Recoup Value On 3-Year-Old Home

Q: My husband and I are divorced. We currently both still live in the house, but it’s a very amicable situation. Of course we don’t want to do this forever, so we’re planning to sell the house. We have to wait until July because we got that $8,000 tax credit a few years ago and have to have owned the house for three years to avoid having to return some of the tax refund. Do you have any advice for us on the best way to go about selling once it’s time?

A: I’m sorry for your divorce, but I’m glad to hear you’re getting along, especially since you still have to live together for a while. A lot of people bought their homes using the first time home buyer tax credit from a few years ago. Most won’t have to deal with the three-year issue, but some will and they’ll face similar consequences. The bigger issue is selling in a market that isn’t much better than when you bought the house. So first and foremost you’ll need to assess the value of the house.

You also should have a Realtor do a Comparative Market Analysis. Even though the value may change by the time you’re ready to sell, it will give you an idea of whether or not you have enough equity to pay off your mortgage or if you’re going to have to do a short sale. If you find you’re in a short sale situation (where you owe more than you’ll net from the sale of the house) you might change your strategy and pricing.

Regardless of if you have to do a short sale or not, make sure you have the house in as good condition as possible and presented well. Getting an offer quickly is going to be important. You don’t want to list your house in the summer but end up with it still on the market come the slower months of winter.

Since you do have a few months before you sell, you might want to take the opportunity to do whatever work might need to be done to the house to make it as saleable as possible. When your Realtor does the market analysis, they could come to the house and give you some advice on what to do to make as much money as possible when you sell. Even if you don’t have a lot of money to spend, you can work on cleaning, touching up paint, inexpensive landscaping and staging with the furniture you have. All of these things will help the house sell more quickly and possibly for more money.

Talia Freedman is a Realtor with Signature Southwest Properties