC, Bloomberg Business Radio, CBS National Radio, and National Public Radio.
A former management consultant to Fortune 500 financial service firms, Eric is dedicated to teaching people to manage their personal finances better. Over the past two decades, he has successfully invested in securities as well as in real estate, started and managed several businesses. He earned his MBA at the Stanford Graduate School of Business and his bachelor’s degree in economics at Yale.
Ray Brown, coauthor of the national best-seller Home Buying For Dummies, is a veteran of the real estate profession with over three decades of hands-on experience. A former manager for Coldwell Banker Residential Brokerage Company, McGuire Real Estate, Pacific Union GMAC Real Estate, and founder of his own real estate firm — the Raymond Brown Company — Ray is currently a writer, consultant, and public speaker on residential real estate topics.
Ray knows that most people are pretty darn smart. When they have problems, it’s usually because they don’t know the right questions to ask to get the information they need to make good decisions themselves. He always wanted to write real estate books that focused readers on what they needed to know to make sound home-buying and house-selling decisions.
On his way to becoming a real estate guru, Ray worked as the real estate analyst for KGO-TV (ABC’s affiliate in San Francisco) and as a syndicated real estate columnist for The San Francisco Examiner. He also hosted a weekly radio program — The Ray Brown on Real Estate, for KNBR — for 16 years. In addition to his work for ABC, Ray has appeared as a real estate expert on CNN, NBC, and CBS and in The Wall Street Journal and TIME.
Ray’s most significant achievements, however, are still Jeff and Jared, his two incomparable sons, and over 42 years of nearly always wedded bliss to the always wonderful Annie B. He’s delighted to welcome Jeff’s wife, Genevieve, and his grandson, Aidan Joseph Brown, to the family.
Dedication
This book is hereby and irrevocably dedicated to my family and friends, as well as to my counseling clients and customers, who ultimately have taught me everything I know about how to explain financial terms and strategies so that everyone may benefit.
— Eric Tyson
This book is lovingly dedicated to Annie B., who makes my heart sing.
— Ray Brown
Authors’ Acknowledgments
Many, many people at Wiley Publishing, Inc. helped to make this book possible and (we hope in your opinion) good. These folks include Chad Sievers, Project Editor; Carrie Burchfield, Copy Editor; and all the fine folks in Production! Thanks also to everyone else at Wiley who contributed to getting this book done and done right.
Extraordinary acclamation, copious praise, and profound gratitude is due our brilliant technical reviewers for this and prior editions who toiled long hours to ensure that we didn’t write something that wasn’t quite right. These good folks include two extraordinary real estate professionals: Kip Oxman, McGuire Real Estate and Lynnea Key, Lynnea Key Realty; one extraordinary mortgage consultant: David Wales, Palo Alto Funding Group, Inc.; as well as Patti Wallace with ECHO Housing and Dennis Ito, Bob Taylor, and all the good folks at KPMG Peat Marwick. Thank you one and all!
We also owe an enormous debt of gratitude to Paul Bragstad, Pacific Union GMAC Real Estate, for his incredible Internet insights; Joy Alafia for helping us obtain the California Association of Realtors’ exclusive listing contract and the property disclosure statement used in Chapter 8, the counter offer used in Chapter 14, and the real estate purchase contract included in Appendix A; Warren Camp, Warren Camp Inspection Services, for providing the exemplary premarketing inspection report included in Appendix B; Patty Oxman, Frank Howard Allen Realtors’ super star, for her staging tips; Victoria Naidorf, VP and Brokerage Counsel for Coldwell Banker in Northern California, who developed the ten troublemakers in Chapter 12; Brian Felix, Old Republic Title Company, who provided his usual scholarly advice about title insurance and escrows; Roland Jadryev, listing-statement writer extraordinary; Barbara Pacak, who unlocked the mysteries of lockboxes; Liz Johnson, who had answers to all our questions; and last, but far from least, Esty Lawrie and Dolly Toms, for their greatly appreciated wisdom and support.
