Deciding when it's time to sell your home
Homeowners often struggle with the decision of whether or not they should put their residence up for sale. A number of situations can make them feel like now is the time to list the property, but they can also feel sentimental about the home and be reluctant to move.
You'll have to assess your own personal situation as well as your motivations for considering a sale. It's also important to assess the market and see if a sale will be in your best financial interests.
It is often a good time to consider a sale if you are uncomfortable in your current home. The real estate site Trulia says your home may not be large enough for your current needs. Perhaps an additional child is on the way and you don't have enough bedrooms, or you're planning to move an elderly parent in with you and need some additional space.
Alternatively, you may have outgrown the home. Once your children grow up and move out, you might realize that your residence has much more space than you really need. At that point, it makes sense to downsize to a smaller home which is easier to maintain.
Aging homeowners may want to consider moving if they have medical issues which are making their current residence inconvenient. If you are having trouble climbing the stairs to a second floor bedroom, it can be helpful to relocate to another home with single floor living.
You may want to find a different neighborhood than the one you are currently in. Angela Colley, writing for the National Association of Realtors, says homeowners might want to find a property that offers a shorter commute to their workplace, or one that gets them away from obnoxious neighbors.
Selling after you've completed some small home improvement projects can work in your favor. Margarette Burnette, writing for the financial site NerdWallet, says some upgrades will have a high return on investment and allow you to post a higher asking price.
You can also be in good shape for a sale if you've recently completed a major functional renovation, such as upgrading a roof or installing new insulation. These features can add extra appeal to buyers, and can also command a higher asking price. You'll want to make sure you haven't incurred too much debt from such a project, however, since this can easily cut into the amount of money you'll receive from a sale.
Homeowners might be interested in selling simply because they think the market is favorable. This is usually a more convenient way to sell, since you won't be under pressure to leave the home by a certain date. It can also allow you to dedicate more time to negotiating a price with a buyer or waiting for the best possible offer.
Check your market conditions to see if they are favorable to sellers. Lisa Kaplan Gordon, also writing for the National Association of Realtors, says many areas have a limited number of homes available for sale. This condition benefits sellers, since you'll have less competition and may receive more offers from buyers.
Sellers can realize a better benefit if home prices have been improving in their neighborhood and if a healthy economy or other factors are attracting buyers to the region. The current low interest rates for mortgages have also helped motivate buyers to purchase a home instead of renting one.
Even if the market is not as advantageous as you'd like, you can still benefit from a sale. Trulia says that even if you're netting a significant profit by selling your home at a high price, the market conditions also mean you'll likely have to buy your next home at a higher price. Similarly, you'll likely be able to find more affordable properties available if you have to sell at a lower than expected price.
Take a look at your home's equity. The steep drop in home prices during the Great Recession left many homeowners owing more on the property than it was worth. However, a recovery in home values and regular mortgage payments have helped erase this negative equity in a large share of residences, allowing their owners to realize a profit during a sale.
Determine how much money you have left to pay on your mortgage, and look at comparable properties to get a sense of your home's value. If you are still underwater on your loan and in no rush to move, it makes more sense to stay put. Burnette says this will allow you to regain equity by paying down the mortgage balance and allowing the home's value to appreciate.
Selling doesn't happen without expense, so you'll want to make sure you have some money on hand before you list your home. Buyers often ask the seller to cover some of the closing expenses, and you'll also have to budget for the cost of moving to your new home. Colley says you'll likely need to invest in some landscaping, staging, or other minor upgrades to help improve the home's appeal.
If you are reticent about selling, you might want to consider renovating your current home instead. You may be able to find a way to adjust the home's layout to give you a larger kitchen, situate a bedroom on the first floor, or otherwise meet your needs. If you need more room, you may be able to finance the construction of a home addition or an additional story.
You'll need to be prepared for this kind of extensive remodeling if you choose this route. Jeffrey Steele, writing for the financial site Bankrate, says it is essential to create a realistic budget for the project and be prepared for work that might continue for several weeks or even months. You also shouldn't expect that the renovation will recoup all of its costs through an increase in the home's value; the bump up in value rarely matches the expense of completing this work.
Be careful not to improve the home too much. A luxurious kitchen, beautiful master bedroom suite, and other improvements can all boost your enjoyment of the property. However, they can also make it harder to sell your home if the features are unusual for the neighborhood.
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