A Survival Guide to Selling a Home

A Survival Guide to Selling a Home

by Sid Davis

"Homesellers who spend a little time and effort making their homes more marketable will net thousands of dollars more than those who simply put 'For Sale' signs up on the front lawn and call it a day.

A Survival Guide for Selling a Home helps readers face the challenges of deciding whether or not to use an agent (and how to find one), estimating a


"Homesellers who spend a little time and effort making their homes more marketable will net thousands of dollars more than those who simply put 'For Sale' signs up on the front lawn and call it a day.

A Survival Guide for Selling a Home helps readers face the challenges of deciding whether or not to use an agent (and how to find one), estimating a price, and deciding which upgrades are worth making — and which ones are not — to add to their home's value. Featuring handy checklists, worksheets, and examples, the book takes readers step by step through the process of selling their homes, giving them valuable information on essential topics including how to:

• prepare the home to be shown
• negotiate offers
• avoid costly mistakes

• attract serious buyers through marketing
• take the stress out of closing
• and get top dollar in any market

In addition, the book discusses options such as renting and keeping the home as an investment, tips on moving and storage, and even a list of the seven biggest and costliest homeselling mistakes."

Editorial Reviews

From the Publisher
"...a superb book about selling a home.... With chapter after chapter of good advice from the experienced real estate broker, this book struck me as one of the best I've read on how to sell a home — and I've read virtually all of the new ones."

—Robert Bruss, syndicated columnist

Product Details

Publication date:
Product dimensions:
6.16(w) x 8.90(h) x 0.62(d)

Read an Excerpt

A Survival Guide for Selling a Home

By Sid Davis


Copyright © 2005 Sid Davis
All right reserved.

ISBN: 0-8144-7274-5

Chapter One

Prep Your Home to Sell for More

Home sellers who spend a little time and effort making their homes more marketable will net thousands of dollars more than the homeowner who pushes an 18 by 24 inch, red and white, plastic For Sale sign in the turf and calls it a day.

Selling a house is very similar to selling a car. For example, take someone who wants to sell an SUV and buy a better model. Likely he will put a lot of energy into cleaning the inside and carefully applying a protective coat to the vinyl or leather interior. The chrome wheels shine from having been cleaned with fine steel wool and metal cleaner, tires are sporting a shiny black coat, the engine compartment is degreased and looks spotless, and an air freshener is hung from the inside mirror. Many owners even prepare a history of oil changes and service work as proof the car has been lovingly cared for.

Why do they do this? Because they know competition is stiff. There are lots of vehicles on the market, shined and pampered just like his. But most important, the owner's goal is to get as much money as possible. He's researched the market and knows the price down to the nearest dollar. If all goes right, maybe he can get anywhere from a few hundred to a couple of thousand dollars more than he would if he traded in the car.

Similarly, you should approach selling a home much like selling a prized SUV-only instead of trying to make a few hundred to a couple of thousand extra dollars, you're working to increase your closing check by tens of thousands of dollars.

Selling your home is not astrophysics, it just takes knowing what to do and focusing on doing it. Whether you plan on working with an agent or selling on your own, this book lays out a road map with the shortcuts clearly marked. You will not only have fun selling your home, you'll end up with the biggest closing check possible in the shortest time.

To get started, let's take a look at home equity and the two ways it increases.

It's All About Equity

When you're selling your home, you're looking to get the most equity possible. In a way equity is your closing check-what you walk away with after the deal. It's the sales price after subtracting the selling costs and the mortgage balance.

Equity, as the real estate types call it, grows by a combination of paying down (amortization) the mortgage balance each month and the house going up in value (appreciation). If you're one of the unlucky sellers who end up with the selling costs and a mortgage balance larger than the sales price, you've got negative equity. That means that at closing you'll have to write a check rather than deposit one.


Of the two types of equity, amortization is the least important in the short term. That's because in the early years of a 30-year loan just about all the payment goes toward interest.

Because so little of the payment goes to paying down the principle, it takes several years before there is a significant increase in equity. For example, a 30-year mortgage for $180,000 at 6 percent interest will only pay down the loan by $2,210 the first year, and by $29,366 after ten years.


The second equity builder, appreciation, is a lot more exciting. You make money by your home going up in value.

To give you an idea how quickly a home's value can increase from appreciation, suppose home values in your area went up 4 percent in the last year. If you bought your house last year for $200,000, your home has appreciated $8,000 ($200,000 x 4 percent). In that same year, you may have only paid down the mortgage a few thousand dollars, even with a low interest rate. In some urban areas, homes have appreciated more than 4 percent a month, which would make the difference even greater.