Publisher’s Acknowledgments
We’re proud of this book; please send us your comments through our Dummies online registration form located at www.dummies.com/register/
Some of the people who helped bring this book to market include the following:
Acquisitions, Editorial, and Media Development
Project Editor: Chad R. Sievers
(Previous Edition: Suzanne Snyder)
Acquisitions Editor: Mike Baker
Copy Editor: Carrie Burchfield
(Previous Edition: Neil Johnson)
Editorial Program Coordinator: Erin Calligan Mooney
Technical Editor: Kip Oxman
Editorial Manager: Michelle Hacker
Editorial Assistants: Joe Niesen, Leeann Harney
Cover Photos: © Seth Joel/Getty Images
Cartoons: Rich Tennant (www.the5thwave.com)
Composition Services
Project Coordinator: Kristie Rees
Layout and Graphics: Reuben W. Davis, Alissa D. Ellet, Melissa K. Jester, Shane Johnson, Barbara Moore, Christine Williams
Anniversary Logo Design: Richard Pacifico
Proofreaders: John Greenough, Jessica Kramer, Nancy Reinhardt
Indexer: Potomac Indexing, LLC
Publishing and Editorial for Consumer Dummies
Diane Graves Steele, Vice President and Publisher, Consumer Dummies
Joyce Pepple, Acquisitions Director, Consumer Dummies
Kristin A. Cocks, Product Development Director, Consumer Dummies
Michael Spring, Vice President and Publisher, Travel
Kelly Regan, Editorial Director, Travel
Publishing for Technology Dummies
Andy Cummings, Vice President and Publisher, Dummies Technology/General User
Composition Services
Gerry Fahey, Vice President of Production Services
Debbie Stailey, Director of Composition Services
Contents
Title
Introduction
The Eric Tyson/Ray Brown Difference
Conventions Used in This Book
Foolish Assumptions
How This Book Is Organized
Icons Used in This Book
Where to Go from Here
Part I: The Selling Decision
Chapter 1: Deciding to Sell
Figuring Out if You Really Need to Sell
Knowing the Health of Your Housing Market
Chapter 2: Selling and Your Personal Finances
Trading Up
Making Retirement Housing Decisions
Tax Facts Sellers and Landlords Ought to Know
Chapter 3: Exploring the Economics of Selling
Estimating Proceeds of Sale
Assessing the Financial Feasibility of a Move
Chapter 4: Confronting Financing Issues
Financing Decisions When Trading Up
The Trials and Tribulations of Seller Financing
Part II: Tactical Considerations
Chapter 5: Timing Is Everything
Timing the Sale of Your House
The Seller’s Quandary: Timing the Purchase of Your Home
Consolidating Your Sale and Purchase
Chapter 6: For Sale By Owner
Eyeing the Potential FSBO Advantages
Focusing on Potential FSBO Disadvantages
Increasing Your Chances of Success
Chapter 7: Your Real Estate Team
Teaming Up — a Winning Concept
Landing the Perfect Listing Agent
Bringing in the Broker
Handling House Inspectors
The Officiating Escrow Officer
Finding Financial and Tax Advisors
Locating a Good Lawyer
Chapter 8: Listing Contracts and Commissions
Understanding Listing Contracts
Considering the Types of Listings
Examining Broker Compensation
Preparing Seller Disclosure Statements
Part III: Getting Top Dollar When You Sell
Chapter 9: Preparing Your House for Sale
Handling Presale Preparation
Think Again: Avoiding Major Improvements
Chapter 10: Determining Your House’s Value
Defining Cost, Price, and Value
Determining Fair Market Value (FMV)
Using a Comparable Market Analysis
Bidding Wars
Chapter 11: Price It Right and Buyers Will Come
Getting a Grasp on Pricing Methods
Identifying Incentives and Gimmicks
Overpricing Your House
Part IV: The Brass Tacks of Getting Your House Sold
Chapter 12: Marketing Your House
Advertising That Works
Arranging Open Houses
Showing Your Property
Chapter 13: Harnessing Your Computer for House Selling
Knowing the Internet’s Limitations: The Net Alone Can’t Sell Your House
Relying on Software and the Web to Determine Whether to Sell
Chapter 14: Negotiating Strategies for Sellers
Mastering Your Feelings
Following Some Basic Rules
Surviving the Bargaining Process
Negotiating from a Position of Strength
Negotiating from a Position of Weakness
Distinguishing Real Buyers from Fakes
Chapter 15: It Ain’t Over ‘til the Check Clears
Entering the Neutral Territory of an Escrow
Letting Go of Your House
Surviving Seller’s Remorse or (Gasp) the Double Whammy
Chapter 16: Income Tax Filings after the Sale
Profits from a House Sale
Tax Filings Required after the Sale
Part V: The Part of Tens
Chapter 17: Ten Things to Do After You Sell
Keep Copies of the Closing and Settlement Papers
Keep Proof of Improvements and Prior Purchases
Stash Your Cash in a Good Money Market Fund
Double-check the Tax Rules for Excluding Tax on Profits
Cast a Broad Net When You Consider Your Next Home
Remember That Renting Can Be a Fine Strategy
Reevaluate Your Personal Finances When Things Change
Don’t Simply Rehire Your Listing Agent When You Repurchase
Think through Your Next Down Payment
Remember to Send Change of Address Notices
Chapter 18: Ten Tips for Selling Rental Real Estate
Don’t Inadvertently Convert Your House into Income Property
Exercise Extra Care When You Sell Rental Property
Know How to Defer Your Investment Property Profits
Understand Your Local Market to Time Your Sale
Understand Opportunities for Adding Value
Maximize Your Property’s Income
Minimize Your Property’s Expenses
Utilize Agents with Investment Property Experience
Visit Comparables and Review the Valuation Analysis
Work with Rental-Property-Experienced Tax and Legal Advisors
Chapter 19: Ten Questions Home Buyers May Ask and How to Answer ’Em
What Do You Like Best and Least about Living Here?
