Deciding to sell your home is a significant decision requiring time, energy, and considerable financial preparation. When one decides to put their home on the market, there are many considerations and sometimes tough decisions to make but remember there are certain ways to make the selling process a bit more smooth. Here are a few moving management tips and common mistakes to avoid when listing and selling a home.

1. Incorrectly pricing your home

Arguably the most important part of the sales process when selling your home is determining a price point. The price you set for your home can depend on a variety of different factors such as timing, location, neighborhood comps, and interest rates. Pricing your home too high is risky, even if you are selling in a favorable market. For example, pricing much higher than the true market value could lead to problems during the appraisal process or could send a red flag to buyers if it sits on the market too long. Conversely, you may consider pricing lower than market value to draw attention to your home or to start a bidding war. While this can work in some cases, remember that this strategy could end up backfiring if not done properly, so always do your research ahead of time to yield the best outcome.

2. Not having the correct paperwork in order

There is a significant amount of preparation involved when selling, so getting organized and preparing all necessary paperwork ahead of time can lead to a more smooth process when it comes time to sell. Here’s some paperwork to have prepared ahead of time:

Loan information
The deed
Your original sales contract
The title report
Your homeowners’ insurance policy
Maintenance and repair records
Property tax information
Utility bills

Additionally, it could be helpful to have a copy of the survey, especially if you have a large piece of property or if you have fencing or obscure boundaries on your land. Also, if you are including appliances in the sale of your home, try to look for any warranties or user manuals to serve as a resource for potential buyers.

3. Being inadequately insured

When you are preparing to sell your home, don’t overlook the importance of carrying adequate insurance policies. Even though evaluating your current coverage might seem like a daunting task when you inevitably have a significant amount of other items on your to-do list, it is nonetheless an important piece in guaranteeing that you are adequately protected. For example, if you have made significant improvements to your home leading up to putting it on the market, look back into your homeowners’ coverage to ensure the policy is sufficient. For instance, if you installed a new gourmet kitchen to attract buyers but only have builder’s grade coverage in your current policy, consider updating this amount to reflect your home’s improved value while you are still an owner.

Whether you are downsizing or upgrading your home after you sell, it can be helpful to re-evaluate your financial situation to determine if your needs are going to be changing. For example, some may consider updating their life insurance coverage if selling their home will significantly change their new obligations. This is why it can be helpful to use a cost calculator to have a better understanding of how costs could change should you consider obtaining a new policy when entering this new chapter. Term life insurance tends to be a more affordable option and provides your chosen beneficiary with a lump sum of funds if you were to unexpectedly pass away. If you are moving to a home with a higher monthly mortgage payment, this could be an added consideration.

4. Not budgeting for moving management costs

While you most likely have a grasp on the price point you are looking for in a new home and have a general idea of what you are hoping to sell your current home for, remember not to overlook some of the additional costs associated with moving. In addition to the standard costs of selling a home such as lawyer fees and realtor commissions, there are also additional fees to account for when selling your home. These could include the cost of using a reputable organizing company, cleaning fees, scheduling movers, and repairs that need to be made after the inspection.

5. Not showcasing your home’s features

When you’re ready to put your home on the market, take some extra time to ensure that you are highlighting and displaying your home’s features. For example, making sure that you have quality pictures taken of your home can make a difference when attracting potential buyers. Depending on your situation, staging your home or virtually staging your home could also be a wise investment if you already have moved out all of your furniture. Having a staged home helps potential buyers take mental ownership during their showing because seeing furniture helps them picture what their life could be like living in your home. Additionally, consider making certain upgrades to your home such as painting the walls a neutral color or enhancing the curb appeal to appeal to a wide audience of buyers.

6. Not having a moving management backup plan

When selling your home, having a backup plan is key to save you from any potential headaches during the process. In particular, buying and selling a home at the same time can be a challenge, so having a solid plan is critical. Here are a few questions to ask yourself:

If you sell sooner than expected, where will you stay while you look for a new home for yourself?
Is it possible to have a contingency in your potential deal to allow for time for you to find a new home?
Are there short-term housing opportunities in your area and will you need a storage solution if you are in between housing?

These are all things to think about when selling your home but also looking for a new residence as well.

When selling your home, it can be helpful to prepare for the unexpected. Each situation is different, so being both mentally and financially equipped to handle any surprise situations that may come up can help you during this time.

By: Regina Lark, Sheri Samotin, Noelle Valentino

When downsizing, there are many precious items that need to be organized with great care

There are many challenges to dismantling an estate – from recovering important documents and hopefully avoiding probate, to deciding what to do with elegant (but worthless) tchotchkes and table linens. The size and scope of some projects can be daunting, even for the most dedicated of adult children, who likely have too much stuff in their own homes to tackle the clear-out of their parents’ household. There are so many moving parts, and often requires a team of experienced, dedicated professionals who work together to settle the estate and get the home ready for sale. An estate attorney, a realtor, and a good handyperson ought to be part of the team.

Dealing with the contents of the property is a different matter. Three professionals: a private fiduciary, an appraiser/valuator of tangible personal property, and a company that specializes in de-cluttering and downsizing, walk us a through their process to dismantle an estate, and the considerations that must be made when helping a family going through this process.

How to Get Started: Build Your Team

Sheri Samotin, Private Professional Fiduciary, LifeBridge Solutions

One of the most frequent comments I hear in my first conversation with a prospective client is, “I’m overwhelmed.” If the prospect is the family member in decluttering and organizing means that everything will be put into a proper place and can be easily found. charge of administering a trust or estate, they have many unfamiliar tasks to handle. Sometimes, I am my own Documents need to be organized professionally uasing a checklist to insure all are in place “client” if I am serving as a designated trustee or administrator. I must make the magic happen regarding clearing and distributing the personal property in accordance with the trust and/or will.

