A critical thing to understand is that a real estate agent is not an expense; they add value to the process. With experience in buying and selling your most expensive investment, their expertise, time, and technical skills allow you to continue managing your life, commitments, and priorities, while they handle the complexities of the sale. A real estate agent maximizes the exposure of your home through advertising, marketing, showings, and follow-ups. This ultimately creates a larger pool of buyers and leads to a higher selling price.

The Importance of Legal Protection in Real Estate Transactions

Additionally, and sometimes even more importantly, a great agent knows how to protect your interests—not just financially but legally. They ensure all necessary documentation is in place, address any potential issues that could lead to legal problems later, and prepare you for what’s to come. For example, do you know the difference between a “patent” and a “latent” defect in a home? If not, one of them could cause you serious legal trouble.

In most provinces or states, compensation, often referred to as the real estate commission, is usually negotiable. Be sure to ask your agent about it upfront. A real estate agent might receive compensation in one of a few ways: either through a fee structure or as a percentage commission from the sale of your home. It’s important to ask a simple question like, “How do your commission fees work?” Your agent is obligated to disclose how this process and payment will look. As the seller, you generally pay fees or commission based on the final sale price to your seller’s agent (or their brokerage), who will then split it with the buyer’s agent (according to a predetermined formula, though it may not always be an equal split, so ask about the details).

For example, a full commission may be 7% on the first $100,000 of the sale price, followed by 3% on the balance. This is typically split in half, with 3.5% and 1.5% going to the selling agent, and the remaining portion to the buyer’s agent. Generally, you pay the full commission to the brokerage selling your home, and they will then pay the other brokerage. Commission structures can vary by geographic area, city, and agent.

You do have options when it comes to negotiating your agent’s commission. Asking, “Is there any way to negotiate your commission fee?” is a good way to start the conversation. Keep in mind that every agent is bound by guidelines set by the brokerage they work for, but the terms of a transaction are negotiable. Generally, a buyer’s agent fee is non-negotiable. In rare cases, you may be able to negotiate a 1% discount. Why? If you don’t offer a fair commission to the buyer’s agent, they may not be motivated to show your house to potential buyers. While this may not be ethical, it is sometimes a reality (there are good, okay, and bad agents in every field). Therefore, it’s best to ensure that your offer is fair to the buyer’s agent.

There is, however, potential for negotiating savings when you list with an agent to sell your home.

For example, you may be able to leverage a “buy & sell” option with a real estate agent. This would allow you to sell your home and buy a new one through the same agent for a discounted fee. Agents may be more open to this because they are making money on both the sale and the purchase. However, keep in mind that agents spend a lot of money marketing your home. If the sale doesn’t go through, they not only lose the selling commission but also the buyer’s commission, as you won’t be purchasing with them. Agents take risks, too, and they have a strong motivation to sell your home. Alternatively, you could offer your agent a “variable rate,” depending on how or when your house sells.

If your house sells quickly through word of mouth or in a hot market, you might consider proposing, “If my house sells without the help of a buyer’s agent, I’d like a variable rate of 4%.” In cases where an agent lists and sells your home while representing both parties (known as “double ending”), they typically receive the commission from both sides. In that case, negotiate a win for you, especially if you’re also buying with them. A win-win like this is always worth asking for.

Keep in mind, though, that you generally get what you pay for. Sometimes, a lower commission percentage could mean less effort from your agent, while paying the full commission could come with heightened expectations—rightfully so.

Before making any decisions, you will want to seek out a Comparative Market Analysis (CMA), which provides a report on properties that have recently sold in your area that are comparable to your home. This report is useful for both the seller (to know how to price their home) and the buyer (to ensure they aren’t overpaying). A CMA considers both current listings and recently sold homes. Some simple research on your part can give you an advantage. For example, knowing the marketability of your home can help you understand how much work an agent will need to put in to sell it. A harder-to-sell home might justify a higher seller’s agent fee.

Additionally, many systems track property history, so if you list too high and have to drop the price later, everyone can see the drop. This can make your house appear problematic. Buyers may notice price changes and infer that you’re becoming anxious to sell. This is another reason to work with the right agent.

When negotiating fees with your real estate agent, think about what services you’re expecting. Do you want the full range of services that the agent offers? If not, ask if there’s any potential for a fee discount based on reduced services. If the agent refuses to negotiate in this manner, you might want to explore contacting a discount broker who offers fewer services at a lower price (e.g., limited advertising). However, proceed with caution, do your due diligence, and ask for references.

Paying for the services of a real estate agent is an investment in professional services. Selling your home yourself (FSBO – For Sale By Owner) might save you some money upfront, but it could also turn out to be the worst decision of your life. After all, you’re selling your most valuable asset. Do you really want to handle it on your own? By hiring a real estate agent, you increase the likelihood of achieving market value or even a higher selling price, with minimal hassle and in the least amount of time. A great real estate agent will do just that for you.

Don’t hesitate to ask for what you want, speak to multiple agents, interview them, and ask for referrals from friends before making your decision. When you find a great agent, hold on to them as you would any trusted service provider—they are invaluable.

