Time to sell your home

It's time for a fresh start.

The real estate market is hot, and you know for a fact that the guy down the block just sold his shack for $200,000 after paying just $110,000 for it a few years ago.

So now you feel the time is ripe for you to trade up, too.

But before you plunge a "For Sale" sign into the front lawn, you'll need to seriously consider whether moving is the right step.

"If you just got the itch to sell, be sure you know what your motivation is," says Bill Echols, spokesman for Re/max International in Denver. Sellers who don't do enough research may end up with "seller's remorse," he says.

"The temptation is just to want a nicer house," says Eric Tyson, co-author of "Home Selling for Dummies."

That can be expensive - financially and emotionally.

To keep that pot of gold at the end of the real-estate rainbow from getting tarnished, you might want to take the following steps:

*Assess your local real-estate market to set a price for your home.

*Figure out the costs of selling your home.

*Estimate the costs of buying and moving into another home.

*And remember to factor in intangible costs, such as moving to an unfamiliar neighborhood with new schools and a new commute.

If you need to sell, now is the time, says Daryl "Jess" Jasperson, president of Re/max International in Denver. "Markets peak in spring and early summer," he says.

Mortgage interest rates are at some of their lowest levels in 20 years, a record number of buyers are flocking to the market, and home prices across the country are rising.

Yet even in a booming market, you have to be realistic about how much you can get for your house.

"Most sellers have an idea what they want to get," says Lou Hrono, a Re/max agent in Medford, Mass. The problem is many sellers want to get more than their house is actually worth.

The best way to reap top dollar is to price your house low enough that it starts a bidding war -or at least threatens to, experts agree.

When Ron and Sue Wilson sold their condominium in the West County area of St. Louis, they set a realistic price, hoping to get out of it what they owed. Before the condo was even on the market, a man came and looked at it. Within a week, their Realtor brought another couple by who was interested. That prompted the first buyer to make an offer $1,000 above their asking price to make sure he got the house.

"It's a game; it's strategy," says Mrs. Wilson.

The best way to price your house is to get a list of comparable sales in your neighborhood, Mr. Hrono says. Any Realtor should be able to provide an accurate, current list of comps. The list should give you a good idea of current market conditions.

The key question "is how long have the comps been on the market at those prices," Hrono says.

The longer a house has lingered, the less realistic its price. Price your house to compete with those that have sold within 30 days, the experts say.

"When something new comes on the market, buyers rush to see it," Hrono says. If it's overpriced, they reject it. And they don't come back." All the activity is going to come in the first two to three weeks," he says.

It's also important for sellers to keep watching the market, says Mr. Tyson. Check out the real estate classifieds and even tour new homes that come on the market. You don't want to be undersold.

The costs

Once you have a price, it's time to factor all the costs involved in a move. Six percent of what you sell your home for pays the Realtor's commission. And "usually when you sell a home, you have some deferred maintenance you're going to get stuck with," Tyson says. That can cost another 1 to 2 percent of the sale price.

Closing costs on a mortgage to buy your new house run 3 to 5 percent. And actually moving your stuff runs another 2 percent to 3 percent.

All told, selling your house, buying a new one, and moving can eat up as much as 15 percent of a $200,000 transaction, Tyson says. That's $30,000 you won't be able to put toward a downpayment on your new home. Yikes!

The Intangibles

And if you don't move for the right reasons, you may not be any happier. First off, don't assume anything about a new neighborhood just because of its reputation or because a of what a Realtor says, Hrono says. Perhaps a bigger mistake is making false assumptions about your old house and your old neighborhood, he says. Are the schools really that bad? Or are they beginning a turnaround?

And before you sell, consider the expansion potential of your own house, says Tyson. If the problems are cosmetic or a matter of size, it probably makes more sense to remodel or add on. If you're retiring and need cash, a reverse mortgage may work as well.

*E-mail evarts@csmonitor.com