When you prepare to sell your home, it is common to experience a whole host of emotions. Most experience excitement about moving, reluctance to leave the home you created, and all the uncertainty about value can cause confusion. There are several steps to get ready to sell your home. While you are getting ready, you will do yourself a favor to keep in mind that you are emotional and the prospective buyers are going to be emotional as well. Start by writing a letter to prospective buyers telling them why you love to live in your home. We provide our clients with lots of example of these letters to get you started. It is important to focus on what is around you, where you hike, bike, grocery shop, and what community activities are available.
When you are selling, it is best to remove as much emotion as possible. You want buyers to come into your home and see it as theirs. Begin to think of your home as a commodity and dress it up for others. One of the first steps is to “de-personalize” it. You want buyers to view it as their home. When a potential homebuyer sees your family photos hanging on the wall, this says, “this is my home, not yours.” It is best to store your family photos, sports trophies, and anything else that is uniquely you. Also, you want to get rid of as much clutter as possible. Get your real estate broker and friends to give you an honest opinion about the things you have around your home. Typically, once you complete this process, your home will feel a little empty to you. That’s okay. Put yourself in the shoes of the potential buyers. The goal is to get them to imagine they could live in your home. You want it to be inviting. If you have too much furniture or too many of your own personal things around, you create obstacles for buyers to imagine their things placed in your home. Also, don’t forget to make your home smell clean. That might sound a little funny, but trust me, when I show homes to buyers, if there are funny smells, buyers tend to spend less time in those homes. The more time a buyer spends in your home, the better.
Educate yourself on financing and understanding what you need to do to be able to close on the home of your dreams. One of the first things I say to my clients is, please do not move money around and don’t buy a car while trying to buy a house.
Given the high amount of foreclosures in the past few years and the mortgage melt down, lenders have tightened requirements for loan approval. Now, buyers and mortgage brokers have to jump through a lot of hoops in order to get loans approved. Now, buyers and mortgage brokers have to jump through a lot of hoops in order to get loans approved. It is mission critical that you work hand-in-hand with your mortgage broker and/or lender and have a high tolerance for providing requested documents. If you are self-employed, you will have to jump through even more hoops. If you have an excellent mortgage broker, he or she will be able to prepare you for what you will need to do.
Make sure you have proof of the source of funds you will use for your down payment and closing costs. You will likely need to provide copies of the last two months of your bank statements and stock statements. If you have moved funds between accounts, you will need to have a paper trail of those transfers. It’s probably best to leave your money where it is until you have confirmation from the lender that you are clear to close. You may even need to provide copies of cancelled checks and deposit receipts. It is important that you have patience and cooperate fully. Remember, your mortgage broker does not make up the rules. They are merely following policy guidelines and jumping through the hoops that the underwriters have created.
Keep in mind that your FICO credit score needs to be as high as possible. If you buy a car or other large ticket item, this can drop your credit score and make it more difficult to obtain a home loan. Before paying off credit cards or making purchases, speak with your mortgage broker or bank. Credit scores are tricky, so do not assume that doing something logical will help. However, here is one quick tip that raises most folk’s score: go to OptOutPrescreen.com. Do not opt out permanently, just do so for 5 years.
Also, very importantly, have fun. We talk about how much fun we want this process to be. You should be laughing and really enjoying getting to see the beautiful homes in the area. Further, learn about the culture of the areas where you want to live. Start investigating the communities and be comfortable with where you are going to put down roots. Remember, you are going to be creating your home… or as I like to call, your sanctuary.