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tag roughly halfway through, as requested.

More and more people each month are finding their new home or property online. The convenience and ease of browsing multiple listings, taking interactive virtual tours, and researching communities from the comfort of your living room or office is unmatched. When it comes to shopping for a new home, the internet offers a wide array of possibilities to help you learn about and find real estate. It’s a sensible, time-saving, and cost-effective way to approach this significant purchase—especially for couples who both work full-time. With limited time together, technology helps speed up the identification and, ultimately, the acquisition of your next home. In some cases, it can even bridge the geographical gap for cross-country moves. Whatever your reasons, online home-shopping offers many advantages.

As you begin your search, rest assured there are numerous real estate websites—both free and paid—that you can utilize. A simple search for “online real estate” on any search engine will get the ball rolling. These websites serve buyers, sellers, renters, and real estate agents alike. Most real estate sites allow you to set specific search criteria. (Hint: Start broad with your search to view more results—you can always narrow them down later.)

Real estate websites offer a wide variety of services. Some simply list homes with a few photos, while others provide tools like simulated negotiating experiences or even full-service features covering every step of the home-buying process. Be sure to investigate the site you’re using. Sometimes what appears to be a generic platform is actually run by one or more agents trying to grow their lead base. There’s nothing inherently wrong with these sites—it’s just important to know who you’re giving your information to.

Many real estate platforms are designed as one-stop shops. In addition to home listings, they often provide helpful tools such as a “Do I prequalify for a mortgage?” button, historical pricing graphs, or financing option selectors. Some tools are free, while others may be sponsored services—like a lender offering a mortgage calculator in exchange for lead generation. In these cases, the agent and lender both benefit from your interest.

With a bit of discernment, you can easily explore financing options online. Even at a basic level, you can use these tools to estimate key figures involved in your purchase—for example, the mortgage you may prequalify for or your estimated monthly payments. That said, speaking with a licensed mortgage broker can be a valuable next step to answer your personal questions. Don’t hesitate to consult someone who understands everything from market value to mortgage rates and real estate valuation.

Working with Agents and Exploring FSBO Options

Real estate websites are built to make online home shopping more convenient. They can help connect you with the listing agent (seller’s representative) or assist in finding a buyer’s agent. As a buyer, consider working with a real estate agent in a supplemental role alongside your own research. Generally, the seller pays the agent’s commission, so it may not cost you anything out of pocket. An agent can also provide insider knowledge about the neighborhood, property history, or community that isn’t available on public websites.

It’s worth noting that the seller will usually cover your agent’s fees—when you purchase the home from them—though this depends on the commission being offered. Some agents now ask buyers to sign Buyer Brokerage Contracts, ensuring they’re compensated for their services. While buyers typically don’t pay directly for agent services, shrinking commissions due to builder websites, REALTOR.ca, or FSBO platforms may impact agent compensation. Always clarify these details before proceeding.

You may also consider buying through FSBO, or “For Sale By Owner.” There are valid reasons to pursue an unmediated transaction, though working with a skilled real estate professional—like those discussed in the article “Hiring a Real Estate Agent”—can provide peace of mind and expert guidance.

A few words of caution: real estate language is not always straightforward. Be mindful of descriptors—terms like “cozy” might mean “small,” and “partial view” might mean a building is blocking what could otherwise be a great view. Additionally, beware of fraudulent listings, especially in rental markets. Scammers may post fake properties and request deposits to “secure” them. Never wire money under these circumstances. Legitimate property owners should be willing to meet in person or accept a cheque. Many websites have safeguards in place—like requiring sellers to verify their identity using a valid credit card—but personal discernment remains key.

The most trustworthy websites are typically those that act only as advertising platforms for sellers and do not participate in the transaction itself. These sites tend to offer more impartial listings.

Online home shopping has become much more common than it once was. Some buyers even purchase homes “sight unseen” through the internet and an agent, often using clauses such as “subject to buyer’s satisfaction upon viewing the property.” Searching online is growing in popularity and user-friendliness every day. With some research, smart decision-making, and possibly a little professional advice, shopping for a home online can save you both time and money—and it can help you become far more aware of the market and your available options.

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The Reality of Divorce: Antagonizing Circumstances

Even if you are fortunate enough to be going through an amicable separation, tensions are likely to arise—especially when the house comes into question. Be mindful of your emotions and avoid making impulsive decisions, such as prematurely selling the home or signing away your rights to the property. Regardless of how strained the relationship may be, any secretive or underhanded deals are likely to be uncovered in the end—and the person responsible often ends up losing more than they gained.

Sales Options in a Divorce Situation

Ideally, both parties will agree to sell the home and split the sale proceeds equally—or according to a formula determined by legal counsel. In this scenario, the process is relatively straightforward: a buyer is found, the home is sold, and the money is divided.

