Selling Your Home: Factors to Consider
Selling Your Home in Today’s Market
“Am I ready to sell my home?” There is so much history within the four walls of your home, not to mention, all your possessions! The market right now favors sellers with not enough inventory for the number of buyers out there. Interest rates are low, so people are ready to buy! Here are some helpful hints to see if now is the right time to sell:
You have equity! For most homeowners, being ready to sell your home comes down to one factor, how much do you owe and will you make a profit? Selling your home with negative equity is called a short sale. It is not ideal. Unless you are close to foreclosure or bankruptcy, a short sale is not your best option.
Figuring out how much equity you have should be an easy computation. Take the principal balance from your latest mortgage statement, then look up your home’s full market value on your latest tax bill and once you have those two figures, subtract the mortgage balance from the value of your home and that’s your equity. The amount you net from your sale is critical for a new home purchase, because having a 20% down payment is ideal to avoid PMI (Private mortgage insurance), which could save you hundreds if not thousands of dollars over the life of your loan.You’re out of debt with cash in the bank! When you take a hard look at your finances, if you’ve paid your non-mortgage debt off and have three to six months of expenses in your emergency fund, that’s a good sign you have security to purchase again.
Maybe a larger house fits your needs or maybe a smaller home would. Maybe your kids have all left the home and you want to downsize. Maybe you found out you’re having twins and that extra bedroom is so important now. These are all great questions on whether selling is the right move for you.
You can cash flow the move – clear out your clutter – it can make your home seem larger when everything is neat and tidy. You also have money to pay for the move, hiring movers, packing up and hauling some stuff away while you’re in the process.
You’re Emotionally Ready to Make the Change – everything can make sense financially but if you can’t emotionally part with your home, maybe it’s not the right time. If you can see yourself in a bigger or smaller house, it is time to make the sale! Also, you have to be ready to deal with what potential buyers may say about your home and also with having showings and people making offers that are not what you are expecting.
Understanding the market is important! Right now, as we said earlier, today’s market is looking for properties for all the buyers out there. The law of supply and demand works in the real estate market and your home may be worth more to someone who is committed to finding a new home and you could find yourself with a bidding war on your home. Multiple offers can be looked at in many different ways. Some people may give you asking price but contingent on their home sale. Some people may be first time homebuyers and FHA can act a little slower with more stringent mortgage inspection contingencies. Also, some offers may be cash and or not contingent on a sale. Those are the best offers when in the ballpark of what you are asking.
Last but not least, maybe all the signs are there to sell. Do you use an agent? Of course you can also do For Sale By Owner – the work is done by you to get your house out there on the internet. With a realtor, of course, you pay a fee, but they also push your house and market to individuals who are looking for their dream home and your house may fit their profile! Agents will also negotiate the sale for you and help with paperwork.
At any point when you decide to sell your home, remember to get an experienced real estate attorney and make sure once you have that contract in place, you have it reviewed. Attorneys and their paralegals walk you through the process from contract to close and make sure all the contingencies are met. If you have further questions about selling your home, we are here to answer your questions and help you through the home selling and buying process. Happy house-hunting!