Why Are You Selling This Lovely House?
How Much Did You Pay for This House?
How Did You Establish the Asking Price?
Have You Received Inspection Reports?
May I See Your Written Defect Disclosure Statement?
Are There Any Neighborhood Changes that May Affect the Home’s Desirability?
How Many Times in the Last Year Have You Called the Police and Why?
What Problems Have You Had with the House?
What Are the Local Public Schools Like?
Part VI: Appendixes
Appendix A: Sample Real Estate Purchase Contract
Appendix B: Example of a Good Inspection Report
Appendix C: Glossary
: Further Reading
Introduction
Welcome to House Selling For Dummies, 3rd Edition,the completely updated companion to Home Buying For Dummies (also in its 3rd Edition), the #1 bestselling real estate book (that we also happened to write). If you’re like most people, your biggest investment is your house. Sell your house wisely and you not only save yourself loads of time, but you also pocket thousands — if not tens of thousands — of dollars more than you would otherwise. Making a big mistake in the sale of your house, on the other hand, can easily cost you additional weeks — perhaps even months — of work and headache, as well as half a year’s worth (or more) of your take-home income.
One of Ray’s treasures is a well-worn fortune cookie message that says, “A wise person knows everything. A shrewd person knows everyone.” We apply that same principle to house sales. Real estate is a team sport. In this book, we show you how to put together a winning team, and we alert you to key points to consider throughout your sale. Follow our advice and your house is as good as sold before the For Sale sign even goes up.
We don’t care about whether you decide to sell your house or how much of the transaction you attempt to handle yourself. It’s not that we’re insensitive; we simply don’t have a vested interest in the sale of your house. What we do care very deeply about is that you make the best possible decisions for your situation. If those decisions mean staying in your current home instead of selling, or if they mean selling through a good local real estate agent, that’s terrific. We wrote this book to help you avoid making mistakes in your selling decisions and to ensure that you sell your house in the best way possible.
The Eric Tyson/Ray Brown Difference
We’ve received great accolades from the prior editions of this book and for Home Buying For Dummies.House Selling For Dummies fills a void for house sellers: It’s a user-friendly book totally oriented to your needs as a seller.
If you’ve visited your local library or bought books on selling your home, you may be familiar with the shortcomings of most house-selling books. In writing this book, we attempt to avoid those shortcomings. Thus, we expect that you’ll find that our book is
Holistic: No one sells a house just for the sake of selling it. Selling a house creates tax and financial ramifications, particularly if you’re selling to buy a more expensive home, relocating to a different part of the country, or retiring. Most other house-selling books, however, don’t help you consider these bigger-picture issues of personal finance before you sell. In Part I, we come right out and tell you that some people who are thinking about selling their current homes shouldn’t.
Educational: Most house-selling books are written by real estate agents or their firms. Such books are long on singing the praises of real estate agents but short on specific advice, helpful tips, and caution signs. That’s why many of those other books are less than 200 pages long. The authors aren’t interested in sharing the innermost secrets of selling real estate; they’re more interested in promoting their own business by convincing you to use a real estate agent. We wrote this book first and foremost to educate you. (Of course, if we end up making a few bucks for ourselves in the process, we won’t complain.)
Jargon-free: One of the hallmarks of books written more to confuse the reader than to convey information is the use of all sorts of insider terms that make things sound more mysterious and complicated than they really are. In this book, we try to keep everything in plain English. We even include a glossary, just in case you do encounter a term that appears to be Greek or Latin to you!
Conventions Used in This Book
When writing this book, we included some general conventions that all For Dummies books use. We use the following:
Italic: We italicize any words you may not be familiar with and provide a definition.
Boldface type: We bold all keywords in bulleted lists and the actual steps in numbered lists.
Monofont: All Web sites and e-mail addresses appear in monofont.
