Selling Your House FAQ

Tips for selling your house: setting the right price, timing the sale, and hiring an agent.

Will I owe taxes when I sell my house?

Thanks to the Taxpayer Relief Act of 1997, many home sellers no longer owe taxes on the gain they make when they sell their houses. Married taxpayers who file jointly now get to keep, tax-free, up to $500,000 in gain on the sale of their home, as long as they lived in it for two of the prior five years. Single folks and married taxpayers who file separately get to keep up to $250,000.

If you're lucky enough that your profits on the house exceed this amount, don't panic quite yet -- not all of it may be taxable gain, for example if you invested in home improvements. (See Nolo's article Tax Breaks for Selling Your Home.)

When will I meet my prospective home buyers?

If you use a real estate agent to sell your home, you probably won't meet your buyers until after the closing -- if then. Your agent (or the buyer's agent) will handle visits to the house by potential buyers and probably encourage you to make yourself scarce during those visits lest you blurt out something you regret later.

You may meet your buyers' real estate agents if they choose to formally present purchase offers to you and your agents. You may even be handed photos of the prospective buyers, and personal letters, if they're in a competitive bidding situation. And you can certainly find out their names from the purchase offer forms, in case you'd like to Google them later. But that's still not a personal meeting.

Even closings are often done separately, with you meeting with the escrow agent on one day to sign documents and the buyer doing so on another day.

It's not that there's any law against meeting the buyers -- but you'll probably appreciate, at various times along the way, having your agent serve as a buffer in any negotiations and be the bearer of bad news, if need be.

After the closing, however, arranging a time to meet with the buyers at your house can be a nice gesture -- and a good opportunity to show them things like how to turn on the furnace, turn off the security alarm, and which plants are weeds.

What will I need to leave behind in the house after it's sold?

It's important to prepare in advance for buyers' expectations about what you'll leave behind. As a general rule, you'll be expected to leave behind all "fixtures," defined in most states as things that are affixed, fastened to, or an integral part of the home or landscaping. For example, lights and their shades (the sort that can't be unplugged and carried away), built-in dishwashers and other appliances, window shades, curtain rods (and sometimes the curtains), built-in bookshelves, and all trees, plants, and shrubs with their roots in the ground instead of in pots are all normally considered fixtures. No matter how good they make the house look, if you don't want the buyer to keep them, replace them before you start showing the house.

Also realize that buyers may associate some items that aren't technically fixtures so strongly with your house that they won't be happy at you carrying them off -- for example, a backyard statue that's so perfectly placed in the center of a brick circle that you'd think it was a permanent part of the landscaping. The buyer may name such items in the purchase offer to make sure you leave them behind (or to start negotiations over them) -- or may assume they come with the house and raise a fuss on closing day when they've been moved. Take a good look at what you plan to move. If anything falls into the category of "A buyer may fall in love with this and assume it comes with the house," decide now whether to move it before the sale or to buy a replacement.

How much should I fix up the house before selling it?

Home buyers ' fascination with fixer-uppers seems to be on the wane. Even if it costs more, home buyers are increasingly looking for a home that's move-in ready. So where does that leave you, as the home seller?

Paying more money just to get money out of your home may be the last thing you were hoping to take on (or have the cash to complete). Nevertheless, some investment may be necessary in order to attract buyer attention.

At a minimum, you 'll want to fix obvious eyesores and danger spots, such as cracked windowpanes, tiles, and plaster. Correct high-priority issues like moisture leakage or rickety stairs. Walk around your house with a critical eye, noticing areas where you 've always meant to deal with a problem – such as a light switch that doesn 't work or a window shade that 's lost its pull string -- but haven 't gotten around to it.

After that, a new paint job is one of the more affordable ways to give a house a fresh look. If painting the exterior is more than you can afford, consider at least painting the front door, and possibly the trim.

Simple cosmetic touch-ups can give your house a more cared-for look – all the way up to a major staging job, as described in "Is Hiring a Home Stager Worth the Cost? "

Of course, we 're dancing around the big issue here, which is what if the kitchen, bathroom, or somewhere else is just crying out for a remodel? You may have already noticed, from reading the real estate ads, that the agents never fail to mention "newly remodeled kitchen. " You 'll need to proceed with caution. The worst possible result is to pour money into a remodel that buyers don 't like and plan to rip out anyway. For tips on how to plan a remodel that will recoup its costs and then some, see "Do Home Improvements Really Add Value? "

Should I sell my house now?

