Sellers Advisory

Home Valuation

It’s the most basic question in real estate: How much is a home worth?

Whether you’re buying a house, selling one, refinancing a mortgage, or making home improvements, home-value considerations are paramount. 

That’s where HomeSmart can help. We’ve gathered comprehensive home-value data from across Arizona, so you can see what your home is worth and how it compares to other houses in your neighborhood. Our expert guides will help you understand how banks and appraisers determine home values; figure out the best way to put your home equity to work for you; and maximize your home’s value with smart improvements that pay you back at resale. After all, no two properties are alike, which is why understanding the nuances of home value is key to getting the most for your real-estate dollar.

Remember...it's a Smart Move with HomeSmart!

Preparing Selling

Knowledge and experience are the keys to a successful real estate transaction. HomeSmart agents have the knowledge and experience to make the home-selling process easier and more understandable. Because our goal at HomeSmart is to provide you with the most informative and professional service available, we have included an overview of what you can expect throughout the home-selling process.

You have already made the Smart Move by choosing to contact a HomeSmart agent to represent you in the sale of your home. The next step is to prepare your home for presentation. Your HomeSmart agent will assist you in preparing your home and will help you see your home from a potential buyer's perspective. This is a great time to consider purchasing a home warranty, the benefits of which you HomeSmart agent will discuss with you.

When you receive a contract to purchase your home, your HomeSmart agent will explain the terms to you, and help you to understand the most important terms of the contract. Your HomeSmart agent will also explore all the available information pertaining to the potential buyer, including his/her ability to qualify for a mortgage for your property. Your agent will go over closing costs with you at this time, and will explain what you should expect to net at the close of escrow, should you decide to accept the offer.

Once you have accepted an offer, the buyer of your home has a period of time in which to inspect the property. At this time, your HomeSmart agent will ask you to fill out a form, generally termed the Property Disclosure Statement, to provide to the buyer. In this document, you will disclose everything you know about the history of the property. The buyer may make physical inspections of the property such as a pest inspection or a full inspection by a certified home inspector. You are not required to be present at the time of the inspections, unless you would like to attend. After the inspection(s), the buyer may make a request that certain repairs be made to the property. Your HomeSmart agent will help you determine which repairs should/shouldn't be completed to help you arrive at a fair agreement.

Here at HomeSmart, we know that the sale of your home is only part of the overall picture. Our goal is to make sure that the entire process, including the move into your new home is as smooth a transition as possible. In order to do that, we will provide you with helpful hints such as packing tips and moving checklists.

A few days prior to closing on the sale of your home, the buyer will have the opportunity to conduct a final walkthrough of the property and verify that nay repairs requested have been completed, and that the property is in substantially the same condition as on the date of contract acceptance. It is around this same time that you will go sign all the closing documents to finalize the sale.

We hope this overview has been helpful. We are committed to providing you with the most informative and professional service available now and in the future.

Remember...it's a Smart Move with HomeSmart!

Is The Buyer Qualified

Unless the buyer who makes an offer on your home has the resources to qualify for a mortgage, you may not really have a sale. As a general rule, buyer's speak with a lender before looking at property in order to determine what they can afford. When your HomeSmart agent presents an offer to you, it will most likely be accompanied by some sort of letter or pre-approval form signed by their Lender.

Should you decide to accept an offer from this buyer, and the house goes into escrow; your HomeSmart agent will speak with the lender in order to confirm that the mortgage can be obtained under the terms of the purchase contract. Here are some important questions that your HomeSmart agent will ask the Lender:

1. Does the Buyer have enough credit to qualify?
2. Does the Buyer’s debt-to-income ratio allow them to qualify for this mortgage?
3. Does the Buyer have enough money to pay for the closing costs and down payment?

Once these questions have been answered, you can move forward with the closing process, knowing that the Buyer will most likely be prepared with a mortgage at the close of escrow.