Foolish Assumptions
We’re not trying to scare you — quite the contrary. We just want to make it clear that, even though selling your house isn’t brain surgery, you can easily make mistakes, especially if you’re overconfident or do a poor job selecting people to work with in the transaction. When we wrote this book, we made a few assumptions about you.
You’re humble: You realize that you aren’t a house-selling expert.
You’re smart: Even though you’re not an expert, you realize the value of getting as much information as you can. This trait bodes well for your upcoming experience in selling real estate.
Although you’re likely to hire some professionals to help you sell your house, you still need to educate yourself about all aspects of the transaction. Why?
You’re the one who ultimately must make the decision about whether or not, and when, to sell your house. No real estate agent, loan broker, or anyone else who has a vested interest in the sale can objectively advise you about whether you should sell your house or when is the best time for you to sell.
You’re the one (if you do decide to sell) who must interview and hire competent and affordable people who can help you with the sale. You need to know what all the people you hire do, why they do it, what to expect from them, and what they expect from you.
Oscar Wilde said, “Experience is the name everyone gives to their mistakes.” We want to add a corollary to this observation: “Learning from other people’s mistakes is infinitely better than learning from your own.” House Selling For Dummies saves you money, time, and heartache — but only if you read it!
How This Book Is Organized
Perhaps you’re sure that you want to sell your house. On the other hand, maybe you (like many people each year who contemplate a sale) aren’t sure whether you can or should sell. If you do decide to sell your house, you must face the hard work of picking the best time to sell, preparing your house for sale, choosing the best people to help you sell, and closing the deal. And, even after the deal is done, you’re sure to have questions and unresolved issues. House Selling For Dummies covers everything you need to know.
Part I: The Selling Decision
Even if you think that you can or must sell, consider the big picture before you take action. This book starts with the premise that many important factors — financial and personal — should fall into place before you decide to sell your house. For example, how do you know if you can really afford to sell your house and buy another home if you haven’t yet considered your overall financial situation and goals? Without taking stock of important financial and personal issues, you’re simply guessing, or hoping, that selling is financially feasible and the right thing to do.
One element of the decision to sell hinges on the financial ramifications of selling. Amazingly, most people crunch few, if any, numbers before they decide to sell their home. Or they leave the financial analysis to a salesperson with a vested interest in the house-selling transaction. We explain that you don’t need a PhD in quantum physics or even an interest in mathematics to make some simple, yet powerful, financial assessments before you sell. We also help you understand the pros and cons of lending money to the buyer of your humble abode.
Part II: Tactical Considerations
In this part, we assume that you’ve already made the decision to sell your house. Now you’re ready to tackle important selling decisions, such as when to put your house on the market. Because most house sellers buy another home to replace the one they’re leaving behind, we walk you through the logistical considerations of whether you should sell your current house before buying the next one or purchase your next home before cutting the cord to your current house.
This part also covers all the issues relating to how you’re going to get your house sold. Are you going to try selling it yourself, or are you going to hire a real estate agent? We also explain the other players that you may want or need to include on your house-selling team, and we tell you how to choose the best people in their respective fields. Finally, if you’ve chosen to sell your house through a real estate agent, we walk you through the all-important listing contract that you complete with the agent and his or her firm, and explain the best ways to negotiate the commission for the sale of your house.
Part III: Getting Top Dollar When You Sell
Before you actually put your house on the market, read all our best tips for preparing your property to look appealing to prospective buyers (and real estate agents that many of them work with). Next comes the critical decision of determining the asking price for your house. Just as Goldilocks was looking for a bowl of porridge that was the right temperature, you don’t want to over-price or under-price your home; you want to price it just right. In this part, we show you how.
Part IV: The Brass Tacks of Getting Your House Sold
After you price your house and put it on the market, the actual marketing of the property begins. In this part, we review different marketing methods and then explain how to choose those strategies that are best for your property. If you follow our advice up to this point in the book, you can bet that an offer or two will come rolling in before you know it.
Although you’ve probably never aspired to be Secretary of State, you (and your agent, if you’re working with one) do need to know how to keep your composure and use proven negotiating tactics to get what you want and make the buyers of your house feel good about the deal they’re getting. We also guide you through the final steps of your sale, including the escrow process and the money transfer. And, last but not least, we walk you through the unavoidable tax hoops you need to jump through when you sell your house.
Part V: The Part of Tens
This part provides counsel and advice on shorter topics that seem to stand alone well. Here, we explain ten important things to remember to do after your house sale is complete, our top ten tips for successfully selling rental real estate, and how to handle ten difficult questions you may be asked about selling your house. If you have a short attention span, or if you like the feeling you get from completing chapters, this part’s for you!
