Thinking of Selling Your Home? 8 Ways to Know You're Ready
So many factors go into deciding if you’re ready to sell your home. Will local market trends make the sale worthwhile? Are you ready to part with your home and all the memories you’ve made there? To help you determine if it’s time to sell, take a look through these eight ways to know you’re ready.
Should I sell my house?
If you have equity in your current home, are located in a seller’s market, have enough cash to cover moving expenses, and are prepared to let go of the sentimental attachment to your home, you’re likely ready to sell.
When is a good time to sell my house?
According to recent research from Zillow’s Real Estate Market Report, home values across the U.S. have risen 7.6 percent since February 2017, so many homeowners are enjoying increased equity. And, going into the peak home shopping season, the number of homes for sale is 10 percent lower than a year ago, making the spring and summer of 2018 a seller’s market in many parts of the country.
What is a seller’s market?
A seller’s market is a market condition where there are more people looking to buy than there are homes listed for sale. With more buyers competing for fewer homes, seller’s markets represent a great time to sell.
Thinking of selling your home? Ask yourself these questions
1. Do you have equity in your home?
Equity is the difference between the market value of your home (how much you could sell it for), and your mortgage balance (how much you owe on it). Thanks to the rising home values of the past few years, the majority of homeowners have some positive equity in their homes. However, if you bought at a high price and the market where you live has gone down, you could have negative equity, meaning your house is worth less than you owe.
2. How do I determine my home equity?
Let’s say you believe your home could sell for $250,000. If you owe $200,000 on your mortgage, then you have $50,000 in equity in your home. Equity allows you to successfully pay off your existing mortgage and apply what’s left over toward a new down payment and moving expenses. If you have enough equity, you may be in a good place to sell.
3. Do you have a down payment saved to purchase a new house?
The standard down payment is 20 percent, but there are loan options available that require as little as 3 percent down. According to the Housing Trends Report, 52 percent of repeat buyers put 20 percent or more down. To be competitive in hot seller’s markets, you’ll likely need to make your offer more competitive by putting more than 20 percent down or having additional cash on hand to cover a low appraisal. If you have savings accessible to apply toward a new down payment, you’re in a great position to start shopping for a new home before selling your current home. If not, you’ll have to sell your first home before being able to put money down on a new home.
4. Can you afford the cost of moving?
One often-overlooked expense related to selling your home is the cost of moving. Whether you’ll be moving across town or across the country, you’ll have to keep enough cash on hand to cover things like temporary storage, truck rentals, moving services, and packing supplies. If you have cash to cover moving expenses (that isn’t needed for your down payment), it’s another sign that you’re prepared to sell.
5. Do you have cash for home improvements?
To get as much money out of the sale as possible, many sellers complete a few home improvement projects before listing, choosing the improvements that will offer the best return on their investment. Cosmetic home improvements can boost your home’s sale price.
Home improvements can range from a few hundred dollars for a quick interior paint job to many thousands of dollars for serious upgrades, depending on the condition of your home. If it’s going to take any significant amount of money to get your home sale-ready, make sure to factor that expense into your decision making process.
6. Can you accept negative feedback from buyers about your home?
Part of the home sale process is tailoring your home to what buyers are looking for. Sellers usually end up hearing feedback about what potential buyers think of their home, and it’s not always positive. The decor choices you love might not be to someone else’s taste, or the one thing you might love about your home may be the first thing they’d want to change. Buyer feedback can be hard to hear, but you’ll need to be emotionally ready to hear the opinions objectively in order to make a sale happen.
If you can keep yourself from taking critical feedback on the condition and style of your home personally, you’re emotionally ready to make a sale happen.
7. Have you outgrown your home or are you ready to downsize?
In different stages of life, people have different housing needs. Marriages, divorces, new babies, grown children leaving the nest, retirement, and old age can all make homeowners feel that it might be time to sell. Whether you’re in need of more space or have more space than you care to maintain anymore, major life circumstances are good indicators of an appropriate time to sell.
8. Are homes in your neighborhood selling fast?
In a seller’s market, inventory is low and homes sell quickly, often with multiple offers. In a buyer’s market, listings can sit for a while before the right buyer comes along. Pay attention to the news in your local market, do your own research, or ask a local agent. You may just want to take advantage of a seller’s market.
Source: Zillow.com
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