However, there are other alternatives. One spouse may decide to retain ownership of the home. This arrangement still constitutes a sale—essentially, one spouse is buying out the other’s interest in the property. The best way to handle this is to have the home appraised by a neutral third party. The appraised value is then divided in half, and the spouse who stays in the home pays the other for their share.

In all cases involving property division, each individual should consult separate legal counsel. However, it’s usually advisable to work with a single real estate agent for the home sale to avoid paying double commission. Legal representatives can negotiate which agent to use.

Financial Pressures and Creative Solutions

One of the greatest challenges in a divorce is the financial strain that comes from losing one or both household incomes. This is especially difficult if one spouse was a stay-at-home parent. In these cases, selling the home quickly may become a necessity to avoid falling into debt.

However, if the real estate market is slow or unfavorable, a lease option may be a smart alternative. Under a lease option, the home is rented out to tenants who have the opportunity to buy it later. This arrangement can help cover monthly expenses like mortgage payments and property taxes, while also opening the property to a different group of potential buyers—those who need housing now but aren’t yet able to purchase. For divorcing couples, this can be an ideal solution: it addresses the immediate financial burden while allowing the asset to be sold at a better time.

Beware of Fleecers!

Divorce often leaves people vulnerable—emotionally, mentally, and financially. Unfortunately, there are individuals and companies who take advantage of this vulnerability for their own gain. Be cautious of so-called “rescue” companies that offer to buy your home quickly to ease your financial stress. While their promises may sound appealing, these businesses often exploit distressed sellers and offer far below market value.

If at all possible, try to communicate civilly with your former spouse. Working together toward a common financial goal will almost always result in a better outcome than acting out of anger or desperation.

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If you’ve never sold a house before or don’t know anything about real estate, you can still make a good sale by following certain guidelines. It would be a pity if your asking price was too unrealistic; that is, either you’re outpricing yourself by demanding a high sale amount or you’re giving your house away for a song.

Fact # 1: in any geographical area, there’s always what realtors call a “buyers’ pool.” These are buyers with different profiles and intentions so by knowing about them you can be in an advantageous bargaining position. In this pool, there are buyers who are looking for a house they will live in, buyers who are looking to invest, cash buyers and mortgage buyers. If you know what type of buyer you’re dealing with, you can price your house appropriately.

Fact # 2: to sell your house successfully, always look at your house through a buyer’s eyes. This means, seeing things about your house that you’ve never noticed before, but which buyers notice immediately. One trick, according to a real estate agent, is to look at your house from across the street and scrutinize it. What do you see now that you haven’t seen before?

Taking these two facts into account, here are some tips that we’d like to share with you. You might find them handy when you make the final decision to sell.

Selling Your House Yourself: Valuable Tips

1. Start outside (the outside is what home buyers see first)

Take a look at what might be a sore eye: overflowing garbage cans, wood scraps, junk yard stuff. A tidy exterior speaks volumes of the owners. Does the clutter outside the house mean that the inside will reveal more clutter? What about the roof? Is it in good condition; if not, when was the last time it was replaced? Is the garden attractive and inviting or are there bushes and trees that need trimming? Is the lawn brown and depressed, or is it alive and green? Are the outside lights working? Is the paint falling off?

2. Go inside the house

Again, we’ll repeat the issue of clutter. If your house has hardly any space to walk around and there’s too much furniture, knick knacks and unnecessary items lying about, it is difficult for buyers to visualize how their own furniture will look in your house. By not removing clutter, you’re not allowing them to “mentally move in.”

Repair doors that squeak, faucets that leak and windows with cracked or broken glass. Don’t forget floor slabs that have come loose. If the paint’s peeling off, fix that one too!

3. Environmental concerns

Be prepared when potential buyers ask you about radon, asbestos, lead and energy-efficiency appliances or devices. Be sure to look at a list of asbestos containing materials and other dangerous chemicals so you can identify them on the spot. There’s a heightened sense of the environment right now, and your house will be competing with newly-built homes that bear the mark of energy efficiency. You may want to have your house inspected by a certified inspector for any radon, asbestos or lead content. When you show a healthy inspection report, you stand a better chance of selling your house.

4. No one’s buying

Inexperienced sellers make the mistake of not pulling down their ad after a certain period of time. They think that if they leave the ad long enough, a buyer will show up eventually. Be careful. If your house is still in the market after a year while other houses in your neighboring are being sold within a reasonable period of time, then take a step back. You ought to take the ad out and place it again at another time. When buyers see that your house has not sold yet, they begin to question why (“maybe it’s haunted”) or they could offer a much lower price if they sense you’re desperate.

5. Prepare for Open House

Receiving buyers and answering the same questions over and over again can be tedious. What you can do is prepare a fact sheet about your house: year it was built, if you’re the first owner, how many times the plumbing and roofing have been replaced, what kind of neighborhood it is, how many schools there are, supermarkets, libraries, hospitals and senior citizens’ facilities. Buyers appreciate it when you anticipate their questions. Attach your latest inspection report as well. Some buyers may be seriously considering buying your house because of its proximity to a school or a hospital.

