Selling a home, like buying, is a practical as well as an emotional decision with momentous implications. A home is the biggest investment most people will ever make. Its purchase often signifies a life-changing moment – marriage, a new job, or the birth of a child – and is an exciting time. However, most of us experience more than one life-changing moment, and that may mean considering whether or not it is time to sell. In fact, a comparison of market vales over the last four years shows that now might be the window of opportunity you’ve been waiting for. Following are my top four points to consider when trying to decide if it is time to sell your home.
If your home has equity – you don’t owe more on the home than its value – you have equity. Better yet, if the equity is 20-percent of more, that’s another mark in your favor because being able to put 20-percent or more down on your next home keeps mortgage payments down. The housing market has been slowly recovering since the downtown that began in 2006. Most areas are seeing a change for the better or even something of a boom. If that is the case in your area, then it might be worth considering putting a For Sale sign in the front yard.
Your mortgage isn’t the only thing to consider. Take a look at the rest of your debt. If you’ve paid off all or the vast majority of your non-mortgage debt and your savings account can cover three to six months of expenses, then you’re on solid financial ground. You’ll need something of a cushion to get your existing house ready to sell, pay for selling costs, and to move to your new place. These aren’t part of equity, but they can add up. If the numbers still come out in the black, maybe it’s time to consider selling.
If you find yourself wishing for more space with the arrival of a new child (or two!) or an elderly relative (or two!), it might be time to sell. The same is true on the other side of that equation. If the children have all moved out and you’ll feel like you’re rattling around in too large of a space, it might be time to sell. Or perhaps, you’re the aging relative who would rather spend time traveling or with the next generation than tending to a yard and house, then it might also be time to sell.
The same events that encouraged you to buy a home can dictate whether or not it’s time to sell. A new job, marriage, health issues, divorce, or the comings and goings of children can all raise the possibility that it’s time to move. Our advice is to sell when you need to, when it’s best for your family and life, not the market. Equity, affordability and size are all important to keep in mind, but ultimately the time to sell is when it it’s right for you.