To get the best deal, do your homework before buying or selling a house Sellers must spruce up, buyers examine finances

December 29, 1991|By Monica Perez | Monica Perez,Copley News Service

Three years ago Joan and Tim Jameson put in an offer on a coastal Southern California home without even seeing the inside of it. Within six months they turned around and sold it at a $10,000 profit.

"If we were buying the same house today, not only could we make more demands as buyers," says Mrs. Jameson, "but we'd have to work at selling it, and no way would we make that size profit so quickly."

The home buying/selling market has slowed. If you're a seller, it's not necessarily a glum picture, if you've priced your home reasonably. And for a buyer, it's actually good news.

To buy a new home, most of us need to sell the one we have. Your first step, even before you start making your house market-ready, is to find a real estate agent. You think you can save money by selling the house yourself?

"While sellers sometimes opt to market their residential properties themselves, research indicates that it's highly unlikely that they'll succeed in doing so," said Clark Cornman, senior vice president/Resale Division for Great Western Real Estate.

It is estimated that more than half of the properties initially marketed as "for sale by owner" end up listing with a real estate firm later. Nearly 85 percent of all home sales are handled by such agencies.

The reasons are good: A professional agent will handle the sale of your home like a job, something you probably don't have time to do. An agent can list your home in the local Board of Realtors' Multiple Listing Services book (MLS), which makes the house visible to all the other area Realtors -- agents with buyers using the MLS.

Licensed professionals are trained to qualify buyers, to complete all the documents correctly, to market the house and to advise you on any changes that might make your home more attractive.

According to the Society of Real Estate Appraisers, some of the best improvements you can make before putting a house in the market include:

Clearing out clutter inside and out, including getting rid of excess furniture, which will make rooms appear larger. Clean walls, floors and ceiling and, if necessary, paint (in a neutral color, such as off-white). Have carpets shampooed and draperies cleaned. Repair leaky faucets, squeaky doors and loose handles.

Create curb appeal by keeping the lawn mowed and healthy, the weeds pulled and overgrown shrubbery cut back. Set a cozy stage by dressing up the walkway with small flowering plants; have some potted flowering plants arranged by the front door. Paint or refinish the front door -- it's your home's "first impression."

Don't do any major remodeling now; you probably won't realize a full return on the investment. However, do consider replacing ripped vinyl flooring, damaged window screens and anything that makes the house appear shabby or uncared for.

Before setting foot into a potential new home, you must have your homework ready -- you need to know how much house you can afford.

Your banker or real estate agent can help you work out the math, because it involves several factors, including hidden expenses such as the moving company and necessary home repairs and/or improvements; interest rates; increased taxes; more insurance, etc.

Determine the monthly amount you are able to pay, and your banker, financial adviser or broker can take it from there. According to Coldwell Banker, home mortgage packages have become extremely complex: There are more than 60 combinations available!

In addition to fixed and adjustable rate loans, some variations include: assuming an existing loan; government-subsidized loans; lease options; seller financing; renegotiable mortgages; and graduated rate loans.

Next, determine your priorities in the house's location: Do you want to live close to work. Are schools important? Are sewer, fire and police services available? Some other issues: public transportation, typical age of neighbors, nearby parks.

Next, determine your needs.

Do you want a new home or an older one? Remember, if you purchase new, you may not have the cost of replacing the plumbing in the next decade, but you could face landscaping and "finish" work indoors. Again, builders are in a bartering position; don't be afraid to ask for a few extras.

Make a list of things important to you in a house, and put them in order of importance. If you're a renter and it all sounds too impossible a dream, at least talk with a banker and/or agent.

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