When buyers arrive, ask them if they’d like a guided tour or they’d like to inspect your house on their own. They may be too embarrased to look under sinks or open closets if you’re around. Give them the option to go on their own, but give them a fact sheet anyway.

6. Knowledge of municipality’s zoning laws

Make sure you know what’s going on in your city. If there’s a planned zoning change that could considerably “up” the value of your house, then you’ll be better prepared to ask for a price that’s fair and can even generate a nice little profit. If you sell your house and then a zoning change occurs bringing down the value of your house, the buyers who you sold your house to could file a lawsuit alleging that you should have warned them about the zoning changes.

7. Sharpen those negotiation skills

Speak to realtors or read up on negotiating skills. The basics are: seller always starts high while the buyer will always start low. This way seller and buyer have plenty of room to negotiate. Be flexible so that you don’t turn away a serious buyer; by the same token, know when to stop negotiating. That’s why we have offers and counter offers in real estate. Both seller and buyer want value for their money.

8. Pets Away! Cooking Odors Ayoy!

Don’t nurture the mistaken notion that people love pets like you do. In fact, there are buyers who specifically say that if there’s a pet in the house, the first thing that worries them is invisible pet dander or pet hairs strewn about. We personally have a preference for pet-free homes, so there…

And make sure you eliminate all unpleasant odors from the house, especially if you cook with exotic ingredients that have strange smells.

9. Timing and Reason

It’s common sense not to sell your house when the market is down, unless of course you’re desperate for cash. Also, don’t sell your house for the wrong reasons. If you love your house but want to sell it because you’ve recently been divorced and staying in it stings you with painful memories, wait it out. Time heals all wounds, but a house sold is gone forever.

10. Documentation and all things legal

Protect yourself by requesting that a buyer who is about to buy your house put funds into escrow, or have a third party set this up. You wouldn’t want to be unpleasantly surprised to end up with a house that you took off the market because the buyer said he was “approved for a mortgage loan.” Always ask for proof of the buyer’s financial condition. Do not give him the keys to your house or transfer ownership until you’ve got the money in the bank and all papers are in order.

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Time

As mentioned earlier, time is your most valuable ally when trying to sell your home. Even if you’re in a situation where you don’t have much time to secure a great sale price, there are still ways to make the most of the time you do have. Most of the factors we’ll cover below are time-related, and even in urgent cases, you can usually squeeze out a little extra time to list your house at a good price. Every day counts, so planning ahead can potentially lead to a much higher sale price.
Here are some tips for buying yourself a little more time before listing your house:

Many major life changes don’t come as a complete surprise. If you hear rumors about a potential promotion or job transfer, start thinking about selling your home as soon as possible. You don’t need to sign any contracts right away, but doing some preliminary work—like researching real estate agents and deciding on an asking price—will save valuable time when the change happens.

If you’re facing a job transfer, consider asking your employer if you can delay your move until later in the year. You don’t need to wait until your house is sold, but the goal is to wait for the right market conditions. If you plan ahead, you might even be able to purchase a home in your new location during a slower time of year while selling your current house in a hot market.

The Best Time of Year to Sell

The time of year is critical when selling a home. One of the most important factors in securing the best price for your property is ensuring it looks its best when potential buyers come to view it. Seasonality plays a huge role here; homes typically look their most appealing in the summer, when landscaping is in full bloom and the exterior is showcased at its best. Early fall can also be a good time to sell.
Winter, on the other hand, is generally a bad time to list your home. Not only will your house not look as attractive, but fewer people are actively looking to buy during this season. Moreover, the wet conditions lead to mud and dirt being tracked inside, making it more difficult to keep the house clean.

Spring is also not the ideal time to put a house on the market—at least not early in the season. Let the streets clear of slush, and give potential buyers time to shake off the winter blues. Once the weather warms up and the sun starts shining, people will be more likely to start house-hunting and spend money.

The Seller’s Market

Every once in a while, conditions align perfectly for home sellers, resulting in homes selling almost immediately after being listed. This is called a “seller’s market,” and it typically occurs when interest rates are low. A prime example of this was in 2005, when salaries were rising, interest rates were low, and there was an unprecedented number of people looking to buy homes.
While not every seller’s market will be as heated as 2005, these periods are still the best times to sell. However, keep in mind that seller’s markets are often driven by economic conditions. If you find yourself in a low point in the cycle, you might not have the luxury of waiting for a market rebound.

Ultimately, the best time to sell your house is when you can secure the highest value for your property. Several factors contribute to this, including the condition of your home, the season, and the economic climate. But above all, time is the most important factor in maximizing your sale price, so try to give yourself as much lead time as possible.

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Home staging has become standard in today’s highly competitive real estate market. Think of it as the homeowner’s equivalent of hiring a celebrity stylist for the Oscars. The stager’s goal is to highlight all the architectural assets, making spaces that could feel austere or intimidating appear warm and inviting.

