It's a big question for many folks who have been waiting. If you need to sell your home, timing is everything. Many would-be sellers have been waiting – since about 2008 - for prices to go up. The good news is that prices seem to have stabilized. Fact is no one knows what the future will bring, and when home prices will climb again. If you need to get moving, is it wise to bet on another bubble, or should you grab a bird-in-the-hand, and sell now?

Smart selling requires careful planning. Here are three steps to help you make this important decision without going crazy.

 

Step One - Move to Where? 

 

 

First step is to identify your goal. Are you relocatin to another area or another state for family, job, or other pressing reasons? Do your homework first. I receive many inquiries from people who want to move to Hawaii. Some of these people are ready to jump on a plane without the slightest idea of the economic realities, job prospects, cost of renting or buying a home, or where their kids will go to school. Some were last here in 1962 and are charmingly clueless. They have carried their vision of paradise with them since then. Don’t pack up for Las Vegas or elsewhere without planning your strategy first.

Make a “feasibility Study” of the cost of living where you are heading. Be open minded to other areas. Determine what you will need to spend to rent a suitable house or condo, as rentals are in short supply in some areas, some areas are more expensive than Oahu.  One great way to look at living expenses in different areas is http://www.homefair.com/real-estate/city-profile/index.asp. Also check out medical facilities, climate, cost of utilities, job market, and other issues before you start packing. 

 

 

 

Step Two – Financial Planning is Mandatory!

Speak to a financial planner and tax advisor. Timing is crucial to benefit from legal loopholes and possibly avoid paying taxes on any profit you may have. If you have not lived in your home for at least two years, you need to know for sure where you stand on capital gains. If you are among that group of people who have a large mortgage and are selling are under a financial hardship, you may be eligible for a Short Sale. This is a complex matter so you will need some professional advice – real estate and otherwise -   before proceeding. There are huge tax advantages of home ownership for most people, but the devil is in the details.

 

Step Three - What is Your Equity?

It all depends on what your home is worth. It’s best to have a real estate pro or a licensed real estate appraiser help you here. Online tools such as zillow.com and trulia.com can be useful, but they are highly unreliable where nearby homes vary in value and features, and also where there are not many similar homes sold in the past 3-6 months. An expert can give you a rough estimate of your equity, which is what you will have left after you sell. Remember that typical selling expenses average 6–7.5 % and include title and escrow fees, state conveyance taxes, surveys, termite inspections as well as real estate commissions. You will need to have enough left over to pay your mortgage as well as those fees.  If you run short, you may still be able to sell, but will need help with a Short Sale, a much more complicated sale involving approval from the bank.

 

 

Chicken Little or Pollyanna?

You need to decide if you will time your sale based on a “worst-case-scenario” (real estate prices plummet drastically!), a pie-in-the-sky hope (Hawaii real estate prices skyrocket in 2012!), or a more moderate in-between viewpoint. You can find an economist or journalist to argue either case. Make sure you will be OK under a wide range of possible circumstances. It's not an easy decision, as housing is tied increasingly to the international economy, and the future is always unknown.

 

For Optimists: Wait to sell, prices are going up!

If you believe the market is going up, you can choose to wait for sunnier skies. This could be a solid plan if you don’t have to move for a job, family, or financial reasons.  Look for qualified sources of data showing that prices will be higher next year, or in 2 or 3 or 5 years.  You should seek evidence for your opinion, not just a hunch. Is it a reliable source with a track record for correct predictions? Here is a link to the detailed housing statistics from the National Association of Realtors http://www.realtor.org/research/research/reportsstatistics.   Some believe that this source tends to give a rose-colored spin on the data. Remember that if you move to a place where the market goes up or down in sync with Hawaii, any market benefit or penalty will be somewhat equalized when you buy.

 

 

For The Cautious: Sell Now – Why Risk the Future Market?

A good case can be made for selling now. The future holds so many unknowns. Hawaii has been greatly affected by cautious vacationers and nervous real estate investors. Our nation’s economy is far from robust, and the news is shaky in Europe and elsewhere.  Who knows when it will get better? 

 

 

Mortgage guidelines are getting complex and challenging by the week. When interest rates go up (and it’s just a matter of time) there will be even fewer buyers able to jump through all the flaming hoops just to get a loan. Then there is the “shadow inventory” – those are the homes with owners who want to sell, but have been waiting for prices to rise. If and when they decide to sell, there could be a tsunami of properties competing for a shrinking pool of buyers. If you don’t want to take the chance on an unknown future, or if you just need to go forward regardless, now is the time to sell.

 

OK, Let's Sell!

Want to put your home on the market in the next month or two? This means making your home shine like a jewel prior to letting a buyer get near it. In a sluggish market, you need to make your home look better than the others in its neighborhood and price range. Your efforts and expense at this stage will give you a good return for the time and money spent.

 

 

1. Clean It Up: A fresh, clean look will add dollars to your sale price and encourage a quick, painless sale. Fixer Uppers sell cheap. Buyers overestimate the cost of redecorating and repairing, and deduct that inflated estimate from their offer price.
    
2. Add Curb Appeal: First impressions are crucial! Drive by your home as if you have never seen it before. Hard to do, but that’s just one reason why you need the advice of an experienced Realtor. 
    
3. Fix the Plumbing: Dripping water rattles the nerves, discolors sinks and suggests faulty or worn-out plumbing. Drains that don’t will plug up a sale. Running toilets will chase buyers away. Fix these little problems so they won’t detract from what's right about your home. It’s best to use a licensed plumber as always.
    
4. Call the Handyman: Lubricate jalousies, and vacuum gunk out of sliding door and window runners.  Doors, locks, and windows should be easy to operate. If cabinets or closet doors don’t work, get them fixed.
    
5. Eliminate Booby-Traps: Homeowners learn to live with all kinds of quirks: wobbling fans, hanging extension cords, flickering lights, missing bulbs, loose handrails, sagging rain gutters, slippery throw rugs, and noisy pipes. Even coconuts can present a real threat, if your trees are not pruned regularly. Remove these hazards before you let buyers into your property. 
    
6. Unleash Your Storage: Potential buyers are looking for more than just comfortable living space. They're looking for storage space, too. Make sure your garage, attic and crawl space under the house are clear of junk and debris. Have that garage sale now, before you market your home.

 

These are general recommendations based on my experiences and opinions.  Let your Realtor give you specific suggestions tailored to your home and your needs. The right planning makes all the difference in the sale price, the hassles along the way, and a smooth and a successful outcome.  If you need candid advice you need on what to do to maximize your sale price, feel free to call or email me directly to stephanieg@remax.net.  I can also refer you to a qualified real estate pro anywhere in the country or the world. And you can search for homes across the nation and the globe here - no login required - www.remax.com. 
 
© 2011 Stephanie Gieseler, Honolulu, Hawaii. All rights reserved.

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