Ideally, if you're looking to call an agent, you should have the necessary financial considerations covered and be ready to show your home within weeks. This takes time, and depending on the shape of your home (and your finances), it could take a lot of time. First impressions are vital in real estate, so don't risk a weak entrance to the market. Before you consider who your agent will be, you need to cover the following steps. (For related reading, also take a look at 4 Key Factors That Drive The Real Estate Market.)
IN PICTURES: 7 Tips On Buying A Home In A Down Market
1. Get Pre-Approved for a Mortgage
Before you contract a real estate agent, your first step is to learn what mortgage options are available to you. Many factors affect the term, price and interest rate of your mortgage, and any one of these factors will determine the home you can afford.
Also note that being pre-qualified for a mortgage is not the same as being pre-approved. While both processes involve analyzing your debts, income and assets, only a pre-approval involves an official mortgage application. (To learn more on the difference between these two mortgage-preparation procedures, check out Pre-Qualified Vs. Pre-Approved - What's The Difference?)
2. Study the Market
The mortgage for which you are pre-approved will dictate the price-range of homes you should research. But if you are also selling, you will need to know the market for homes similar to yours in your area. Keep in mind that while you can research real estate ads online and in print, you will only learn the asking prices. A real estate agent will show you how long homes have been on the market, any price reductions, and most importantly, the closing prices.
While it's important to research the market, don't fall in love with any properties just yet. There's a strong chance that the property won't be around by the time you're ready to buy, especially if you have to sell your home first. Subject-to-sale offers - or as they say in the real estate industry, "yeah, but …" offers - have less chance of being accepted by a seller than an offer that has its finances in order.
Most of us have seen enough episodes of "Trading Spaces" to know how to stage a home. But did you know it's important to impress your real estate agent too? Preparing your home for an open house before a visit from an agent will help the agent to see the full potential of your home and allow him/her to better market the property.
- Pack away extra shoes and coats. Having these out in the open suggests a lack of closet/storage space.
- Remove any personal effects. People want to imagine themselves in your space, and pictures of your family reunion will quickly shatter the daydreams of prospective buyers.
- Clear off your fridge. A clutter of alphabet magnets, postcards and receipts will ruin the perception of an organized and peaceful home.
- Move out excess furniture. The more open spaces your home has, the larger it feels, and more space allows people to imagine varied possibilities for your home.
When it comes to selling your home, a clean toilet will go a lot further than you might think. A tidy home shows pride of ownership and suggests the place was maintained and cared for. For instance, the appearance of your entrance is just as important as any part of the interior. Make sure your mailbox, door, mat and trim are all pristine. Light shades and fixtures are havens for dust and insects, and while you may not notice them in your day-to-day, investigative homebuyers may be put off by your shoddy housekeeping.
Spotless windows will let in more light and allow people to enjoy the view. Consider replacing the furnace filter to improve the airflow in your home, as well as the quality of the air you breathe. Finally, the bathroom should be immaculate. Besides the obvious areas, like the toilet, tub and tiles, an ancient rule of bathroom etiquette becomes paramount: Keep the toilet seat down!
IN PICTURES: 6 Tips On Selling Your Home In A Down Market
5. Repair, Replace and Refinish
Many longtime homeowners become accustomed to retrofit repairs and dated or deteriorating features. For example, make sure to patch and paint the walls. Re-painting in neutral colors will help people imagine themselves in your space (think blank canvas) and an unblemished wall will reinforce your care for the home.
Also, evaluate your curb appeal. Is your lawn mowed and weed free? The front of your home is the true first impression for most house hunters, so make sure your exterior is top-notch.
If you have an older home or are concerned about hidden surprises, you can have a pre-sale home inspection done so you can tackle repairs before buyers are canceling bids. At the very least, you'll have an estimate of the cost of repairs so prospective buyers know what they are getting into.
6. Scout Potential Agents
Don't just hire the first agent that appears in your Google search. Take the time to shop around and find an agent that is suited to your needs. You can start by asking for referrals from people who have recently moved, and there are several online resources for ranking and reviewing realtors. You'll also want to look for an agent that is familiar with selling homes in your area, as he/she will be experts on pricing your home appropriately.
As well, an agent with lengthy experience in the real estate business will have a large network of contacts to help advertise your home and find you a new one. Remember, these agents will be taking as much as 7% of the closing price of your home, so make sure you are hiring someone who is prepared to work hard.
The Bottom Line
As with any major sale or purchase, your first steps to selling or buying a home involve homework and preparation. It's up to you to make your home appealing before you hire an agent. Remember, even the most skilled and experienced real estate agent can't help you sell unless they receive an offer, and demand won't be high for your home if you fail to follow this list. (For additional reading, also see 6 Signs Of A Healthy Real Estate Market.)
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