Staging has a physics-defying effect that makes small rooms look larger, outdoor spaces more dramatic, and overall square footage feel expanded. Home staging is especially good at communicating a lifestyle—an elusive blend of good design and subtle luxury that says, “I’ve made it… but not that I care.” Staging always increases the sale price. It’s a short-term, high-yield investment.

Here’s an exclusive peek at how to make staging take center stage in your home for sale.

Right here, right now… in ten easy scenes.

• Scene One: **Appeal.** Start with curb appeal. Rake up fallen leaves, update the front door hardware, and install new exterior light fixtures. Curb appeal should create an unforgettable first impression that entices buyers to get out of the car and step inside.
• Scene Two: **Enchant.** The front entry should generate excitement, drama, and maybe even a little razzmatazz. Create a focal point with an oversized mirror, a piece of art, a lamp on a console table, fresh flowers, or scented candles—but not all at once. Add drama, not a graveyard of props.
• Scene Three: **Refresh.** Sand and refinish hardwood floors. Clean carpets or replace outdated flooring or countertops. Remove those little goblins’ handprints from the walls.
• Scene Four: **Rearrange.** Create furniture layouts where buyers aren’t dodging coffee tables or dressers. Focus on better flow and showcase the space. A smart design might highlight the view of mountains, a landscaped backyard, or a nearby park.
• Scene Five: **Upgrade.** Stainless steel appliances are a popular choice because they add a commercial, high-end look. If you have the space, consider adding a glass-front wine cooler for added appeal. Top a bathroom vanity with a vessel sink for a chic touch.
• Scene Six: **Accommodate.** Give your bathrooms that “Star” treatment. Add thick, white luxury towels, with extra hand towels at each sink. Include scented reeds or candles, glass jars filled with cotton balls or Q-tips, and chrome soap dispensers.
• Scene Seven: **Impress.** Treat your master bedroom like a luxury hotel suite. Add fluffy pillows and shams to match a thick duvet or quilt, and stack some novels on a tray. Include a tall plant to add perceived height and life to the room. If space allows, set up an armchair with a reading light or a sofa to enhance coziness. And don’t forget—remove personal photographs.
• Scene Eight: **Organize.** Clear the set—remove clutter. Install well-designed closets and organize this space. Closets should look and smell fresh, not musty. Hang shoes neatly, and store other accessories in matching wicker baskets. Keep the floor clear, add cedar blocks for scent, and invest in matching hangers to project a lifestyle of success.
• Scene Nine: **Entertain.** Add a soundtrack. Play music via iPod or wireless speakers. Install a plasma TV tuned to an eye-catching, high-definition disc of panoramic scenes. Present your home as modernized and updated to its fullest potential.
• Scene Ten: **Dramatize.** Add a subplot of square footage with dramatic effects. Use mirrors in small areas, strategically placed furniture, and large bouquets of fresh flowers. Turn on all floor and table lamps to spotlight the living space.

Stage from the floor up—seating is limited, so book now!

Article Supplied BY: Karyn
CRAZY HOUSE Home Staging – The Art of Professionally Preparing a House for Sale
403.287.1774 – Website: www.crazyhouse.ca

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Selling a house can truly be one of life’s more crazy experiences. It’s likely the biggest transaction you’ll ever make in one sitting, and the money is all going to you. However, there are several things to consider before you put your home on the market. Once you do, there’s much to be done to ensure it sells quickly and for the price you want.

Preliminaries
First, you need to determine your needs when it comes to selling your house.

Where are you moving to? If you’ve received a promotion or job transfer, or if you’re starting an entirely new career elsewhere, you’ll want to sell your house before you have to leave. There’s nothing worse than having a home on the market in one city while living in another; this can take a substantial amount of money out of your sale profit. Time is critical in this case, so make sure you have a well-laid plan for your sales strategy.

Sell yourself or use an agent?
Many people try to sell their homes on their own to avoid the commission charged by an agent. What many don’t realize is that selling on your own could end up costing more than the commission would in the end. A realtor knows the ins and outs of the trade and has the contacts that can help reduce both time and fees associated with deed transfers and other legal costs. They’ll also have connections with people looking to buy homes for themselves or their clients.

Setting the price.
Setting the right price is probably the hardest part of selling your home. A realtor can give you a good estimate based on the sale prices of similar homes in your area and the condition of your property. Most property tax assessments are now available online, so you can check what the municipality thinks your home is worth by consulting their website.

Fix, fix, fix.
Don’t expect buyers or their agents to overlook those small repairs you’ve been putting off. Take the time to inspect your home and determine what improvements should be made. Both the interior and exterior need to be free of marks or issues that could detract from the property’s appeal—things like leaky faucets, peeling paint, holes, and damaged fences.

Preparing Your Home for Showings
Once your house is on the market, it’s all about waiting and preparation. Homeowners are usually notified when potential buyers are coming to view their properties, so you can be proactive by ensuring your home is ready.

Make sure all cleaning and maintenance tasks are completed inside and out. Lawns should be mowed, and all trees, hedges, and bushes should be neatly pruned. Even if you’ve never pruned before, this is the time to do it. It not only improves the house’s appearance but also gives the impression of good upkeep, which can positively affect a potential buyer’s perception of the entire property.

