1. Get estimates from a reliable repairperson on items that need to be replaced soon, such as a roof or worn carpeting, for example. In this way, buyers will have a better sense of how much these needed repairs will affect their costs.
   
   
2. Have a termite inspection to prove to buyers that the property is not infested.
   
   
3. Get a pre-sale home inspection so you’ll be able to make repairs before buyers become concerned and cancel a contract.
   
   
4. Gather together warranties and guarantees on the furnace, appliances, and other items that will remain with the house.
   
   
5. Fill out a disclosure form provided by your sales associate. Take the time to be sure that you don’t forget problems, however minor, that might create liability for you after the sale.
   
   

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1. Price it right. Set a price at the lower end of your property’s realistic price range.
   
   
2. Get your house market-ready for at least two weeks before you begin showing it.
   
   
3. Be flexible about showings. It’s often disruptive to have a house ready to show on the spur of the moment, but the more often someone can see your home, the sooner you’ll find a seller.
   
   
4. Be ready for the offers. Decide in advance what price and terms you’ll find acceptable
   
   
5. Don’t refuse to drop the price. If your home has been on the market for more than 30 days without an offer, be prepared to lower your asking price.
   
   

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1. Trim bushes so they don’t block windows and cut down on light.
   
   
2. Buy a new doormat.
   
   
3. Put a pot of bright flowers (or a small evergreen in winter) on your porch.
   
   
4. Put new doorknobs on your doors.
   
   
5. Put a fresh coating on your driveway.
   
   
6. Edge the grass around walks and trees.
   
   
7. Keep your garden tools out of site.
   
   
8. Be sure kids put away their toys.
   
   
9. Buy a new mailbox.
   
   
10. Upgrade the outside lighting.
    
    
11. Use warm, incandescent light bulbs for a homey feel.
    
    
12. Polish or replace your house numbers.
    
    
13. Clean your gutters.
    
    
14. Put out potpourri or burn scented candles.
    
    
15. Buy new pillows for the sofa.
    
    
16. Buy a flowering plant and put it in a window you pass by frequently.
    
    
17. Make a centerpiece for your table with fruit or artificial flowers.
    
    
18. Replace heavy curtains with sheer ones that let in more light.
    
    
19. Buy new towels.
    
    
20. Put a seasonal wreath on your door.
    
    

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Upgrading your home is always appealing, but which enhancements really get you a good return for your money when it’s time to sell? The 2003 Cost vs. Value Report by Remodeling magazine and REALTOR® Magazine has the answer.

To see the complete article, visit http://www.realtor.org/rmomag.NSF/pages/costvaluedec03.

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When you sell a 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 (or a second home), but there are some special considerations.


How to Calculate Gain

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

1. Take the purchase price of the home: This is the sale price, not the amount of money you actually contributed at closing.
2. Add adjustments:
   • Cost of the purchase—including transfer fees, attorney fees, inspections, but not points you paid on your mortgage.
   • Cost of sale—including inspections, attorney’s fee, real estate commission, and money you spent to fix up your home just prior to sale.
   • Cost of improvements—including room additions, deck, etc. Note here that improvements do not include repairing or replacing something already there, such as putting on a new roof or buying a new furnace.
3. The total of this is the adjusted cost basis of your home.
4. Subtract this adjusted cost basis from the amount you sell your home for. This is your capital gain.

A Special Real Estate Exemption for Capital Gains

Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a 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 sale.

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

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It’s an objective opinion of value, but it’s not an exact science so appraisals may differ.

For buying and selling purposes, appraisals are usually based on market value—what the property could probably be sold for. Other types of value include insurance value, replacement value, and assessed value for property tax purposes.

Appraised value is not a constant number. Changes in market conditions can dramatically alter appraised value.

Appraised value doesn’t consider special considerations, like the need to sell rapidly.

Lenders usually use either the appraised value or the sale price, whichever is less, to determine the amount of the mortgage they will offer.

Used with permission from Kim Daugherty, Real Estate Checklists and Systems (http://www.realestatechecklists.com).

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