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Modern Living Room

What is my Home Worth?

An online "estimate" doesn't take into consideration the condition of the interior of your home.  It's important to work with The Elakatt Group, who can accurately compare your home, to your neighbors, as well as assess what direction your local market is heading, so you can position yourself for success.  Your family's needs and timeline are also factors to consider.

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Image by Alex Block

IS IT BETTER FOR ME TO RENT MY HOME OR SELL?

Historically, owning rental property is a great investment, but it’s not without pitfalls. Determining whether you can cover your mortgage with rent and if the property will appreciate is a challenge that takes research and analysis.


Ask yourself the following questions: What is my home worth in this market?  What is the average rent? Is the value of the house likely to rise or fall in the next several years? If it’s likely to fall, it might be best to sell the property now.


Next, analyze your current situation. How much do you owe on your home? Do you have enough for your down payment without selling it? Will the rent checks cover the mortgage? Do you have the temperament or desire to be a landlord? Can you afford to cover the mortgage if your renter cannot? Tax rules for landlords can be favorable, so what will the tax implications/gains be?


If you need to move on quickly or don’t have the patience to deal with potential issues, selling might be the best option. If you think that the house might appreciate and you can move on without needing the income from the sale to purchase your next home, renting might be the answer for you.  The Elakatt Group can help you analyze your properties potential cashflow and analyze your local market conditions.

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SHOULD I BUY FIRST OR SELL FIRST?

It really depends on your personal situation.

 

Buying first offers the security of knowing where you are going before you sell your current home, but also comes with some risks. If you have very specific needs which could lead to a prolonged home search, like location, size, or age, you might want to considerer finding your new home first. One risk is that it can be harder to get a mortgage for a second home. This can be overcome by using a Home Equity Line of Credit (HELOC) to cover the down payment, but this only works with significant equity in your current home, assuming you have the ability to carry new monthly payments in addition to your current mortgage. Another possibility is that you might feel pressured to take a lower offer on your first home to avoid being burdened with long-term debt that you cannot afford.

 

Selling first offers the most control. If the buyer is agreeable, it might be possible to rent back your home. It’s always possible to move into another short-term rental, although that adds the stress of moving twice and storing your belongings. If you do choose to sell first, you will not need a sale contingency which means you will have more power when negotiating your purchase price.

HOW SHOULD I PRICE MY HOME?

There are three pricing strategies.  You can list your home above market value, at market value or below market value. By listing your home below market value, you will gain massive exposure from the market.  Buyers who have been monitoring the market, will see that your home is a great deal and be quick to pursue it.  Hopefully resulting in a multiple offer situation, which could potentially raise offers above market value, similar to an auction effect.  Also, if your timeline requires a quick sale, this strategy will help accomplish that. ​Listing your home above market value means fewer buyers will see your listing. Additionally, savvy Buyers will recognize that they can get more value by buying your neighbor's house.  This often results in a longer market time, which can be associated with the "taboo" that something must be wrong with the property and that's why it's been on the market so long

Listing your home at market value is the "sweet spot", where you can be confident you aren't "leaving money on the table"and position your self for success.

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SHOULD I TRY TO SELL THE HOME MYSELF OR SHOULD I WORK WITH THE ELAKATT GROUP?

It’s called For Sale By Owner or FSBO (sometimes pronounced fizz-boh). Many homeowners don’t realize all of the details that go into completing the sale of a home.

If you decide to go this route, start by learning the laws in Illinois. There are state-mandated disclosures and rules about who can conduct the actual transaction and what to do if there is a delay in transfer of ownership. If you miss a detail, it could delay the closing and affect your future purchase and final sale price.

After you understand the laws, the next step is to understand the market conditions, so that you can present your home in the best light possible and price your house accordingly. You’ll also need to prepare for showings, assemble disclosure documents, create and distribute marketing materials, put up signs, plan open houses and arrange for visits to your home around buyers’ schedules.

Once you receive offers, you’ll evaluate them and choose whether to accept or reject them or continue to negotiate. You will need a way to validate their pre-approval or verify their proof of funds. It will also be up to you to decide whether to continue to look for a backup offer. You’ll coordinate through your closing agent and be available for all inspections and appraisals. You’ll handle all last-minute negotiations over problems found during inspection and attend closing.

Selling a home yourself is a lot of time and effort.  The Elakatt Group uses their experience, market insights and trusted related service partners to make sure your transaction is as smooth as possible.  We only get paid, if we successfully sell your home.  

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