Inside, vacuum and wash every room until it shines. Appearances matter, and if you take care of the visible surfaces, buyers will assume you’ve also maintained the rest of the property. Start moving out some of your furniture before showings begin. A few pieces can help potential buyers envision the space, but large furniture should be removed to avoid crowding. Also, clear out any storage spaces to show buyers that there’s ample room for their own items.

Bargaining
Anytime you sell a house, there will likely be some back-and-forth over the price. While it’s not always the case, as seen in the 2005 housing boom, sometimes house prices are actually negotiated upwards!

Most of the time, though, expect to negotiate with potential buyers about the price. Your listed price is often a few thousand dollars above what you’re ultimately willing to accept. Be prepared to be fair in your negotiations, but don’t let buyers take advantage of you.

Remember that just because you sell your house doesn’t mean you’re free of responsibility. Legally, you’re required to disclose any hazards or issues with the property. For example, if the house has lead paint, you must inform the buyer. After you disclose this, the buyer assumes responsibility and risk. This can often be as simple as providing a signed acknowledgment form. It may seem like an inconvenience, but it’s far better than facing a lawsuit years down the road!

Once the sale is complete, make sure to keep all related documents in a safe place. Also, don’t forget to apply right away for the capital gains exemption on your income taxes; there’s a limited timeframe to claim this exemption.

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You achieve all of the above by offering something someone else really wants and being able to present it at a great price.

Sounds easy, right? Well, the closer you look, the sooner you realize the trick: spending your time and money efficiently and effectively. So you ask yourself,

Should I renovate before selling my house?

1/1,000 = 0.01%
It can be illustrative to consider extremes. If you were to pay $200 per gallon for gold-flaked purple high-gloss paint and smother it throughout the living and dining rooms, you might find one out of a thousand prospects who would go to great lengths to buy your house.

This brings up one of the most important maxims I’ve learned as a real estate broker:

• Assume prospects have no imagination whatsoever.

How many home and garden reality television shows have you watched where clients remark about how ugly the paint is or the landscaping, while walking right past a swimming pool or an open view of the water? Did you imagine the real estate agent smacking their head, too?

As a buyer of real estate, to make the most of your time and money, you must distinguish what you can change and what you can’t—and hope someone grants you the power to know the difference! As a seller, though, you must assume buyers don’t have this ability because a large percentage of the public—at least those who actually look at homes—seem not to. No insult, just a fact.

999/1,000 = 99.9%

So, rather than gold-flaked purple, imagine dividing the walls into two tones of taupe with crown molding and a chair rail. Now you’ve inspired 999 out of those 1,000 prospects to buy rather than just one. This is called universal appeal, and it changes all the time. Reality television, a savvy real estate agent, and most of all, a full-time professional home stager, decorator, or designer, will keep you up to date on what’s hot and what’s not.

Add to that the basic economics of buying low and selling high, and we can now answer the question posed by this article: Should I renovate before I sell my house? It will depend on:

(a) Universal appeal
(b) Profitability

There is data available on which renovations are most effective. Before we list statistics, consider the following:

• CURB APPEAL FIRST. If the outside looks bad, they may never even come see the inside!
• FIX THINGS THEY DON’T WANT TO FIX. Buyers might be willing to roll up their sleeves and landscape, but they’re less excited about replacing toilets or sinks.
• WHEN IN DOUBT, GIFT IT OUT. While not my first recommendation, if you’re pressed for time, you can offer a home supply store gift card instead of making renovations. But be sure to announce this clearly, whether in pictures or in person, before they see the trouble-spot the gift card is meant to fix.

Specifics

From cheapest to most expensive:

• CLEAN. Ever hear someone rave about a used car that’s really clean? Cleanliness is a virtue. Clean and organized alone can accomplish a lot with very little cost, but you’d be surprised at the effort involved! House cleaners really earn their pay and are a worthwhile investment if you’re selling your home. Nothing will scare buyers away faster than a dirty house.
• PAINT. Especially if you do it yourself (DIY!), painting can be one of the most cost-effective improvements you can make. It’s relatively cheap and can make your home appear fresh and clean, while also taking years off its appearance. Bright, subdued yellows tend to give impressive results. Choose colors carefully, though! A thorough consultation with a paint expert or a real estate agent is well worth your time if you’re unsure.
• REPLACE OBSOLETE MAJOR COMPONENTS BUT DON’T OVER-IMPROVE. If the roof, kitchen, bathrooms, air-conditioning, or windows are in poor condition, a renovation could make your life easier and ultimately enrich your home’s value—but proceed with caution. Rather than focus on universally applicable upgrades like replacing siding or building a deck, prioritize problem areas of the home for potential renovation. For example, a sagging or leaking roof should take precedence over renovating an otherwise acceptable bathroom. If your windows are cracked or damaged, these crucial elements need fixing before putting the home on the market. The experts at Sparvinduer.dk can help refresh your windows.