If you can choose when to sell, it's best to wait until your local real estate market is "hot," or a "sellers' market." This can occur on a very local basis, regardless of what's common across the United States. The heat of a market can usually be gauged numerically, because the number of available homes drops well below the number of buyers wanting them. Here are some other indicators that the market is good for sellers:

  • Mortgage interest rates are low, allowing buyers to finance larger mortgages.
  • The economic climate of your region is healthy, and people feel confident about the future.
  • There's a jump in house buying activity, as often occurs in the spring.
  • Your area is considered especially attractive -- because of the schools, low crime rate, weather, affordability of starter homes, proximity to a major city, or other factors such as employment opportunities.

Of course, not everyone gets to choose when to sell. If the market is down and you have to move immediately -- for example, because of financial reasons, a divorce, a job move, or an imperative health concern -- and you don't have any of the advantages listed above, you may have to settle for a lower price in order to make a quick sale.

How do I attract multiple bidders when selling my home?

Here are some ways to bring in the crowds, and up the chances that you'll bring in a maximum return for your property.

Know the local real estate market

You can't control whether your property is within a region that has a "hot" or "seller's market" (with more interested buyers than available properties) or a "buyer's market" (the reverse). But you can respond to the market with your pricing and marketing strategy.

In a hot seller's market, it's said that homes practically sell themselves. But that's not entirely true. Hordes of eager buyers tend to focus on the "it" houses being shown one week, and might overlook others. Clearly, you want to make your house the one that everyone is flocking to (as discussed below).

In a buyer's market, you'll have more of a challenge inspiring multiple offers. But the steps described here can help you at least bring in one or more.

Set your home listing price strategically

Before a buyer can become interested in making an offer on your home, that buyer has to become interested in looking at more online pictures of, or setting foot inside the home. Price is a key element in making sure buyers do that.

In a seller's market, it's often wise to set your price below the amount you know you could sell it for. How far below? Enough that it puts you into a different tier of online searches (which filter based on price, among other factors), but not so much that people wonder about hidden flaws. Your real estate agent can help you arrive at an exact dollar amount.

In a buyer's market, listing your house closer to it's "real" value is usually wise. You are not in the power position, and don't want to give away too much too soon. Again, your agent can help with this decision.

Make your home move-in ready

More and more buyers want homes they won't have to fix up and fuss over before starting to live there. To the extent you can afford it, make sure it's clean, in good repair, and up to date.

For information on the types of home improvements most likely to impress buyers, see Do Home Improvements Add Value?

Market your home to a wide audience

If a lot of people know your house is for sale, that maximizes the chances of people becoming interested enough to bid; or telling their friends about the place. Your real estate agent should take the lead on marketing, for example by commissioning professional photos of the home, creating a website for it, listing it on the Multiple Listing Service (MLS) and the real estate agency website, holding open houses for buyers and brokers, and sending postcards about the sale to neighbors and more.

You have a role to play, too. It starts with being a team player in the process of cleaning your house in preparation for photos and showings, and keeping it tidy, arranging for pet care during open houses, and so on. If you've chosen a good agent, you should feel confident in that person's suggestions about decor, hiring a stager, and more.

Your agent should also listen to and possibly help with your own marketing suggestions, for example if you wish to hold an open house/party just for friends and neighbors. And you can spread the word informally, via your social media accounts, on your neighborhood "NextDoor" or equivalent service, when you visit local service providers, and so on.

Hire an experienced agent who knows how to manage a bidding war

There's an art to managing a bidding war. The real estate agent will need to stir up excitement before bids even come in, for example by dropping hints about the level of interest without revealing too much and breaching buyers' confidentiality.

The agent will need to be organized enough to handle any required pre-offer paperwork and get it into the many buyers' agents hands, and follow up if they make last-minute inquiries to see whether it's worth putting in an offer on your house at all.

The agent will also need to be smart about setting a deadline for receiving offers and scheduling buyers' agents to make those offers in person, which is often done during a single stretch of time.

All of this takes skill, experience, and a certain maturity with regard to relationships with other agents. Choose your agent well. And with a bunch of offers on the table, you'll definitely want the agent's help in deciding whether to accept the highest-price offer or look at other criteria.

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