Ready to Sell?

Signs You Are Ready to Sell Your Home

By SaleCore for MiamiRE

There are so many factors that go into deciding if you are ready to sell your home, and timing is extremely important. While timing is a crucial part of your home-selling journey, it’s a very personal decision that should be based on your specific circumstances. Personal factors that you should consider first when determining if you are ready to sell your home include: lifestyle, current home equity, and whether you are financially prepared. Then, look at the external factors to determine whether it’s a good time to sell. Knowing whether it’s a seller’s market that will make your sale worthwhile, and choosing the best time of year to list your home (even down to the month and day) can impact how quickly your home sells and for how much.

Your Lifestyle

Concept of selling home - two people exchanging a small model home

In different stages of life, people have different housing needs. Marriages, divorces, new babies, grown children leaving the nest, retirement, and old age can all make homeowners feel that it might be time to sell. Whether you’re in need of more space or have more space than you care to maintain anymore, major life circumstances are good indicators of an appropriate time to sell. Regardless of your lifestyle, your home should meet the needs of you and your family.

Current Home Equity

Equity is the difference between the market value of your home (how much you could sell it for), and your mortgage balance (how much you owe on it). Due to the rising home values in the past few years, the majority of homeowners have some positive equity in their homes. However, if you bought at a high price and the market where you live has gone down, you could have negative equity, meaning your house is worth less than you owe, commonly known as "being underwater." Equity allows you to successfully pay off your existing mortgage and apply what’s left over toward a new down payment and moving expenses.

Financially Prepared

Concept of a nest egg, with eggs in wire basket

It’s very important to look at your finances before deciding if now is the best time to sell a home. You’ll need to assess any outstanding debt you may have, the cost for home improvements to sell, moving expenses, as well as the potential for a down payment on a new mortgage.

  • Debt: You’ll need to take a look at your other outside debt, such as car payments, credit card minimum payments, child support, and student loan debt. Lenders will take a look at your whole financial situation using what’s called a debt-to-income ratio to determine if you’ll be approved for a new loan. If your debt-to-income ratio is less than 43 percent (industry average varies by lender and loan type), you may be prepared to sell.
A concept photo of many construction and repair trades working on a home
  • Home Improvements: To get as much money out of the sale as possible, many sellers complete a few home improvement projects before listing, choosing the improvements that will offer the best return on their investment. If you have major repairs like replacing the roof, fixing the plumbing or repairing the water tank, you may need to wait until that’s complete before you list your property. The more work you can complete ahead of time, the easier it will be to sell. If it’s going to take any significant amount of money to get your home sale-ready, make sure to factor that expense into your decision-making process. While it may seem counterintuitive to have completed renovations or repairs just before selling your home, that work may actually be more beneficial than you realize. Sellers who have recently completed major projects often sell their homes faster and increase their profit margins.
  • Moving Expenses: One often-overlooked expense related to selling your home is the cost of moving. Whether you’ll be moving across town or across the country, you’ll have to keep enough cash on-hand to cover things like temporary storage, truck rentals, moving services, and packing supplies.
  • Down Payment: If you plan to buy another home, being pre-approved for a mortgage and making sure you have enough money for the down-payment on your next home is vital. The standard down payment is 20 percent, but there are loan options available that require as little as 3 percent down. If you have savings accessible to apply toward a new down payment, you’re in a great position to start shopping for a new home before selling your current home. If not, you’ll have to sell your first home before being able to put money down on a new home.

Seller’s Market

A large home with custom stone and wood facing with a sold sign in front

Ideally, you want to list your home when your area is experiencing a seller’s market. A seller’s market exists when the housing demand exceeds the supply. Because of the current inventory shortage due to COVID-19, bidding wars between buyers are greater than ever before. With more buyers competing for fewer homes, seller’s markets represent a great time to sell. In a seller’s market, inventory is low and homes sell quickly, often with multiple offers. Research your local housing market and talk to your agent to find out more information on how much homes are listing for in your area and how to accurately price yours to draw in the most offers, and maybe even incite a bidding war.

Best Time of Year

While the best time to sell your house has less to do with the season than it does the local market, demand is usually at its peak in the spring and early summer. Not only do homes listed at these times tend to sell faster, but also for higher prices. The weather is nicer, giving buyers more incentive to begin touring homes. Flowers are beginning to bloom, enhancing your curb appeal. And homes are full of natural light, helping your spaces feel open, warm, and welcoming. Although the market is very competitive right now, homes will receive many views regardless of when they are listed, but sellers can increase their potential sale value or decrease the days their home sits on the market by listing midweek, giving potential buyers time to view the listing online, speak to their agent, and schedule a tour for the weekend.

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