Signs You Should Sell Your Home Soon
So you’ve been considering selling your home for a while now. You think it may be the right time and don’t want to miss out on the right market conditions. Selling a home is complicated. Your home is likely your most valuable asset. But unlike the stock market, your home carries a lot of emotional weight alongside it. It’s not quite as simple as buying low and selling high. Is now the right time to tap into your investment? Here are a few factors to consider:
A Growing Family
You’ve set down roots. Your family is starting to grow. Maybe you’re envisioning a yard for the kids to play in, or you need to switch neighborhoods to get in a different school district. Perhaps you’re sick of tripping over your spouse in the kitchen. If what used to be your dream home is now feeling a little tight, it may be time to move.
Maybe you bought your first home to start your investment portfolio. But a few years and a few promotions later, you’re ready to chase after your dream home. And you’re in a financial position to trade-up.
If any of these scenarios sound like you, you’re the right candidate for selling your house soon.
There are all sorts of lifestyle changes that justify selling your home. The 2020 quarantine has been an instigator for change for many Americans. Many suddenly have an urgent need for a home office with high-speed internet. Perhaps you used to love your swanky downtown condo but now feel the need for a backyard with privacy. Maybe you got a new job and are lusting after a shorter commute. Perhaps you want to travel. Or you’re seeking a smaller monthly premium so you can funnel more funds into an adventure. Whatever changes you’ve experienced, if you’ve found that your house is no longer reflective of your dream lifestyle, it’s time for a change.
If you’re considering selling your house, it’s important to be able to identify a seller’s market. Markets change constantly. So how do you know if the time is right? Look up the inventory of homes available. If the inventory is low, it’s likely a seller’s market. A seller’s market means that buyers don’t have many houses to choose from, making your home more valuable. There is no such thing as a national real estate market in America. Instead, there are thousands of micro-markets across communities. For this reason, it’s crucial to understand your area. Cities with flourishing economies are usually the seller’s markets. But this can change quickly. Look at job growth, population growth, and affordability as factors. Are you shocked at the small cost of a restaurant meal anytime you travel? Do you think of your community as being less affordable than others? Do you find yourself dreaming of living in a place where it’s easier to get ahead? If you answered yes to any of these questions, you might be living in a seller’s market.
Your Neighborhood Has Increased in Value.
Have you been keeping an eye on how your neighborhood has changed? Have you seen an increase in home prices recently? If so, your market is favoring home sellers. The National Association of Realtors puts out a monthly existing home sales report. The home sales report is a comprehensive resource for researching your specific neighborhood. In a steady housing market, homes appreciate at a rate of 2%-3% per year, but some areas have an even higher growth rate. If you’ve held on to your house for 5-10 years with that kind of growth, you could be in a strong position to profit off your home.
Seasonal Local Trends
Research shows that selling your house at the right time can boost your profits by 75%. Historically, spring is the best time to sell a home. But markets can differ depending on seasonal trends in each area. Technically, our next spring equinox begins March 20, 2021, But when do you feel the first hints of spring? Spring weather peeks through in Alabama in February. But it doesn’t start feeling like spring in Wisconsin until April or May.
Need a Financial Boost
If you need a financial burden lifted, now could be the right time to sell your home. Home expenses should be 30% of your income. If your house is high-maintenance and that’s taking a financial toll, now could be an excellent time to sell. It’s better to sell the house before you end up letting maintenance fall to the wayside. Wash your hands clean of the investment before it depreciates. It’s easy to get in a situation where you feel house rich/ life poor. Balance is key.
Signs You Should Wait to Sell Your House
A slow housing market could lull you into a different price category. If your local economy is struggling or a high number of houses are for sale in your market, it’s likely a buyers market. It could be best to wait until the market is in your favor or stabilizes before selling if you can do so.
Haven’t Built Equity
How many improvements have you made to your home since buying it? Do you get regular maintenance? Have you removed the popcorn ceiling and updated the appliances? If your house is in the same condition you purchased it in, the market value will reflect this.
Is your house in a desirable location? By a school campus or in the heart of the city? Is it scenic? If you’re ready to move, but the market isn’t in your favor, it may be worthwhile to use your investment as a rental, at least until the market has shifted. If a long-term rental isn’t your style, you can even consider Air BnB. You can always hire a property management company to help you manage your investment.
Capital Gains Tax Applies
Any homeowners who haven’t been in their house for at least two years, beware of Capital Gains Tax. In 2020 capital gains tax rates got up to a whopping 20%. It’s usually worth it to hang on to your investment for a few years before selling to avoid this fee.
No Cash on Hand
If you don’t have cash on hand, you may think selling your house is a quick fix. But if you can’t get your home in a sellable condition, you’ll be losing out on a higher listing price. Home sale prep can include painting walls in neutral colors, landscaping, professional cleaning, and staging services.
Need a little help determining if your house is ready for sale? Contact us for a home evaluation. We’ll let you know if the time is right for you.