Planning when to sell your home is important, and there is a lot to consider. The home must look good to attract buyers, so you probably need to break out the elbow grease or checkbook to get those repairs and improvements handled. You need to be concerned about curb appeal and staging. You also need to speak with your Realtor® about pricing your home so it will sell. Everyone wants to sell their home for the most they can get, and the buyer wants to pay the least he has to pay … not a difficult concept there.
However, there is another important variable that affects the seller because it affects the buyer. It’s called the mortgage rate. You may be biding time to get another few thousand dollars, while mortgage rates are historically low, and buyers can get loans again. That can change.
We have an entire generation that has become totally comfortable with 30 year rates in the 3-5 percent range with practically no down payment. It’s practically free money! This is not normal folks, even though it’s gone on for a long time. Without going into all the causes that converged to create and sustain these low rates, it is safe to assume that one day they will increase, because that’s the way it works. How many of you remember 18% mortgages? Ultimately, the mortgage rate is integral in how much home the buyer can afford. Low rates = more house. High rates = less house. Real high rates = no house. Lenders tend to prefer you can afford to make the payments to satisfy the loan.
I read yesterday that a panel of “experts” in the lending industry took a survey on what will happen to the rates this year. One third said they would go up. One third said they would go down. One third said they would remain the same. One third asked for a different question because no one really knows the answer to that one in a world economy. Do we really have any control over Vladimir Putin taking off his shirt and ruining the value of our currency?
The point is that we don’t control every factor in selling our homes, and in some cases we can’t even forecast where those variables are headed. It’s a definite gamble.
Right now the market is reasonably healthy, but maybe not wonderful. If you want to sell your home the mortgage rates are your friend right now. If you put off until tomorrow because you are waiting for the price to go up more, you might totally miss an opportunity to sell.
I am not a mortgage lender, so I usually defer specific questions to the experts in that field, and we are blessed to have a wide choice in our community. Find one you like and ask him to educate you on mortgage markets and keep you abreast of changes lurking on the horizon. Remember that selling your home for top dollar is important, but buying a new home will likely involve you in getting a mortgage. See how that works? Would you rather pay 3% or 6%? Take advantage of the opportunity you have now!
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