Real Estate 101 | Are you Selling your Home For Sell By Owner? | Real Estate in Northern Virginia or Maryland, Washington DC Suburbs?

What You Need to Know as FSBO :

 This may be the first time you've ever sold a real estate property or it may have been some time since you've been involved in a real estate transaction. Here's a quick refresher on some of the real estate specific terms you'll want to know.

Real Estate Brokers and Real Estate Agents

Listing agreements are made between real estate brokers and you, the seller. A real estate agent works for the licensed real estate broker. The commission for the sale of your home will be paid to the real estate broker. The real estate broker will pay a split of that commission to the seller and buyer agents where applicable.

The Fair Housing Act

The Fair Housing Act, originally passed in 1968 and amended in 1988, is a federal law in the United States that prohibits discrimination in housing.

Seven "classes" are protected under the Fair Housing Act:

Race

Color

Religion

National Origin

Sex

Handicap

Familial Status

You can learn more about The Fair Housing Act at www.HUD.gov.

The Multiple Listing Service (MLS)

The Multiple Listing Service is a proprietary database of all properties currently under an active listing contract in a given area.

All active agents and brokers who belong to this MLS will have access to information about your property listing. Buyer's agents searching for a new home for their clients will learn about your property listing through this online database.

Real Estate Portals

Real estate portal websites like Zillow and Realtor.com are data aggregators on listing information. The marketing information on your listing will be syndicated to real estate listing portals in order to draw in the largest possible market of interested buyers.

Appraisal

Before you signed your listing contract with me, I offered you a competitive market analysis of your home's value. We will set the final asking price on your property based on this market value estimate.

When you receive an offer on your home, the buyer's lender will require an official appraisal of the property from a licensed appraiser. This valuation helps assure the lender that they would own a marketable property if the buyer (or the borrower in the lender's eyes) should default on their mortgage. The buyer will pay for the house appraisal, but you should know that it may be different than the market analysis that I provided you.

Inspection

In addition to an official appraisal, most interested buyers will request a home inspection before final sale. The goal of a home inspection is to give the buyer an objective, independent and comprehensive analysis of the physical condition of your property and check for any safety issues that might otherwise be unknowable.

A professional inspector will check on the structure, construction and mechanical systems of the house. This usually includes checking:

• Electrical systems
• Plumbing and waste disposal
• Water heater
• Insulation
• Ventilation
• HVAC system
• Water source and quality 
• Waste disposal
• Pests
• Foundation
• Doors
• Windows
• Ceilings
• Walls
• Floors
• Roof
• Radon gas
• Asbestos
• Lead paint

You may be considering ordering an inspection of your home before we place your house on the market. Not knowing the full extent of potential problems until an offer is made by a buyer is a recipe for an ugly negotiation process.

 Showing Appointments

When an interested buyer is scheduled to see your property, it's best if you, your family and any pets you may own are not in the property.

Buying a new home is a very emotional process, and it's sometimes hard for prospective home owners to imagine themselves living in a particular place when the current resident is still inside. I will work with you and the other real estate professionals who will be showing your home to schedule and supervise listing appointments.

These home showings will most likely be an inconvenience for you and your family. I will do everything I can to work with you to minimize the impact, but an aggressive showing schedule will help us sell your property quickly, which is our ultimate goal.

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COSTS OF SELLING YOUR HOME

Selling your home is typically about making a profit. However, that doesn't mean that it doesn't come without costs. Here is an overview of some of the major costs you'll be responsible for paying.

Mortgage Balance

This is the remaining balance on your original home loan. You will need to pay off your mortgage in its entirety when your home is sold.

Home Equity Loans (2nd, 3rd Mortgages)

Any loan against the value of your home will also need to be paid in full after the sale of your home.

Prepayment Penalties

The bank or lending institution that currently owns your mortgage title may assess a pre-payment penalty. You should speak to your lender now, ask if they plan on assessing a pre-payment penalty, and figure out exactly how much that amount is. You may be able to negotiate with your lender to reduce or waive the pre-payment penalty, if there is any.

You'll also want to submit a formal pre-payment notice to your lender.

Pre-sale Preparations

In most cases, it's not advisable to make major investments in your home right before a sale. There are however, a few things that can be done to increase your home's curb appeal, fix minor problems, and otherwise make your property more attractive. Together we can identify what items should be addressed and create a budget for these pre-sale preparations that are sure to show a significant return on investment.

Closing Costs

All closing costs associated with the sale of your home will be listed for you and for the home buyer in the Closing Disclosure form. They buyer is generally responsible for all of these closing costs which include:

Taxes

The money that you make from the sale of your home is considered capital gains. The good news is that these profits can be excluded from your taxable income, up to $250,000 for an individual or $500,000 for a married couple, as long as your home was your principal residence.

To exclude the full portion of those gains, you will need to have lived in your house for at least 24 months in the 5 years previous to the sale date of the property. This is considered the 2 in 5 rule.

If you do not meet the minimum occupancy requirement you still may be able to exclude a portion of your gains if you are selling your house because of circumstances related to your health or to your job. You should speak with your accountant or a certified tax specialist if you believe you fall under one of the exclusions or need help in reporting your capital gains after the sale of your home.

If this property is a real estate investment your profits will be considered taxable income and will be subject to state, federal and self-employment taxes. You can defer all capital gains taxes in a 1031 exchange if you are planning to reinvest the proceeds of your real estate sale into a new property.

Again, in this circumstance you should speak to a financial specialist who can help you fully understand and minimize your tax liability.

Moving Costs

Moving isn't only a hassle, it can also be very expensive. Whether you're moving to a new house in your neighborhood or across the country, it's important to estimate and plan for the full cost of moving from your home once it is sold.

If you're working with a moving company, you'll want to get a full idea of what you'll be charged for what services. If you're moving yourself, you'll most likely need to rent a van. And don't forget the packing materials including boxes and tape.

The more preparation you do in your move planning, the less likely you are to avoid overpaying for your move expenses.

SETTING YOUR HOME'S LISTING PRICE

Setting Your Home's Listing Price

As we discussed previously, your home's listing price is based on many factors including:

Current, local market conditions

Comparable home sales

Buyer availability for your property

Proceed considerations

Setting an appropriate listing price is often times the difference between getting your property sold, and having it linger on the market, and eventually not sell. In fact, according to the National Association of REALTORS® Profile of Home Buyers and Sellers 2014, the median purchase price of all properties sold in the United States is within 98% of the seller's asking price.

When it comes to wondering how much you can get for your home, the key factor is not what you paid or owe on it, but what another person will pay for your house in the current market.

If we set a listing price that is too high, we will lack in interested buyers.

If we set a listing price that is too low, we will short change your home.

For More Information:

Kim Kroner Realtor - Associate Broker

Top Producer - NVAR Multi Million Dollar Sales Club

Member - Long & Foster Chairman's Club

Long & Foster Christie's International

kim@kimkroner.com

(703) 946-2526

(800) 9611328

www.kimkroner.com

309 Maple Ave W. Vienna, VA 22180