Part VI: Appendixes
Appendixes are typically a tad dull and probably aren’t the first thing you want to read in a book. On the other hand, the appendixes in this book include examples of important documents that can help enhance your house-selling knowledge. In this part, we provide an example of a premarketing inspection report and a real estate purchase contract and receipt for deposit. Finally, we include a handy glossary to define real estate terms that often sound like Pig Latin, unless you happen to sell real estate for a living (in which case, they probably sound very sensible).
Icons Used in This Book
Just as you use tasty seasonings in your favorite recipes, we’ve sprinkled helpful icons throughout this book to draw attention to key points or to denote stuff that you can skip over.
This icon flags key strategies that can improve your real estate deal and, in some cases, save you mounds of moola. Think of these icons as pointing out little words of wisdom that we would whisper in your ear if we were close enough to do so.
Numerous booby-traps await novices as well as experienced house sellers. This explosive symbol marks those mines and tells you how to sidestep them.
Occasionally, we suggest that you do more research or homework. Don’t worry; we tell you exactly how to go about your investigation.
Unfortunately, as is the case in all realms of the business world, some people and companies are more interested in short-term profits than in meeting your needs and addressing your concerns. This icon highlights places in a house-selling transaction where sharks may be swimming and points to advice on avoiding such scoundrels.
To ensure that you don’t forget important points, this icon serves as your little reminder, like a string tied around your finger.
This icon marks stuff that you don’t really have to know, but that may come in handy at cocktail parties thrown by people in the real estate business.
This icon points out the best resources and techniques for selling your property faster, more profitably, and with less hassle.
Where to Go from Here
You don’t need to read this book cover to cover. But if you’re a beginner or you want to fully immerse yourself in the world of house selling, go for it! However, you may have a specific question or two today and want some other information tomorrow. No problem there, either. House Selling For Dummies, 3rd Edition, is lighter on its feet and easier to use than other house selling reference books. Use the Table of Contents or the Index to speed your way toward what you need to know and get on with your life.
Part I
The Selling Decision
In this part . . .
We help you tackle the big-picture issues that you must face before selling your house. To begin with, we ask you to consider whether you should even sell your house in the first place. Do you need to sell or do you just want to sell? Wanting to sell isn’t a bad thing, but selling and moving can wreak havoc with your pocketbook if you don’t first study the financial ramifications. We walk you through your options and assist you with making the selling decision.
And before you sell your house, you need to figure out how much you’ll net from the transaction. Unless you’re quite affluent, you’re going to need to know how much money to put toward your next place, your retirement nest egg, or whatever else you envision doing with the proceeds. We tell you how to come up with an accurate estimate, not a “guesstimate.” We also encourage you to think through another important issue before you put up your For Sale sign: Are you interested, willing, and able to provide financing to a prospective buyer of your house?
Chapter 1
Deciding to Sell
In This Chapter
Making the choice: To sell or not to sell
Selling in weak and strong housing markets
Selling your house and moving can be an enjoyable (not to mention profitable) experience. Unfortunately, for most people, it isn’t. Selling a house not only introduces financial turmoil into most people’s lives but also causes them stress.
One goal of this book is to help you make the right decision about whether to sell your house. If you do decide to sell, we want to make sure that you get as many dollars and as few upset stomachs from the sale as possible.
The reasons people want to sell their houses are almost as varied as the houses themselves. Here are some of the common, not-so common, and downright bizarre reasons:
Additional debt burden because of layoff, medical expenses, disability, or overspending
Bad vibes or bad luck associated with house
Better job opportunities elsewhere
Diminished space requirements now that children are grown
House located in a flood, earthquake, or other disaster zone
Increased space requirements for expanding family
Lack of garage
Neighborhood conditions incompatible with socioeconomic status
Noisy neighborhood
Noisy/messy/obnoxious family or business moved next door
Recent death of spouse
Recent marriage or divorce
Serious house defects (such as radon or termites) that owners don’t want to fix
Unfriendly neighbors
Unsafe neighborhood
Unsatisfactory neighborhood shopping
Unsatisfactory school district
Unsuitable climate
As you can see from this partial list, most of the reasons why people have a desire to sell their houses are based on wants, not needs. In the United States, we sometimes take for granted how economically fortunate we are.
You don’t need to move because your neighborhood is too noisy or because your house seems too small. You don’t need to move because the weather in your area isn’t nice enough. You don’t need to live on quieter, tree-lined streets.
All these features are things people want, not things they need. And people who think that they can afford to pay for such things usually get more of what they want. Sometimes, however, people spend money moving and, ironically, still don’t get what they want. The weather in the new locale may not be terrific, the neighbors may not be friendly and quiet, and the schools may not turn children into stellar students. You may move to get away from particular problems and then find yourself facing a new set of different problems.
