For many homeowners who decide to sell their home, figuring out the perfect timing can be tricky. Naturally, life circumstances will have a major influence on when you need to sell your home. However, developing a well-timed strategy for placing your home on the market can have a huge impact on how soon the home sells.
Before you decide on the right time to sell your home, there are a few factors to consider. First of all, how much do you owe on the home? Do you have it completely paid off? Do you have a large amount of equity? Are you underwater in the mortgage and owe more than the home’s worth? Depending on your current mortgage debt, it may be a good idea to wait before placing your home on the market. Homeowners who are underwater may find it especially beneficial to wait until the market improves or until they’ve paid more toward their mortgage principal before listing the property.
Next, determine the state of your local market. Are homes in your neighborhood increasing in value? Or are there a lot of distressed properties? Is demand for housing strong? Are there already a lot of homes on the market? The answers to these questions will have significant influence over your home selling strategy.
After you’ve gotten a solid idea of the local market’s trends and you understand how much you owe on your existing mortgage, the next step could be to hire a professional home appraiser. This will give you an exact dollar figure to work with when it comes to pricing your home for sale. If the appraised value comes in a lot lower than you expected, perhaps too low to make selling worth it, then you may need to go back to the drawing board for a while and reassess once the market picks up.
If your home’s appraised value came in low, consider whether or not making some improvements might help boost the value. If your home needs a few updates, some repair work, or major TLC, perhaps you could take the next few years to invest in improving the home. Of course, this will depend on your personal finances and whether or not you have the luxury of taking your time with the home sale. Some people need to sell their homes quickly due to job changes or family issues and can’t devote more time and money into their home. In these cases, the homeowners may be forced to take a loss on the sale of their home.
What Makes it a “Good Time to Sell?”
You may be wondering, “what does the ideal home selling climate look like?”
Here’s an idea…
- You owe nothing (or close to nothing) on your home, ensuring that if your home sells, you will most likely make a decent profit.
- You are not “underwater” in your mortgage.
- Home values in your area are on the rise.
- There are fewer homes for sale than there are buyers. (More demand, less supply).
- Most recent sales in your neighborhood have been non-discounted, non-distressed sales; i.e. not foreclosures or short sales.
- Your area is experiencing a “boom” when it comes to commercial, retail or other types of development. (New shopping center being built, plans for new medical facilities in the works, etc.)
- Home prices are rising but remaining affordable, attracting more buyers into the market.
- Mortgage rates are remaining affordable, enticing more buyers to apply for home financing.
If one or more of the above conditions applies to you, then now is definitely a great time to consider selling your home.