As you can see, appreciation is the key to making big bucks, so you want to do all you can to take advantage of it. Lucky for you, there are things you can do to help your house appreciate. Part of appreciation depends on the value of homes in your neighborhood. If, for example, crime goes down, school performance goes up, or commuting suddenly becomes easier, the value of your home will appreciate. But these things are hard to control.

Another part of appreciation is the condition and appeal of your home. If your home is in excellent condition and "feels" like a home, people will pay more for it. And that's the key to selling your home for the most money possible-making sure your home appeals to buyers on an emotional level. There are buyers who will pay top dollar for a home and the next section shows you how to attract these types of buyers with the least amount of money and pain.

Increasing Your Home's Value 101

Few things are more controversial among Realtors, remodelers, decorators, and appraisers than which upgrades add value and which ones are a waste of money. It can be a difficult call because you're trying to predict what colors and decor a total stranger will like. And no matter what you do, some people will like what you've done and some won't.

In one instance, a Realtor advised her clients to install new carpet, replace aging fixtures, and give the kitchen a make-over. The sellers spent about $35,000 to make their home "more saleable."

In the end, the home ended up selling close to asking price, but before the buyers moved in they tore out and remodeled the kitchen and replaced the carpets and floor coverings. Obviously, the new buyers didn't like the previous owners' decorating taste.

This brings up some interesting questions: Were the seller's upgrades wasted in this case? Would the buyers have bought the home without the upgrades, and would they have paid the same price? Who knows for sure. It's possible the new owners had gone through a home show the week before closing and saw their dream kitchen they couldn't live without.

Improvements That Pay, Improvements That Don't

There are three types of home improvements: the first adds to or maintains the value of your home; it's a good type and wears a white hat. The second makes your home a better house and more saleable, but it doesn't always increase the value significantly; that still makes it a good guy in a white hat. The third type costs you money and wears a black hat; it doesn't add value or make your home more saleable and sometimes it can lower the value or make your home harder to sell.

The important thing to remember is that the super-charged, mega-horsepower engine powering home sales is emotion. When buyers look at a bunch of homes and none exactly fits their mental picture of what they would be happy living in, they'll go into "can we redo this to get what we want" mode. Even though your home may need updating, if the charm and potential are there and buyers can visualize it becoming their dream home, then you'll likely get a good offer.

Of course, price range is also a critical factor. If buyers are stretching financially to get into a home, their focus will be more on finding a house that won't need much improvement when they move in. But, on the other hand, if they're moving up into their second home, then location, charm, and condition become high on the list.

Let the Area Guide You

Unfortunately, you don't have a crystal ball to peer into to know what buyers are thinking, so you have to go by what type of buyers the homes in your area are attracting.

For example, in a particular subdivision nine out of twelve sales only went through when the sellers agreed to pay part of the closing costs to help buyers qualify. As a result, when the agent worked up pricing for a listing in this area, he pointed this out to the sellers and prepared them for this type of offer.

Sure enough, two weeks later an offer came in requesting the owners pay $3,200 toward the buyer's closing costs. The sellers were prepared for this and had a counter offer ready. The counter was eagerly accepted and the deal closed a few weeks later.

If your area is more upscale and attracts move-up home buyers, then condition can become more critical. Many buyers can't or won't visualize what your home would look like if changes were made. For them, it's easier to go to the next home on the list than to strain neurons visualizing new carpets or paint colors.

True, there are a few buyers who are decorator- or color savvy. But, in the real world you want to market to the 90 percent-the average buyers. It's marketing suicide to use your advertising resources trying to attract the few who may or may not consider your home as-is. In other words, if vanilla is the best-selling ice cream, why try to sell bubble gum pistachio!

How to Determine What to Upgrade and Save Big Bucks

Before you fall into the expensive trap of blindly replacing carpet and new kitchen cabinets, there are three things you can do to save a lot of work and a few thousand dollars.

First, check out the competition. If you have a Realtor, ask her to run a list of homes similar to yours that are for sale in the area. If you don't have a Realtor, you should seriously consider using one. They could save you a lot of time, hassle, and money, and in a transaction as big as this you really want a professional on your side. If you want to try going it alone, access the multiple listing service (MLS) at realtor.com/ and look for homes in your area. These are the homes that buyers are looking at and comparing your home to.

