How to Realize More on the Sale of Your Home

Since a home is usually the largest asset that most people own, the sale of a home is usually the largest single financial transaction that most people undertake in their lifetime.  Unfortunately, many people don’t spend much, if any, time preparing to sell their largest asset.  The failure to plan often results in the homeowner not realizing as much on the sale as they could. 

There is often a significant amount of emotion involved in the purchase of a home and the “look and feel” of your property generates a greater emotional response than any other factor.  Prospective buyers react to what they see, hear, feel and smell.  Each year, corporate North America spends billions of dollars on product packaging design.  The lesson here is that appearance is critical and it would be foolish to ignore this when selling your property.

While your property’s appearance and presentation are extremely important, a homeowner can also make a serious financial mistake by over-improving their property.   Recovering your investment in a home improvement is a function of the type of improvement and the market value of your home compared to the homes in your neighborhood.  Investments made in additional above ground rooms and updating kitchens and bathrooms can usually be recovered.  New structural components such as roofs, heating systems etc. don’t usually add value.

Another area where homeowners don’t do their “homework” is in pricing their home. The real estate market, much like the stock market, is a marketplace with buyers and sellers, and prices are a function of the supply of comparable homes and the demand for them.  It is important to understand that housing prices, like stock prices, go up and down.  What you paid for your home, what your property is assessed for,  or what you “need”  or “want”  has no impact on the market value of your property.   Before putting your home on the market it is prudent to become educated about present real estate market conditions in general and specifically the recent home sales in your neighborhood. An improperly priced home will not sell and the longer a home is on the market, the lower the eventual selling price will be.

Investing the planning time on the front end of the home sale transaction will pay dividends at the closing table.