We’re certainly not going to tell you how and where to spend your money — that’s your choice. However, we definitely want you to make the most of your money. Unless you’re one of the few who has far more money than you can ever possibly spend, we suggest that you prioritize the demands on your money to accomplish your most important financial goals.
Nothing’s wrong with spending money to trade in one house for another, but before you set those wheels in motion, think about the impact of that kind of spending on other aspects of your life. The more that you spend on housing, the less you’ll have for your other goals, such as saving for retirement, taking annual vacations, and spending less time working and more time with your family and friends.
Figuring Out if You Really Need to Sell
Although spending your entire life in the first home you buy is an unlikely prospect, some people do end up living in the same home for 10, 20, even 30 or more years. Ray (humble coauthor of this book), for example, lived in his home nearly 30 years. Ray’s no fool; staying put must have its advantages.
If, like most prospective house sellers, you have a choice between staying put and selling, not selling has clear advantages. Selling your house and then buying another one takes a great deal of legwork and research time on your part. Whether you sell your house yourself or hire an agent, you’re going to be heavily involved in getting your house ready for sale and keeping it pristine while it’s on the market.
In addition to time, selling your house and buying another one can cost serious money. Between real estate commissions, loan fees, title insurance, transfer tax, and myriad other costs of selling your house and then buying another one, you can easily spend 15 percent or more of the value of the property that you’re selling (see bar on the left in Figure 1-1).
Fifteen percent sounds like a lot, doesn’t it? Well, consider this: Unless you own your house free and clear of any mortgage debt, your transaction costs are going to gobble up an even larger percentage of the money you’ve invested in your home.
Figure 1-1: Trading homes can cost you big bucks.
Check out this scenario: You’re thinking about selling your $240,000 house. If selling your house and buying another one costs you 15 percent of the first house’s value, then you’re taking $36,000 out of your sale proceeds. However, if you happen to owe $180,000 on your mortgage, your equity in the home — the difference between the amount the house is worth ($240,000) and the amount you owe ($180,000) — is $60,000. Therefore, the $36,000 in transaction costs devours a huge 60 percent of your equity (see bar on the right in Figure 1-1). Ouch!
Before spending that much of your hard-earned money, make sure that you give careful thought and consideration to why you want to sell, the financial consequences of selling, and the alternatives to selling. In Chapters 2 and 3, we walk you through the personal financial issues that you need to weigh when contemplating the sale of your current house. But before we get to the numbers, consider the qualitative issues.
Good reasons to stay
Whereas some people have clear and compelling reasons for selling their homes, others do so for the wrong reasons. You don’t want to make the financially painful mistake of selling if you don’t have to or can’t afford to.
The following sections offer reasons why you may be better off staying right where you are.
You’re already having trouble living within your means
If you’re having difficulty making ends meet, and you use high-interest consumer credit, such as credit cards or auto loans, to maintain your desired standard of living, you shouldn’t spend more money on housing. Even if you’re planning to trade your current house for one of comparable value, you may not be able to afford all the transaction costs of selling and buying.
Even if you aren’t a consumer-debt user and you’re saving a comfortable portion (10 percent or more) of your current earnings, don’t assume that you can afford to trade up to a more expensive home. In addition to a higher mortgage payment, you may also face increased property taxes, insurance rates, and home maintenance costs.
A mortgage lender may be willing to finance a loan that enables you to trade up to a more expensive home, but qualifying for a loan doesn’t mean that you can afford that home. Mortgage lenders use simplistic formulas, based primarily on your income, to determine the amount they’re willing to lend you. Mortgage lenders don’t know (or care) how far behind you are in saving for your retirement or how many children you must help with college costs or how much assistance you want or need to give to elderly parents.
Mortgage lenders are concerned about protecting their interests in the event that you default on your mortgage. As long as you meet a few minimal financial requirements (you make a sufficient down payment, and your housing expenses are less than a certain percentage of your income), the mortgage lenders can sell your loan with the backing of a government mortgage agency, effectively wiping their hands clean of you and your problems.
If you’re thinking about trading in your current house for another one, especially for a more expensive one, you absolutely, positively must consider the financial repercussions of changed housing expenses in addition to the costs of buying and selling. We cover these important issues in Chapters 2 and 3.
The problems are more in your perceptions
Everybody, at some point, leaps to conclusions based on faulty assumptions or incomplete research in virtually all aspects their lives. Peter, for example, was a single parent living with his son in a nice neighborhood in an urban environment. When his son started junior high school, Peter grew increasingly concerned with the possibility that his son would become involved with drugs, which seemed to be so prevalent in their city.
