Everyone asks me “Is it a good time to sell?” And the answer is always the same. Seller’s market or buyer’s market, good economy or bad. It’s a good time to sell if moving is in your or your family’s best interest to sell. Let me explain. Taking all the emotion out, there are only three things you can do with a piece of property. You can live in it. You can sell it. You can rent it. That’s it. Just those three options, in any market. So let’s go through a couple of scenarios.
Sell It?
You and your spouse purchased the home when you were just married. It’s a three bedroom two bath home with a very small yard in a popular neighborhood. When you purchased it, the home was perfect. Very little maintenance, house and yard work only took a couple of hours on the weekend, and it was close to all the local businesses that you loved. Now, five years later, you have two kids and a dog, with all the stuff that comes with them. You really need more space, a bigger yard, and a better school district. You paid $200,000 for the house, and current market conditions say it would sell for $175000. Is it a good time to sell? The answer is yes! I know, you’ll lose some money on the deal. But if the $200,000 home is worth $175000, then the $400,000 that you really want is selling for $350000. So you’ll really be saving $25,000 on the bundled deal if you move now. And, you’ll have all the extra room you need, a yard for the dog, and when Junior starts school next year, it’ll be in the school system of your choice. What is all of that worth to you?
Rent It?
You purchased the home as a single parent in your forties. You and your child lived there for 10 years, but they’ve moved on to college and you really don’t need the space anymore. The mortgage payments and college tuition make it hard to save for your rapidly approaching retirement. You paid $200,000 for it, and have a $50,000 balance on the mortgage. Your mortgage payments are $1100/month. Last time you checked, the house would sell for $175,000 and the rents in the neighborhood are $1800/month. Is it a good time to sell? Maybe, maybe not. Renting it would give you a $700 positive cash flow you could use to fund that retirement. And in a couple of years when you’ve paid off the rest of that mortgage, it would be all cash flow, even if you never raised the rent, which of course, you would. Maybe being a landlord is not such a bad idea! But if you really don’t want to do that, it’s a great time to sell! You have a lot of equity in the house and can put a significant downpayment on a smaller place. Your mortgage payment will go down and you can start saving for the future.
Live in it?
You have a home that you like but don’t love. It’s not your forever home, but it works for now. Is now the best time to sell and move up into your next investment? That’s a harder question to answer. Sometimes staying in your home is the best long term strategy. If you don’t have a lot of equity or a lot of cash saved up, it might be best to stay put, work on those things, and wait for property values to rise some.
Every situation is different, and you need to do your research to see if it is the right time for you and your family to move to a new home. Let me help you do the research and determine the best option for you. Together, we can answer the question “Is it a good time to sell?” You can reach me by email at shellyhendry@kw.com, or by phone at 404-392-7726.