I’ve seen sellers make the big mistake of upgrading a kitchen while leaving a bad roof. Some improvements generally pay off better than others, but it depends on your home’s condition. The formula is below.

Major Renovations

Try to get wholesale rates for the work. The best way to do this is by asking for a dozen bids—yes, a dozen. Half of them may not show, two will be ridiculous, two will be moderate, and two will lowball. Don’t always go with the lowball offers!

By the end of the bidding war—and make sure to let them know you’re getting multiple bids—you’ll be talking like a pro and can make a decision you trust.

The Formula

Here’s the real gem of advice: ask a real estate agent, or several, and don’t just ask whether you should make renovations. Ask them to work out this formula:

“What is my probable current home value range now, and if I invest $10,000 in a new roof, what will the value range be then?”

If the answer is at least $10,000 more and the roof was bad to begin with, go ahead with the improvement. Don’t make improvements just for the sake of it—make them to fix problem areas of the home. When liabilities turn into assets, you get the most bang for your buck.
If you’re interviewing real estate agents, this is an excellent hands-on question. Get several opinions. It may be worth paying an appraiser $50 for an opinion like this before making such an investment. The list above also ranks improvements by their obviousness. For example, cleaning and painting should be a given, but major renovations require more careful consideration.

Major, Major Renovations

With regard to significant renovations such as room additions, consider the values in your neighborhood. Bringing a three-bedroom home up to a four-bedroom home may not pay off if your neighborhood is full of other three-bedroom homes. However, it could be worth it in a neighborhood of four-bedroom homes. In short, this means:

• Avoid over-improvements.

Your neighborhood is the limiting factor. Over-improving can backfire, especially if your home ends up priced too high for the area. Why would anyone pay $600,000 for a house in a $500,000 neighborhood when they could buy a similar home for the same price in a $600,000 neighborhood? Over-improved homes tend to take longer to sell and are harder to appraise and finance.

In addition to (a) Universal appeal and (b) Profitability, there’s also (c)—the intangible benefit of an investment in the house that may not reap as much money as you put into it, but could increase the appeal of the house and speed up the sale.

When appeal is high, the transaction is likely to go more smoothly. Here are a few bonus maxims:

• People buy on emotions.
• Women buy houses.
• Men pay for houses for women.

Maybe this is old-fashioned, chivalrous, or even sexist, but you can call me all of those things until you receive your proceeds at closing (smile).

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Your mother always told you, “You will need math someday!” Well, that “someday” has arrived! You’re thinking about selling your house for $400,000, and you paid $300,000 for it, so you’re tempted to spend that $100,000 profit in your fantasies. But wait! There are a few things you need to consider before you start counting your chickens—because not all of them will hatch.

If we disregard the monthly payments and interest, assuming they are roughly comparable to what you might have paid in rent during that time, we are still left with a few important factors to consider. There will be costs involved in the sale and closing, as well as any cash you may have invested in the home during your ownership.

Costs

Most people hire a real estate agent and agree to a commission of 6-7%, which is shared among all agents involved in the sale. For our purposes, we’ll assume the commission is 7%. This is often justified by the belief that offering a lower commission (such as 6%) might result in a longer time on the market and a more difficult selling process—ultimately eliminating any benefit or savings from reducing the commission by just 1%.

Determining who pays for what in a residential real estate transaction can be tricky, as it depends on the type of financing and the location of the property. Different regions have varying customs regarding who typically covers certain costs at closing.

The Bank

However, most of these costs are negotiable, unless there are specific charges the lender will not allow the buyer to pay, or have paid on their behalf. In a typical closing, the lender has this kind of power because they can withhold funding if their own lending criteria are not met.

The costs and prorations will also vary depending on the day of closing. For example, let’s say the property taxes are $1,200 per year ($100 per month), and you close on July 1st (as we’ll do in this example). Both the buyer and seller will be responsible for half of the year’s taxes, or $600 each. Buyers’ taxes are often collected in advance and held in escrow by the lender so that when the bill is due, the money is already set aside. This protects the bank, which is why they require it.

Example

Let’s assume a typical scenario for the lending situation and customary costs in Florida. If you’d like a more precise calculation, there’s a helpful, free closing cost calculator here.

The calculator allows you to select whether specific expenses are paid by the buyer, seller, shared, or “POC” (paid-out-of-closing). For example, most buyers are required to pay the appraiser’s $300-$400 fee in cash when the appraisal is performed. Appraisers used to wait until closing to be paid, but after too many deals fell through, they now prefer cash up front.

The calculator provides a detailed breakdown of what you might expect from a sale of your home for $400,000, paying customary fees, with a closing date of July 1st. If you have a mortgage balance of $200,000, you’d receive a check at the end of the closing for $166,725.

That means you had $33,275 in costs!

$28,000 in real estate commissions

$400 settlement fee (which pays the title company or lawyer for handling the closing)

$2,075 in title insurance (typically paid by the seller in Florida and based on the sale price)

$2,800 in deed stamps (a tax collected by the state for recording your sale)

Where’s My Money?

