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Opinion: Thinking of selling your home? Here are 5 steps to take

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The U.S. housing market is facing unusual times. Mortgage rates are at their highest levels in years, precluding some buyers from entering the market. At the same time, the nationwide supply of houses remains tight. If you’re contemplating a move in the midst of these unusual market dynamics, here are five steps that can help you navigate the process.

  1. Seek professional help. A top priority is to have a good handle on your current financial situation. This means having a clear idea of the value of your home and how selling it would fit into your financial plan. To help gain a holistic perspective, sit down with a financial adviser to discuss your financial situation and concerns for participating in today’s market. Additionally, you may want to consult a real estate professional. Finding an agent through a referral from somebody you trust is a good way to identify a qualified agent. Don’t be afraid to interview multiple agents to find the right fit.
  2. Determine your home’s worth. Local market conditions, based on the balance between housing supply and buyer demand, have the biggest impact on home values. Explore pricing on real estate websites, consider obtaining a formal appraisal or discuss the matter with your real estate agent to help determine your home’s realistic value. Consider whether you can expect to sell the home for more than you owe on an existing mortgage if there is one.
  3. Estimate the cost of selling. The sale price of the home does not reflect your ultimate net proceeds. There are costs associated with the process. These include the real estate agent’s fees, typically amounting to 5%-6% of the sale price. Closing costs, which typically include a home inspection, appraisal fees and title insurance will eat up another 1% to 3%. If you need to make repairs to the home at some point in the process, that’s an additional cost. Finally, you may need to negotiate the price or provide other concessions to the buyer to close the deal. Keeping these costs in mind will help you attain a clear picture of the proceeds you can expect from selling your home.
  4. Determine the tax implications. Capital gains taxes may apply on your home sale. This is often not an issue if the house you sell was your primary residence for two of the past five years and your net gain was $250,000 or less (single person) or $500,000 or less (married couple filing a joint return). Other tax considerations come into play if you sell for a loss, did not use the home as a primary residence or the home is a rental property. Check with your tax adviser.
  5. Be patient. While sellers still have an edge over buyers in many markets across the U.S., the overall process of selling your home still requires patience.

Persistence is necessary to find the right buyer and to be in a position to accept an offer that is comfortable for you.

Your home may represent a significant part of your net worth. It’s important to consider how any planned sale impacts your overall financial plan. A financial adviser can help you understand how selling your home affects your long-term goals and financial aspirations.

Paula Dougherty is a certified financial planner and private wealth adviser with Achieve Private Wealth, Ameriprise Financial Services LLC in Springfield. She can be reached at


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