Selling Your House For Dummies

Eric Tyson, MBA, is the author of Investing For Dummies, Personal Finance For Dummies, and Investing in Your 20s and 30s For Dummies. Ray Brown, a real estate professional for more than 40 years, is the best-selling co-author of Home Buying For Dummies.

• Introduction 1How This Book Is Different: The Eric Tyson/Ray Brown Difference 1Foolish Assumptions 2Icons Used in This Book 3Beyond the Book 4Where to Go from Here 4Part 1: Getting Started with Selling Your House 5Chapter 1: Deciding to Sell 7Figuring Out If You Really Need to Sell 9Good reasons to stay 10Reasons to consider selling 15Knowing the Health of Your Housing Market 17Selling in a depressed housing market 17Selling during a strong market 21Chapter 2: Selling and Your Personal Finances 23Trading Up 23Examining your housing budget 24Figuring your expected expenses after trading up 27Determining the financial impact on your future goals 31Exploring the other costs of trading up 31Making Retirement Housing Decisions 32Trading down 32Researching reverse mortgages 38Tax Facts Sellers and Landlords Ought to Know 43Chapter 3: Exploring the Economics of Selling 45Estimating Proceeds of Sale 46Estimated sale price 46Closing costs 47Mortgage payoff 48Moving expenses 50Putting it all together 51Assessing the Financial Feasibility of a Move 52Researching living costs and employment opportunities 52Avoiding relocation traps 54Chapter 4: Confronting Financing Issues 57Financing Decisions When Trading Up 58Choosing your mortgage 58Financing improvements 59The Trials and Tribulations of Seller Financing 61Asking yourself why you’d ever want to be a lender 62Deciding if seller financing is for you 63Finding creditworthy buyers 64Deciding what to charge 72Protecting yourself legally 73Part 2: Tactical Considerations 75Chapter 5: Timing Is Everything 77Timing the Sale of Your House 77First peak season: Spring flowers and For Sale signs bloom 79First valley: Summer doldrums 79Second peak season: Autumn leaves and houses of every color 80Death Valley: Real estate activity hibernates until spring 82The Seller’s Quandary: Timing the Purchase of Your Home 82Consolidating Your Sale and Purchase 83Determine your house’s current value 83Check your buying power 84Familiarize yourself with the market 85Take action 86Chapter 6: For Sale By Owner 89Eyeing the Potential FSBO Advantages 89You want to save money on commissions 90You may already have a ready, willing, and able buyer 90You may know the house and neighborhood well 91You may be more motivated than an agent 91You like challenges 92You want to be in control 93Your house may sell itself 93Focusing on Potential FSBO Disadvantages 93You may not know how to price property 93You may not know how to prepare your house for sale 94You may not know how to market your property 94You may not know how to separate real buyers from fakes 94You may not have enough experience as a negotiator 95You may get yourself into legal trouble 95You may not know how to close the sale 95Increasing Your Chances of Success 96Educate yourself 96Ensure that other team members are especially strong 96Cooperate with agents 97Financially qualify prospective buyers 97Chapter 7: Your Real Estate Team 99Teaming Up — A Winning Concept 99Landing the Perfect Listing Agent 101Understanding agent relationships 102Recognizing the best listing agents 104Choosing your listing agent 105Achieving top performance from the winner 112Bringing in the Broker 113Handling House Inspectors 114Arranging premarketing property inspections 114Exploring the advantages of inspecting before marketing 115Investigating inspectors 117The Officiating Escrow Officer 120Finding Financial and Tax Advisors 121Locating a Good Lawyer 122Choosing among lawyers 123Working well with your lawyer 124Chapter 8: Listing Contracts and Commissions 125Understanding Listing Contracts 125Considering the Types of Listings 127Exclusive listings 127Open listings 137Examining Broker Compensation 139Commissions 139Net listings 144Discount brokers 145Preparing Seller Disclosure Statements 147What information should you disclose? 