Even after an equity gain of $100,000 (remember, the value went from $300,000 to $400,000 while you owned it), you’re left with only a $66,725 long-term capital gain if you held the home for longer than one year. The remaining $100,000 in your check is a recoup of cash you put down when you bought the home, along with the equity you built through your mortgage payments.

But notice we said “so far” in the previous paragraph. Let’s say part of the reason your home’s value increased by $100,000 is because you invested $25,000 in a complete kitchen remodel and update. After factoring in that investment, your gain is even less—only $41,725.

Tax-Free

Under the current U.S. IRS tax code, each spouse can realize up to $250,000 in gain from the sale of a personal residence without paying taxes. However, you should verify this with your accountant, as other tax factors may significantly affect your sale and could influence your decision to sell or hold.

The Point

The point here is not necessarily the specifics of the figures used, but rather to give you a general idea of what to expect when selling a home. Your biggest expense in this scenario was the real estate commission. Many people try to cut costs by offering a lower commission or even selling the home on their own, but this may not always be the best decision, even from a strict financial standpoint. Without professional guidance, you might face a much longer time on the market, encounter additional pitfalls, and face greater liabilities, even after the sale is complete.

Your home can be a great investment—one of the best, in fact. But before you make a decision, be sure to consider the costs of selling, the potential tax consequences, and alternative options such as renting.

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When People Will Be Looking at Your House

There are several ways in which potential buyers will evaluate your home to see if it’s the right fit for them. These different types of viewings are not mutually exclusive; in fact, buyers will likely approach your house using a combination of the following strategies:

• Street Viewing. A “For Sale” sign on your lawn communicates that your house is on the market. This is often the first thing potential buyers will see, after which their attention will be drawn to the exterior of your home.
• Open Houses. Although open houses have never been the most effective strategy for selling, they remain popular. The homeowner sets aside a day (usually on the weekend) for interested parties to tour the house on their own, often with the owner present. A disadvantage here is that, even if you clean your house thoroughly beforehand, it can quickly become messy with people walking through. Additionally, a successful open house can draw attention to a crowded entryway!
• Viewings by Appointment. These are the most common ways for potential buyers to evaluate a house. Appointments are scheduled between the buyer’s agent and the seller’s agent, giving the owner time to clean up (if they still live in the house) or to touch up the property (if they do not).
• Virtual Tours. A new trend in real estate is the virtual tour. These are quickly phasing out the open house. Potential buyers can view your house from the comfort of their own homes, allowing an unlimited number of people to look at it without physically visiting.

Preparing for Street Viewing

As soon as you put up that “For Sale” sign, start paying close attention to the exterior of your house. If it’s summertime, ensure all your flower beds are weeded and the grass is cut to a nice length. Don’t leave anything out in the yard that can be moved (tools, toys, equipment). In the fall, rake up leaves regularly, and in the winter, shovel after every snowfall.

Check the paint on your house; if it’s peeling, apply a fresh coat. Since you’re already doing other work, now is a good time to clean the outside of the windows as well. Any trees or shrubbery should be pruned. Remember, this could make the difference between a serious buyer scheduling a viewing or passing by!

Preparing for an Open House

The advantage of an open house is that you have plenty of advance notice, allowing for a thorough cleaning of your home. Don’t leave anything out—dust, vacuum, mop, and scrub every room.

Before showing the home, consider holding a yard sale. This will help you prepare for the move and ensure your house is uncluttered in front of potential buyers.

Make sure there are no repair or maintenance issues with the interior of your house. The furnace and hot water heater should be in good working order; if they are older models, consider upgrading. Agents know to look for quality heating equipment!

Preparing for a Viewing

Viewings will require much of the same preparation as open houses, but you won’t have as much notice. It’s best to keep your house in the tidiest condition possible throughout the sale period to avoid a massive cleanup each week. If you plan to have an open house, it’s wise to schedule it soon after the house hits the market, ensuring that the deep cleaning is completed.

Before each viewing, check your house carefully. Make sure you and anyone else living there can be out during the scheduled time; this allows potential buyers to talk openly with the agent and prevents any potential leaks about disadvantages to the home. If possible, try to get your pets out as well.

Preparing a Virtual Tour

Virtual tours are a fantastic way to showcase your house. They eliminate the need for an open house, as people can view the rooms from their own computers or those of an agency. There are both video and pictorial tours; if you can get the video ones, go for it.

While virtual tours still require you to clean your house, you won’t have to do it as often as with an open house, and the risk of theft is somewhat reduced. However, virtual tours will never replace in-person showings; potential buyers will always want to see the house firsthand. You may need to shoot the footage yourself, depending on your realtor’s equipment. Be as thorough as possible, and include some narration about the house (but avoid personal details!).

Getting your house ready to be seen by potential viewers is one of the most important tasks you have as a seller. The way people perceive the house—and consequently the price they are willing to pay—will depend partly on its condition and cleanliness. A spotless house may not guarantee an immediate sale, but it is certainly a step in the right direction.

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