Despite working in the city, Peter decided to move to an easygoing, suburban community about 45 minutes outside the city. Shortly after the move, Peter’s son got mixed up with drugs anyway — perhaps, in part, because the long daily commute meant that Peter was around even less.
In addition to ignoring lifestyle issues (such as the length of his commute), Peter made a common human mistake — he assumed that things were a particular way without getting the facts. The reality was that the suburban community to which Peter moved had as many problems with teenagers on drugs as the good neighborhoods in his former city.
Crime and safety make up another common realm where people have misconceptions. Some communities often make the evening news with graphic stories and film footage of crimes. Statistically, however, most crimes committed in a given city or town occur in fairly small geographic areas. Local police departments tabulate neighborhood crime rates. If you’re concerned about crime and safety, don’t guess; get the facts by calling your local police department and asking them how to obtain the data.
Schools are another hot-button issue. In some areas, people make blanket statements condemning all public schools. They also insist that if you live in such-and-such town or city, you must send your children to private school if you want them to get a good education. The reality, as education experts (and good old-fashioned common sense) suggest, is that you can find good and bad public schools and good and bad private schools. You also need to evaluate if you’re spending too many hours working and commuting just so you can make expensive school payments. If that’s the case, you may not be able to spend adequate time with your children. The best possible teacher for your children is you.
Selling won’t solve the problem(s)
Avoiding problems is another human tendency. That’s what Fred and Ethel tried to do. Much to their chagrin, Fred and Ethel discovered that their home had two not-so-visible but, unfortunately, costly-to-fix problems. The new roof they needed was going to cost big bucks, because local ordinances required the removal of several layers of existing roofing material when a new roof was installed. Fred and Ethel also had recently found out that their house contained asbestos, a known carcinogen.
Rather than research and deal with these problems, Fred and Ethel decided that the easiest solution was to sell their house and buy another one in a nearby town where they thought they’d be happy. They then attempted to sell their home without disclosing these known defects — a major legal no-no, as we point out in Chapter 8 — but were tripped up by smart buyers who found out about the problems from inspectors they hired to check out the property.
Actually, the prospective buyers did Fred and Ethel two big favors:
By uncovering the problems early, the buyers saved Fred and Ethel from a costly lawsuit that could easily have resulted if the flaws were discovered after the house was sold.
By ultimately deciding to hold onto their home, which they otherwise were content with, Fred and Ethel saved themselves thousands of dollars in selling and buying transaction costs. Those savings more than paid for the cost of a new roof. And Fred and Ethel discovered that, because the asbestos was in good condition and properly contained, it was best left alone.
You can fix some or all the problems
When they realized that they couldn’t run from their home’s problems, Fred and Ethel, discussed in the preceding section, discovered how to get those problems fixed. You can address quite a number of possible shortcomings in your home less expensively than buying a new home.
If you think that home improvement projects are going to be too expensive, do some rough calculations to determine the cost of selling your current house and then buying another. Remember, you can easily spend 15 percent of the house’s value on all the transaction costs of selling and then buying again.
Instead of trading houses, why not spend those transaction dollars on improving the home you currently own? Do you hate the carpeting and paint job? Get new carpets and repaint. If your home is a tad too small, consider adding on a room or two. Just be careful not to turn your home into a castle if all the surrounding houses are shacks. Overimproving your property can be an expensive mistake. By overimproving, we mean that after the improvements to your house, you’ll own the most expensive house on the block, and you’ll have difficulty recouping the cost of the improvements in the form of a higher house sale price.
Some people are seduced by the seeming better attributes of other houses on the market. If your house is small, larger ones seem more appealing. If you don’t like your carpeting, houses that have hardwood floors may attract you. However, as is true of long-term friends or spouses, you know your current home’s defects all too well because you’ve probably lived with them for years. Unless you’re incredibly observant, you surely didn’t know half your home’s faults and shortcomings before you moved in. The same is true of new homes you may be lusting after.
Some problems and defects are more easily fixed and more worth fixing than others. When you’re deciding whether to fix problems or move away from them, consider these important issues:
What’s the payback? Some home remodeling projects may actually pay for or come close to paying for themselves. We’re not suggesting that you can have the work done for free. However, certain remodeling projects do increase your home’s value by enough to make up for most or even all the cost of the improvement(s).
Generally speaking, projects that increase the cosmetic appeal or usability of living space tend to be more financially worthwhile than projects that don’t. For example, consider painting and recarpeting a home versus fixing its foundation. The former projects are visible and, if done well, enhance a home’s value; the latter project doesn’t add to the visible appeal of the home or usability of living space. If, however, you must do foundation repairs or the house will collapse, spend your money on the foundation.