147An ounce of prevention is worth a pound of cure 152Part 3: Getting Top Dollar When You Sell 155Chapter 9: Preparing Your House for Sale 157Handling Presale Preparation 158Creating curb appeal 158Exteriors attract, but interiors sell 160Staging 162Think Again: Avoiding Major Improvements 165Chapter 10: Determining Your House’s Value 167Defining Cost, Price, and Value 168Value is elusive 168Cost is history 169Price is the here and now 170Determining Fair Market Value (FMV) 170Need-based pricing isn’t FMV 171Median prices aren’t FMV 171Using a Comparable Market Analysis 173Playing with the numbers 176Interpreting CMA adjustments and flaws 177Considering appraisals versus CMAs 179Bidding Wars 180How buyers and sellers get to FMV 180Why “buying a listing” ruins property pricing 181Chapter 11: Price It Right and Buyers Will Come 183Getting a Grasp on Pricing Methods 184Four-phase pricing: Prevalent but ineffective 184Pleasure-pleasure-panic pricing: Fast, top-dollar sales 185Quantum pricing: An effective technique 188Identifying Incentives and Gimmicks 190Deal-making incentives 191Deceptive gimmicks 191Overpricing Your House 192Can’t sell versus won’t sell 193Three factors all buyers consider 193Danger signs of overpricing 194The foolproof way to correct overpricing 195Placing the blame where it belongs 197Part 4: the Brass Tacks of Selling Your House 199Chapter 12: Marketing Your House 201Advertising That Works 201For Sale sign 202Classified ads 203Multiple listing service (MLS) 206Listing statement 207Computers 208Word of mouth 208Arranging Open Houses 209Brokers’ opens 210Weekend open houses 210Showing Your Property 211Preshowing preparations 212The final showing 213Chapter 13: Using Technology to Sell Your House 215Sell Your House 216Ensure good web promo of your house 216Knowing the truth about for-sale-by-owner (FSBO) sites 217Realize the limits of valuing your house online 219Relying on Technology to Determine Whether to Sell 220Chapter 14: Negotiating Strategies for Sellers 223Mastering Your Feelings 224Putting emotions in their place 225Gaining detachment through an agent 226Following Some Basic Rules 227Surviving the Bargaining Process 227Receiving an offer to purchase 229Dealing with contingencies — necessary uncertainty 231Making a counteroffer 232Negotiating from a Position of Strength 236Handling multiple offers 237Delaying presentation of offers 237Setting guidelines for an orderly presentation process 238Selecting the best offer 239Negotiating from a Position of Weakness 241Rejecting lowball offers 242Considering other offers usually made in weak markets 244Negotiating credits in escrow 247Distinguishing Real Buyers from Fakes 251Are the buyers creditworthy? 252Are the buyers realistic? 252Are the buyers motivated? 252Do the buyers have a time frame? 252Are the buyers cooperative? 253Chapter 15: It Ain’t Over ’til the Check Clears 255Entering the Neutral Territory of an Escrow 255Understanding the role of the escrow officer 256Maximizing your escrow 257Avoiding the curse of December escrows 261Letting Go of Your House 262Moving daze 263The final verification of condition 265Surviving Seller’s Remorse or (Gasp) the Dreaded Double Whammy 265Confronting your fears 266Facing the ultimate test 267Chapter 16: Income Tax Filings after the Sale 269Profits from a House Sale 269Defining profits 270Excluding house sale profits from tax 270Tax Filings Required after the Sale 271Schedule D: Capital Gains and Losses 272State income taxes on housing profits 275Part 5: the Part of Tens 277Chapter 17: Ten Things to Do After You Sell 279Keep Copies of the Closing and Settlement Papers 279Keep Proof of Improvements and Prior Purchases 280Stash Your Cash in a Good Money Market Fund 280Double-Check the Tax Rules for Excluding Tax on House Sale Profits 281Cast a Broad Net When You Consider Your Next Home 282Remember That Renting Can Be a Fine Strategy 282Reevaluate Your Personal Finances When Things Change 283Don’t Simply Rehire Your Listing Agent When You Repurchase 283Think Through Your Next Down Payment 284Remember to Send Change of Address Notices 284Chapter 18: Ten Tips for Selling Rental Real Estate 287Don’t Inadvertently Convert Your House into Income Property 287Exercise Extra Care When You Sell Rental Property 289Know How to Defer Your Investment Property Profits 289Understand Your Local Market to Time Your Sale 290Understand Opportunities for Adding Value 291Maximize Your Property’s Rental Income 292Minimize Your Property’s Expenses 292Utilize Agents with Investment Property Experience 293Visit Comparables and Review the Valuation Analysis 293Work with Tax and Legal Advisors Who Understand Rental Property 294Chapter 19: Answers for Ten Questions Home Buyers May Ask 295What Do You Like Best and Least about Living Here? 296Why Are You Selling This Lovely House? 296How Much Did You Pay for This House? 297How Did You Establish the Asking Price? 298Have You Received Inspection Reports? 298May I See Your Written Defect Disclosure Statement? 298Are There Any Neighborhood Changes That May Affect the Home’s Desirability? 299How Many Times in the Last Year Have You Called the Police and Why? 299What Problems Have You Had with the House? 300What Are the Local Public Schools Like? 301Part 6: Appendixes 303Appendix A: Sample Real Estate Purchase Contract 305Appendix B: Example of a Good Inspection Report 317Appendix C: Glossary 333Index 349