Thinking about selling your home, is an interesting article that potential sellers prepare for the market. For more specific information about thinking about selling your home, continue reading below.
Often I talk to people who are asking if I think now is a good time to sell their home. That is a good question with which I respond with the following questions:
- What’s the reason for wanting to sell? Size, neighborhood, changing jobs-need better location?
- Do you know what your home is worth and how much equity (if any) you have currently?
- Are you ready for the work needed to get your home ready for house hunters?
- Are you committed to keeping it ready to show for weeks or months?
- Are you prepared to hear the reasons why potential buyers believe your home is not perfect?
- Are you ready for honest—and sometimes hardball—negotiations over what buyers are willing to pay for your home?
- Are you really ready to move out and leave the place where your family has made memories?
These are all important questions to answer since selling at the wrong time can cause issues for years to come.
Effects of Equity
Today, homeowners being financially ready to sell come down to one factor: equity. After the housing crisis of 2008–09, millions of homeowners found themselves with negative equity, which meant they owed more on their homes than they were worth.
Selling your home when you have negative equity is a bad idea. That’s called a short sale, and it impacts your credit almost as much as a foreclosure. Breaking even on your home sale is better, but it’s still not ideal. If you’re in either situation, don’t sell unless you have to in order to avoid bankruptcy or foreclosure.
For the last couple we’ve watched home values increase by roughly 12-13%, and that means homeowners are building equity. Their homes are likely worth more than they owe on them, and that trend will persist as they pay down their mortgages and home values continue to increase.
The best idea is to sell your home when you have enough equity to at least cover the down payment on your next home. That way you automatically start out with equity in your new home purchase.
How Much Is My Home Worth?
Unsure of what your home is worth today? Consult a real estate professional who will compare your home to others that have recently sold in your area and take local market trends into account. Their estimate will be trustworthy and be based on their experience from selling homes in your area.
Are You Ready to Make the Move?
Once you have all the questions answered above and the numbers show you are in good shape financially, great! But don't forget, get pre-approved for a new mortgage prior to listing your home. If your home sells quickly, and the buyers want/need a quick closing, be prepared to shop and find a replacement home quickly. Contact me today for a free consultation and pre-qualification. I will also give you a referral to a real estate professional who can guide you with years of experience and knowledge in home buying.