Second, go through these homes and look at them as if you were a buyer. Be objective: think like a buyer, take lots of notes, and use the handy comparison chart in Figure 2-1.

Third, notice what upgrades the competition has that your home doesn't have. Keep in mind that you don't want to be a lot better, just a little bit better. Otherwise, you risk over-improving your home for the area and wasting time and money. You need to spend only enough money to give you an edge.

Examples of overkill are putting in high-end countertops like Corian or granite when other homes in your price range have laminate, or upgrading floors to wood or tile when other homes have vinyl, and so on.

A home comparison worksheet (Figure 2-1) can also give you a feel for which improvements you'll need to make to be competitive. After you've completed the worksheet, make a list of the items you'll need to improve along with cost estimates. This will probably require a trip to the nearest home improvement center to get prices.

For items that need professional installation, like floors, cabinets, and countertops, get three bids and compare them for the best deal.

What Buyers Expect to Be in Good Condition

In addition to indoor plumbing, there are some things buyers expect to be in good condition before they'll even consider the home. To put your home at the top of the food chain consider the following:

Painting. This is the number one improvement you can do to make your home more appealing. It's almost a cliché, but an eggshell finish or white with just a tint of beige is still the best color. Go with a high-quality paint, it's not only easier to apply but it looks better too. Going with off-white walls makes your home look bigger and helps the buyers visualize their pictures and their furniture in your house. When that happens, it's more money in your pocket.

Furnace/Air Conditioner. Buyers expect a home to have reasonably new and working heating and cooling systems. If your system has a problem, fix it before showing the home.

Roof. Buyers expect a home to have a water-tight, problem-free roof. If it has problems, replace or fix it before putting the home on the market. If the roof is ten years old or older, get a roof inspection from a licensed roofing contractor. Make sure the inspection report states clearly about how many years the roof is good for. Should a buyer ask about the roof, you'll have the paperwork to back you up.

Floor Coverings. If you have to replace carpet or vinyl, go with a neutral color that goes with about anything. If you've gone through the competition's homes, you'll know exactly where you stand on this item. Kitchen Cabinets. One successful husband and wife home rehab team who buys, fixes up, and sells several homes a year rarely replaces kitchen cabinets. They carefully sand the cabinets and paint them with a high gloss white paint or stain and refinish the wood if it's in good condition. There are lots of options to replacing them.

Exterior. Look for and fix damaged gutters, exterior sheathing, concrete, garage doors, and so on. You can count on buyers walking around your house with a critical eye.

Appliances. Replace any appliances that look worn or are at the end of their service life.

Interior Surfaces. If the interior paint is still in good condition, wash the walls and other surfaces with a good household cleaner. Better yet, hiring a cleaning service for this project can be worth it, especially if you've got high or vaulted ceilings.

Many homes are sold by word-of-mouth from neighbors. If your home has a reputation for being in great condition, you may get a quick sale as soon as everyone sees the sign go up.

Arnold and Nikki sold their home this way when they put their "Mrs. Clean lives here" six-year-old two-story colonial on the market. A neighbor told her friend at work, who had a sister looking for a home. The neighbor so raved about the home, how well it was maintained, and how clean it was that the home buyers were nearly presold. They made a full-price offer after a quick walk-through.

On the other hand, if you're "Mr. Clean-challenged" you'll need to do some work to bring the home up to selling condition. Hiring a home cleaning service to do the job is an investment that is certain to pay off with a better offer. Two interesting home cleaning Web sites are cleaning.com and merrymaids.com.

If you also have a clutter problem-which many homeowners have-you may also consider calling an organization consultant who works with homeowners to bring clutter under control. Check out the phone directory-under organizing products and services-for consultants.

Of course, once your home is in top condition you'll want to invite as many people through as possible so you can get a buzz going about how nice your home looks.

Improvements That Help Sell

The next improvement category deals with those things that help sell a home, but which don't necessarily increase its value.


Excerpted from A Survival Guide for Selling a Home by Sid Davis Copyright © 2005 by Sid Davis. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Meet the Author

Sid Davis (Farmington, UT), owner of Sid Davis & Associates, has over 25 years of experience as a real estate broker and home renovator. He is the author of A Survival Guide for Buying a Home and has written numerous articles for publications including The Los Angeles Times andToday's Home Owner.

Customer Reviews

Average Review:

Write a Review

and post it to your social network


Most Helpful Customer Reviews

See all customer reviews >