Thursday, May 16, 2013

Selling the American Dream

So you’ve decided to put your home on the market.  Maybe you are relocating, or the size of the space no longer suits your needs, or you just feel like it’s time for a change—whatever the reason, many homeowners eventually decide to sell. And as simple and exciting as that decision may seem, there are some potentially expensive pitfalls associated with home sales which people often don’t consider until they are well along in the process.
            Most homeowners have an opinion of what their home should sell for, and they get their hearts set on that number, and begin to mentally start spending their projected profit before they even get an offer. But what happens if their perception of the property’s worth doesn’t jibe with how an appraiser views it, or what the market will bear in terms of a price? And what happens if there are problems that need to be repaired before title is transferred, or additional legal fees due to a ‘cloud’ (problem with) on the title?
One very common and pricey area of concern lies within the septic system regulations of your state or commonwealth. If you are fortunate enough to have a property on an existing town sewer line, great, but if you happen to live in a house with a private sewer system, you may wish to familiarize yourself with the Massachusetts’ Title Five law before you decide on a sale price.  Title five mandates that all properties with private sewer systems pass a “percolation” test to determine the viability of the system and whether it conforms to what have become increasingly stringent state standards. If it passes, the owner can sell the property with the existing system untouched. If it doesn’t, the system must either be repaired or replaced, which can, in some cases, cost upwards of $20,000. That can really eat into the profit a seller might hope to generate.
            Add to that other potential repairs, the inevitable negotiation and renegotiation process and myriad other complications which can prevent the seller or buyer from obtaining clear title to the property, and you have a plethora of issues to consider—ones that may be initially overlooked by a real estate agent or attorney, which most people believe is all you really need to facilitate a property sale. So as much as it may be worthwhile to have these professionals involved, a little research ahead of time on your part can eliminate unpleasant surprises, or uncover strengths previously not considered, and can really pay off in the long run.
            I always recommend that no financial decisions should be made lightly, especially one involving what is, for many people, the single greatest investment in their lives. So before you sit down at the closing table, maybe even before you decide to list your property, and while you’re in the early stages of planning your sale, consider seeking the advice of a financial professional.  Plan ahead to allocate your proceeds prudently, rather than working at whatever is left over.  Adding a financial professional to your team can ensure that you get the most bang for your buck from your little slice of the American Dream.

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