Last Updated: August 19, 2022
Owning your own home is an important part of your financial well-being. But, what if you need a bigger home or want to move on to something better? You might ask yourself, should I sell my house?
There are many things to consider before you decide. How much is your house worth and will you incur costs in the process? We aim to answer all your questions in this regard. Read on!
Is It a Good Time to Sell a House?
The first thing to consider if you’re thinking of selling your home is whether the time is right. Take the following into account:
Your Life Circumstances
It may not be the right time to sell a home if your life circumstances are likely to change in the near future. Think about job opportunities you want to pursue, welcoming a new addition to the family, or being within arm’s reach of attaining your life’s goals. Ask yourself, if I sell my house now, will it derail my plans?
Your Financial Situation
The next thing to think of before deciding when to sell your house is your financial stability.
The cost of selling a home can be high. Factor in the cost of moving to a new location and other inherent fees and levies.
At this point, it is important to calculate your home equity and add up all existing debt to ascertain whether you can afford to sell your home at this time.
Current Housing Market Conditions and Trends
Analyzing the housing market before deciding when to sell your home is vitally important. The market is highly liquid and can adversely affect the sale of your property. Keep in mind school term dates (summer holidays), seasonal weather variations, and the location of the home you wish to sell. For example, homes in Florida sell all year round, while colder regions may not enjoy the same trend.
Additionally, gauge whether the market is hot or cold.
A hot market is characterized by high demand from sellers in addition to a low inventory of properties available. It is a seller’s market with high house prices and speedy sales. Contingency fees may be waived while bidding wars become heated and intense.
Should I sell my house now? Yes. If the market is hot, this is the time to do it. Real estate statistics show that selling when the market is hot can even result in a bigger net profit.
Cold housing market trends favor home buyers. This type of market is characterized by a tight inventory and an ever-decreasing demand for property. Sellers are forced to make concessions or lower pre-determined asking prices. This is not the time to make an optimal sale.
Determine the Market Segment Value of Your Property
All homes are not created equal. The real estate market may be hot for entry-level homes and lukewarm for posh, luxury estates at present. Where does your property fit in? Read the signs to decide when to sell your house.
|DID YOU KNOW: The real estate market is hot right now. House prices are predicted to increase by an average of 5.7% in 2021. Unfortunately, though, mortgage interest rates are expected to show an upward trend as well toward the latter part of the year.|
What Do I Need to Know When Selling a House?
Before taking the steps to sell a house, you need to determine its worth and the state of your home equity. However, this can be quite confusing. So, how do I sell my house?
The Worth of Your House
You can use two methods to find out what a house’s value is. Homeowners can make an estimation by comparing their residence with other comparable homes or use a home value tool to do it.
Your Home vs Comparable Sales (Comps)
Mentally set your home side by side with other homes in your area. Consider how many bathrooms and bedrooms they have. Include square footage as well as any unique features such as garages, pools, or decks. Research the sales cost of recently sold homes in the neighborhood and other areas like it.
Using this information can help you determine a reasonable price range if you are thinking of selling your home.
Use a Home Value Tool
To help prospective buyers and sellers calculate what their house is worth, there is a wide variety of home value tools available on the internet. One example is SmartZip, which uses the neighborhood-level house price index (HPI), data on similar sales, and demographics to do a property evaluation. For more information on this tool, read our review on SmartZip.
Getting assistance from a qualified real estate agent can also be helpful in this instance.
|DID YOU KNOW: The average price of new US homes sold in 2021 was $409,800, compared to $389,400 in 2020.|
Your Home Equity
So, what do I need to sell my house? Apart from acquiring a home valuation, sellers should calculate how much of the residence can be regarded as their own property. Most homeowners have a mortgage that needs to be taken care of. This can seriously impact their ability to relocate to their next home, the cost of selling, etc.
How to Calculate Home Equity
Home equity is basically the loan balance on your mortgage deducted from your home’s market price.
Equity = Market Price – Balance of Loan
If you are wondering, when should I sell my house, consider this:
If the market is cold, sellers are obliged to accept buyers’ offers that do not cover the outstanding mortgages and expected fees. In this instance, negative home equity is recorded. In the event of experiencing short sales, the asking price of homes is adversely affected.
|DID YOU KNOW: It takes an estimated 5 years to accumulate enough home equity to allow for selling (the 5-year rule). The process can be given a boost by increasing your average house down payment and mortgage installments or refinancing your loan for a shorter lending term.|
The Costs of Selling a House
The process of selling a house involves a variety of costs other than the obvious. If you have the financial backup to do so, now may be a good time to sell your house. Keep the following in mind:
Homeowners generally do not know how to do an open house. However, preparing or staging the residence to be aesthetically pleasing, can make a huge difference in house value. Tidy up the living areas and remove all unnecessary clutter. Depersonalize the space so potential buyers may envision themselves living in the house. Emphasize special features.
You have decided, I am selling my home. Whether negotiating the sale of your home yourself or employing a real estate agent, the process remains the same:
- The buyer makes an offer
- The seller can counter the offer or reject it outright
- Initiate a bidding war if needed
- Place an expiration date on your offer
- Concede to pay closing costs
- Stick to your guns, you deserve a fair price
Finalizing the deal comes with its own financial burden. The property title, escrow, notary, and transfer tax are all part of the deal and can add up to an estimated 10% of the sales price. Additional transition expenses, relocation costs, and agent commissions amount to another 6%-8%.