What You'll Net At Close of Escrow

When your HomeSmart agent receives an offer to purchase your home, they will help you to determine what you’ll net at the close of escrow. In order to do this, they will look over the terms of the contract, as well as ownership information, such as your mortgage payoff, and insurance and/or tax prorations. To find out how much money you’ll net from the sale of your house, add up your closing costs and subtract from the sale price of your house. Here is a list of closing costs that you may incur as a seller:

• Mortgage Payoff
• Prorations for Taxes
• Prorations for Association Dues / Utility Dues
• Escrow Fees
• Title Policy Fees
• Home Warranty
• Attorney Fees
• Survey Charge
• Septic / Well Certification
• Brokerage Commissions
• Seller Contribution

Your HomeSmart agent will review these costs with you, and determine approximately what you can expect to net at closing.

Inspections To Expect

When your home is under contract, the buyer has a period of time in which he or she may inspect your home. Some inspections to expect are:

• A home inspections performed by a certified home inspector
• A wood destroying organism inspection
• If applicable, a survey, septic and/or well inspection. 

Although there aremany other types of inspections available to buyers, these are generally the most common.

Some of the items typically investigated during a home inspection are:

• Appliances
• Plumbing
• Electrical
• Heating and cooling systems
• Structure
• Foundation
• Roof and attic. 

If any of the following are areas of concern, the buyer may ask the inspector to address concerns regarding indoor air quality,expansive soil conditions, previous fire or fold, pests and mold.

Prior to closing, the buyer will conduct another “inspection”, usually referred toas the final walk-thorough. This is where they will confirm that any repairs agreedupon have been completed and that the home is in the same condition as whenthe offer was written.

Preparing For Your Move

Preparing for your move to your new home can seem intimidating. There is always something that is forgotten, but generally with some planning, the move will go smoothly.

As you begin to pack, remember to start gathering boxes and packing materials such as markers, packing tape and twine. Label the contents of each box you pack and number them. Keep a list handy of what is in each box in case you need o find something. It is a good idea to keep toiletries, cleaning supplies, snacks and water handy throughout your packing day.

You’ll want to contact the utility companies to disconnect your current service and to establish service at the new property. Don’t forget to request that any deposits you may have provided either be refunded or transferred. Electric, Water, Gas Phone and Cable are the most frequently contacted, however, there may be additional services that you need to connect at the property.

If you have children or pets, you may want to arrange for someone you trust to watch them on the day of the move. Sometimes moving day can be stressful for them. Make sure to include your children prior to the actual move, and talk to them about where they’ll want to place all their things in their new room.

Place all of your legal, financial and insurance records in a safe place. You may want to consider taking them with you personally rather than with the movers. It is also a good idea to back up important files from your computer onto a CD or back-up drive.

Verify the date of your move with the moving company you have selected or with your friends and family if they are helping you move. You can create a list of where each box or piece of furniture should be placed so whoever is helping with the move can follow your instructions.

Moving day can be stressful, but is still exciting! At HomeSmart, we strive to provide our clients with as much information and assistance as possible to make the process easier for you.

Understanding Capital Gains

When you sell stock, you owe taxes on your gain – the difference between what you paid for the stock and what you sold it for. The same is true with selling a home, but there are some special considerations.

In real estate, capital gains are based not on what you paid for the home, but on it’s adjusted cost basis. To calculate this:

1. Take the original purchase price of your home (the sale price, not the amount of money you actually contributed at closing)
2. ADD adjustments:
• Costs of the original purchase – including transfer fees, attorney fees, inspections (not points paid on your mortgage)
• Costs of the current sale – including inspections, attorney fees, real estate commissions and money spent to fix up the home right just prior to the sale
• Costs of improvements – including room additions, decorations, etc. (Note that the improvements do not include repairing or replacing something already there, such as putting on a new roof or installing a new furnace)
3. The total of this is the adjusted cost basis of your home
4. Now SUBTRACT this adjusted cost basis from the amount you are selling your home for. The difference is you capital gain.

Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of your home is exempt from taxation if you meet the following criteria:

• You have lived in the home as your principal residence for two out of the last five years.
• You have not sold or exchanged another home during the two years preceding the current sale.

Also note that as of 2003, you may also qualify for this exemption if you meet what the IRS calls “unforeseen circumstances” such as a job loss, divorce or family medical emergency.