If you decide to stay put and renovate or improve your current home, you’re going to need to find a way to pay for all that work. In Chapter 4, we discuss the way to figure out the amount you can afford to spend improving and how to actually finance your improvements. If you head down the renovation path, don’t forget that contracting work often ends up costing more than you (and your contractor) originally expected.
How intrusive will the work be? As you surely know, money isn’t everything. Six months into a home remodeling project that moves you out of your bedroom, spreads sawdust all over your kitchen table, and has you wanting to flee the country, the “payback” on the project doesn’t seem so important anymore. In addition to costing more than most parties expect, contracting work almost always takes longer than everyone expects.
Ask yourself and others who’ve endured similar projects: How much will this project disrupt my life? Your contract with the contractor should include financial penalties for not finishing on time.
Some problems or shortcomings of your current house simply can’t be fixed. If you’re tired of shoveling snow in the winter and dripping sweat in the summer, you’re not going to be able to change your local weather. If crime is indeed a big problem, you yourself aren’t going to be able to cut area crime anytime soon. Moving may be the best solution.
Reasons to consider selling
If you’re in a situation where you really need to sell, as opposed to wanting to sell, by all means put your house on the market. And if you want to sell, and can afford to do so, you should go for it, as well. The following sections offer some solid reasons for selling.
You can afford to trade homes
Your desire to sell your current house and buy another one may be driven by a force as frivolous as sheer boredom. But if you can afford to sell and buy again, and you know what you’re getting into, why not?
Now, defining afford is important. By afford, we mean that you’ve identified your personal and financial goals and you’ve calculated that the cost of trading houses won’t compromise those goals.
Everyone has unique goals, but if you’re like most people, you probably don’t want to spend the rest of your life working full-time. To retire or semi-retire, you’re going to need to save quite a bit of money during your working years. If you haven’t yet crunched any numbers to see where you stand in terms of retirement saving, postpone major real estate decisions until you explore your financial future. In Chapter 2, we walk you through the important retirement planning considerations in selling your house, and in Chapter 3, we show you how to calculate the economics of selling and moving.
You need to move for your job
Some people find that at particular points in their lives they need to move to take advantage of a career opportunity. For example, if you want to be involved with technology companies, certain regions of the country offer far greater opportunities than others.
When you lack employment, paying bills is difficult, especially the costs involved in home ownership. If you’ve lost your job or your employer demands that you relocate to keep your job, you may feel a real need to move, especially in a sluggish economy.
Moving for a better job (or simply for a job) is a fine thing to do. However, some people fool themselves into believing that a higher-paying job or a move to an area with lower housing costs will put them on an easier financial street. As we discuss in Chapter 3, you must consider all the costs of living in a new area versus your current area before deciding that moving to a new community is financially wise.
And, although we don’t pretend to be career counselors, we want you to consider that you may be overlooking opportunities right in your own backyard. Just because your employer offers you a better job to get you to relocate doesn’t mean that you can’t bargain for a promotion and stay put geographically. Likewise, during an economic slowdown, if your employer says you must relocate or face downsizing, explore other employment options in your area, especially if you want to stay put.
Patience — not money — solves some problems
Some problems may solve themselves if you’re patient and willing to wait things out. For example, Eric (humble coauthor of this book) once lived a block away from a busy California freeway. Although adequate fencing and safety barriers separated the speeding cars on the highway from the neighborhood, the noise was a bit of a nuisance, especially during peak commute hours.
The longer Eric, who was raised in a quiet non-urban environment, lived in the home, the more the noise bugged him. Within several years of having bought the home, however, the problem was solved. Expansion of the freeway forced the state to add sound walls, which greatly dampened the noise and enhanced home values in the area.
You’re having (or will have) financial trouble
Sometimes, people fall on difficult financial times because of an unexpected event. Check out these two scenarios:
After Ryan graduated from college, he landed a good marketing job and seemed financially secure. So he bought a home. After a few years in the home, Ryan discovered that he had a chronic medical problem.
Ultimately, Ryan decided to go into a lower-stress job and work part time. As a result, his income significantly decreased while his medical expenses increased. He no longer could afford his home. It made sense for Ryan to sell his house and move into lower-cost housing that better addressed his reduced mobility.
When Teri and her husband bought a home, they were both holding down high-paying jobs. Unfortunately, two years later, Teri discovered that her husband had an affair. After much marital counseling and many attempts to get their marriage on a better track, Teri and her husband divorced. Because neither of them alone could afford the costs of the house, Teri and her husband needed to sell.