Waiting Time Until Sale
Once the decision to sell has been made, how long should a house be on the market? The average time to sell a house depends on a variety of factors such as a realistic asking price, the age and condition of the residence as well as the particular location. The seller’s timeline can also influence the process.
Remember to factor in any ongoing maintenance costs needed to keep the property in pristine condition. Also, if you’re deciding between two properties, you may need to store furniture while you reside in temporary housing. Regardless, days-on-market (DOM) can be a drag if you are unprepared.
Sellers are required by law to disclose any and all defects or issues with the house to the buyer. Should I sell my house, despite it being in disrepair? Although home repairs are not compulsory, the house value can be diminished drastically if they are not done. Realtors advise that sellers do repairs that will enhance the worth of the residence. These include:
- Repairs that alter structural integrity, safety, or functionality
- Interior repairs on appliances, walls and baseboards, ceilings, bathtubs, and showers
- Exterior maintenance on doors, garages, landscaping, and special facilities
- Utility maintenance on smoke detectors, circuit breakers, and more
If you are wondering how soon can I sell my house, you can opt to lower the asking price of the property in lieu of doing repairs.
|DID YOU KNOW: 39% of realtors report reduced DOM when staging the bedrooms, kitchen, and living areas in a home.|
|Your life circumstances and financial situation can all have an influence on when it is best to sell your home|
|It is important to keep an eye out for the hottest real estate markets and trends|
|Preparing and staging your house can very well seal the deal|
|Undertaking repairs and renovations should have a positive impact on house value|
|Knowing your home equity status beforehand is important|
Reasons to Sell Your Home Now
You have cash in the bank and your debt is under control. Your home equity has never looked so good. But, are houses selling right now? Here is what to look for:
If the real estate market is hot, there will be a high demand for property and a low number of properties inventoried. In this instance, sellers come up trumps. High house prices become the norm and bidding wars ensue. This is the time to sell your house and make a profit in the process.
An added benefit of high demand is that buyers may accept the house as it is, waiving repairs and renovations.
High House Prices
The basic premise of making money is to invest at a low price and sell at a high one. This same principle can be applied to selling your house.
Should I sell my house then? If you are astute and able to correctly read housing market trends, selling your home when prices are high can yield you a tidy profit. However, as markets are very changeable it is a massive risk. Unless you know what you are doing, the chances of finding a similar home at a lower price when the time is right can be a tricky business.
Loans are awarded to home buyers based on loan-to-value ratios as well as the borrower’s income and debt burden. Thus, when interest rates are lower, banks tend to give more easily. This means that more buyers are able to meet asking prices in any market. Should I sell my house now? Indeed, you should.
|DID YOU KNOW: Real estate lead-generating companies can assist you in finding the best deals on the market. Realtors and brokerages make use of innovative lead generation software to make it happen.|
How to Sell Your House Quickly
Once you decide on when to sell your home, getting it done quickly is a priority. Try doing the following:
Find a Good Real Estate Agent
A good real estate agent has access to data relating to similar recently sold homes and knows the housing market trends.
Realtors specialize in specific neighborhoods and know the requirements for the particular market segment your home falls into.
How soon can I sell my house? you might ask. A realtor with experience, a good success rate, and a clever market strategy will get your home sold quickly and without fuss.
Focus on Serious Buyers
A serious home buyer will be keen to negotiate a purchase-and-sale contract without wasting time. They are ready to commit, able to pay the price, and willing to clinch a deal that suits both parties.
Keep Track of the Process
Why use a realtor if you can sell your house yourself? Keeping track of documentation and processes while selling your house is a complicated affair. If you are thinking of selling your home, prepare by researching the procedure and having all documentation such as title deeds and warranties on file. Get a legal contract signed and sealed as soon as possible. A reliable realtor will keep you informed all the way.
Make Any Necessary Improvements
Allow your real estate agent to guide you in affecting home repairs. Do only what will enhance your house’s worth. Your asking price will reflect accordingly.
Look for Chain-Free Buyers
A chain-free buyer does not rely on the sale of his own property before being able to purchase his next home. Finding such a home buyer ensures a speedy transaction and prompt completion of the sale.
Consider a Quick House Sale Service
How long should a house be on the market? Some sellers opt to employ a quick house sale service to reduce DOM dramatically. To use the service, sellers request an offer, submit a video tour of their property, and select a suitable proposal.
|DID YOU KNOW: 89% of sellers employ a realtor to list their homes for sale. This is mainly because estate agents are more equipped to market and sell your home quickly and efficiently.|
Did you ever think, I want to sell my house now, but I don’t know whether I’m ready? Selling your home needn’t be a traumatic event. Utilize your realtor’s expertise and knowledge. Keep an eye on housing market trends, house prices, and interest rates, and bide your time.
Having a 10% equity available when purchasing your first home is deemed satisfactory. Further property investment requires at least 20% in order to cover sizable down payment and enough cash in hand to comfortably cover the cost of selling.
It takes at least 5 years to build strong home equity. If you still decide to sell your home sooner, capital gains tax, closing sales costs, and unfavorable consumer appraisal may harm your chances of finding a buyer. It’s best to stick it out for longer.
Should I sell my house before buying a new one? Buying and selling concurrently is possible but not advisable. The trend is to sell your current home before you buy the next one. This is the safest option financially and guards against rushed sales and potentially having to pay two mortgages simultaneously.