After I have reviewed the relevant documents, it’s time to lay out my strategy. Typically, the first step is to go through the home to locate any valuable items that could “grow feet” and disappear. Those items need to be secured. In addition, we search every nook and cranny for any papers that might be needed to support prior tax returns or to help us file a return. In one recent case, we

thought the decedent was a single man. In fact, when going through his papers, we learned that he had been briefly married as a young man and that the marriage was annulled. Sometimes we are looking for information related to the “family tree” to make sure everyone who is legally entitled to notice receives it. At the same time we are going through the paper, we make “shred” bags for documents that don’t need to be saved but require proper disposal.

Once the paper monster has been tamed, it is time to get an idea of the value of the personal property.

Valuing Tangible Personal Property, Appraisal and Disposition at Auction

Noelle Valentino, Fine and decorative arts specialist; household contents appraiser, John Moran Auctioneers & Appraisals

More often than not, the bulk of the value of an estate’s tangible personal property can be found in just a handful of items. It is important to engage a specialist early in the process to identify the items of significance before they are claimed by relatives, given away, donated, or worse. A qualified tangible appraiser will produce an inventory of household contents, or a formal appraisal report, depending on the needs of the estate. The intended use of the document must be disclosed in the report: equitable distribution, charitable donation, estate tax filing, or something else.

A Clear Path can coordinate the valuation and selling of collections as part of their organizing service For IRS purposes, estates approaching the exemption limit will require a household contents appraisal. The IRS defines art broadly: jewelry, paintings, silver, rugs, decorative objects and more. Outside of tax regulation, there are often issues that arise due to family reasons and an estate appraisal may be recommended to avoid later conflict. For the purposes of distribution among beneficiaries, it is helpful to discuss a minimum value threshold with the appraiser. A fair market value of several hundred dollars is often a good starting point for an object’s inclusion in the report.

Appraisals are considered legal documents and can be relied upon by an attorney, the court, or the IRS. Selecting a personal property appraiser who is USPAP compliant, with membership in one of the three preeminent appraisal organizations, is imperative. Qualified appraisers in your area can be located on the websites of the Appraisers Association of America, International Society of Appraisers, or American Society of Appraisers.

When considering the eventual disposition of assets from an estate, an auction house can also be helpful in identifying the items of greatest value in the home. With the intent to secure new consignments, they will provide free auction estimates. With that said, auction houses are likely to include only the items valued over $1,000 and appealing for bidders in today’s market. Note well that an auction estimate does not take the place of an appraisal. It is however, an advisable sale venue for estate property due to its the broad reach and rapid mode of sale, together ensuring fair market value has been achieved.

When the ‘good stuff’ is gone… Now what?

Regina F. Lark, Ph.D., downsizing and organizational specialist, A Clear Path, LLC

The typical household contains thousands of pieces of tangible personal property. Every room has stuff – some rooms have more stuff than other rooms. Drawers and cupboard and closets are filled with flatware, dishes and clothes. Even if considerable downsizing had already happened, there’s no getting around this fact: we all have to deal with our clients’ stuff.

To get the job done in an efficient and timely way, look for a professional organizing/downsizing company with access to a broad range of resources to complete the dismantling of an estate. Find out what they know, and who they know, when you ask these questions:

What does your business liability cover?
Do you have a project management fee?
Are you able to ship items across, or out of, the country?
Have you encountered a hoarding situation? If so, how do you handle the massive volume of ‘stuff?’
Do you have the ability to sell what the auction house doesn’t want?

After the auction house reviews and removes what I call the “big ticket” items, the remainder of the household contents can be photographed (to attach to donation receipt), packed-up, and hauled to the nearest non-profit. If removal is all that’s required, a good downsizing company can have the estate cleared and ready for the realtor to put on the market.

Another option is working with a traditional estate sale company. They usually spend two weeks tagging everything in the house, around the yard, and in every kitchen drawer. Many estate sale companies charge a percentage of the sale’s gross profits. For example, if the company charges 40% of gross profits and the sale yields $10,000 then you will owe the company $4,000. Be sure to ask about any additional services such as trash removal, post-sale clean-up, etc. If the estate is thick with clutter, does the estate sale company address that, too?

Over the past couples of years, online estate sale auctions have become wildly popular, and MaxSold, a Canadian company with a robust platform, has generated a large footprint in the United States. The concept is simple – an organizing team catalogs every item in the house into what are known as “lots,” distinct groupings of one or more items sold at auction– creating lots of lots! The sale is live online for 7-10 days and every lot begins at $1 (yes, one dollar). The bidding is particularly fast and furious on the final day of bidding. The ultimate split is 70% to the estate and 30% to Max Sold. If a fiduciary hires a team of professionals to dismantle an estate, it will likely come close, break-even, or make money on the sale of the remaining tangible personal property, and quite often, offset the cost of their service.

Conclusion:

Due diligence regarding the estate’s personal property is an important aspect of fiduciary duties. Sentiments tend to run high when it comes to the “stuff.” Suspend bias and remain objective with assets you are unfamiliar with, calling in experts where appropriate. Moreover, encouraging your clients to update their estate plans ahead of time, including a review of existing appraisals with personal property assets, as this can prevent later confusion. Proactive steps in identifying items of value and having a working plan for the disposition of tangible personal property can mitigate the risks and avoid family conflict, or a professional headache.

Category Archives: Estate Clearance

Moving Management: 6 Common Selling Mistakes