(January 2005) Download Article in PDF Format

Many people talk about the "Spring Selling Season" as the best time to purchase or sell a house. However, "Spring Selling Season" is a misnomer, since the real estate market really gets rolling in late February. As a result, if you're interested in buying a new place or selling your current place (or both), the start of the new year is an excellent time to take stock of your real estate situation.

Sellers

If you've decided to sell your residence, you may want to consider taking the following steps:

1. Figure out what your residence is worth. This is no time for ego - if your house is really worth $150,000, it may not make sense to offer it for sale at $250,000. Of course, the big question involves what your house is "really" worth. Realtors can give you a general idea of value, but some realtors may be more interested in winning your business (with a flatteringly high sales price estimate) than in providing a realistic value quote. For a more in-depth, accurate assessment, consider using a licensed appraiser, whose analysis will be based on the attributes of your house and recent sales of comparable properties in the area.
    
2. Choose a realtor. There are two things to keep in mind here. The first is that you really do need a realtor. Yes, I know that it's not fun to pay a commission. But it's even less fun to try to handle the sale of your residence by yourself - it's just too time-consuming and complicated. However, you should also remember that you are "driving the bus." You should take the realtor's suggestions - about commission, the terms of the listing agreement including sale price, etc. - with a grain of salt, and should even consider (self-interest alert!) having an attorney review your listing agreement before you sign.
    
3. Decide on repairs and improvements. Your realtor will have lots of helpful suggestions on this point, and can discuss some relatively easy steps (e.g., general cleaning, a coat of paint) to showcase your home for sale.

Buyers

Potential buyers of real estate may want to do the following:

1. Determine what you can afford. This is a personal question, and everyone is going to have a different answer. In deciding how much they will loan to you, lenders may use a formula that considers your potential mortgage payment, your other monthly bills, and your household's gross monthly income. That's all well and good, but your lender doesn't know about your future job plans, or your level of comfort with debt. Consider the lender's formula to be a ceiling - now you have to set the floor. Of course, the question of what you can afford may influence where and what you buy. Keep in mind that prioritization is key - think about what you must have (walk to train? two full bathrooms? two-car garage?), and what you want but may not get (master bedroom suite with built-in fireplace and whirlpool).
    
2. Choose a Realtor. It's great fun to cruise the listings on www.realtor.com, but many of the houses found there are as stale as a week-old bagel. For the freshest listings, you need access to the Multiple Listing Service (MLS), which means hiring a realtor. As a buyer, your realtor's commission will be paid by the seller, but you'll still want to do your due diligence. Personality-wise, you'll want to choose someone who listens to you and respects your wishes. If you previously decided that you can spend no more than $300,000 for a residence, and that a two-car garage is a top priority, your realtor shouldn't be showing you $400,000, garage-less listings.
    
3. Choose a lender. Everyone wants the lowest mortgage rate, but you also need to consider the quality of the lender and your loan officer (or mortgage broker). Before the closing, you are going to be spending a lot of time working with these people, and incompetence on their part can really foul up a transaction. (One example: My clients were ready to buy their first home, and we'd been told weeks before that their loan was approved and ready to close. I received a call from the lender on the afternoon before the closing, saying "We're not going to have the documents ready by tomorrow - you'll need to reschedule the closing for next week." The explanation given was that a number of people in the office were on vacation, so no one had a chance to prepare the documents.) If you like the place you bank, consider discussing a loan with them. Another idea: I work with a lot of mortgage brokers, some good and some bad (and some downright scary) - I maintain a list of some really good ones, which I will share upon request.

For questions about preparing to buy or sell a home, please consult a qualified real estate attorney.