Signs You Should Sell Now
When it comes to home ownership, we all understand that everything doesn’t always go according to plan. There may be signs that you should sell your home sooner than originally intended. The best solution is to be aware of what they are in order to recognize them if one occurs.
Signs could come from your personal or family situation, or something you have no control over. It could also depend on the amount of equity you have in your home.
If you own your home “free and clear” (no mortgage), or still owe an amount well below market value, market conditions could be a favorable sign. When in that situation, it is good to monitor sale prices for similar homes within your community. If home prices are on the upswing and there appears to be demand, it might be worth considering a sale.
Suppose you paid $150,000 for your home, and owe $10,000. Your “research” (sites such as Realtor .com or Zillow) shows that similar homes in your area just sold for $190,000. Allowing $20,000 (likely too high) for commissions and transaction fees, and $10,000 to settle your mortgage, you would “clear” $160,000. If you wait another year, that opportunity to profit may not be there.
As a result, you would have several positive options for moving on. You may be able to purchase a smaller property for all cash and avoid having a mortgage. You could purchase a larger property with a substantial down payment and a mortgage you could easily afford.
It is possible that your home may have more space than you need. With working remotely becoming more acceptable than ever, you could show potential buyers how much office space they could have.
PREVENTING A FINANCIAL LOSS
There are other signs that you should sell your home now which are not necessarily for a profit. It could be to prevent a future loss and/or financial distress. Sometimes it can be sudden, while other times you can foresee a problem months ahead of time.
Personal reasons for a “fast” sale might include:
- Falling behind on mortgage
- Facing foreclosure
- Family emergency
- Unexpected medical bills
- Job loss
- Major repairs needed on property (plumbing, structural, etc.)
Sometimes needed repairs and/or maintenance can influence a decision to sell your home now. Replacing the roof after 10 years generally costs thousands of dollars. Same with the furnace, air conditioning, and possible masonry work.
A lot depends on your financial situation. For example, it might be more practical to extend a $10,000 “credit” to a buyer for roof replacement than to spend it yourself.
In the event you are falling behind on your payments, or faced with job loss or a family emergency, you should explore your options. If you lose your home, all funds generated from the sale go toward creditors instead of to you. In addition, chances are your credit rating and status will be harmed for the long term.
Selling before that happens may not bring any money your way, but could go a long way toward relieving your debt, even if you sell for a loss. Doing so could also go toward reducing your monthly cost of living.
For example, suppose your monthly costs (mortgage, property taxes, HOA, etc.) were $1,000 per month. By selling “before” you lose your home, you may be more easily able to rent. If you find a rental for $600 per month, you would then have $400 per month to go toward existing debt, or to save up for eventually purchasing another home.
OTHER SIGNS TO WATCH FOR
On the other hand, there could be circumstances which have nothing to do with the condition of your home or your financial status. It could be due to your neighborhood or the local business climate.
Schools are often evaluated on an annual basis. When a school has academic or other ratings suffer, it impacts decisions of parents looking for a top school district. If you reside in a community with a lot of school age children, it could impact property values. Consequently, if you witness or anticipate a downward trend, you might not want to wait it out.
Your neighborhood can dictate a lot about property values and trends. Even if your home is well maintained and in top condition, your neighbors’ homes may not be. It could be the other way around, where other homes have been upgraded and you can’t afford it. A rise in the local crime rate could also become a negative factor.
Sometimes the business world can impact local property values, especially in rural communities. There are cities which are dependent upon a factory, construction, or a large employer to drive the local economy. Other cites may depend on shopping, auto dealers, hotels, or specialty businesses for revenue.
Therefore, an upcoming large scale closing could bring about a reduction in the value of your home. In some instances, it could be better to sell sooner rather than later. (In other instances, it could be better to wait it out.)
Although there is no formula for watching for signs you should sell your home now, there are ways to be as prepared as possible. Keeping your home updated and in the best possible condition is a good start.
Here is why. Suppose the circumstances prompting you to sell your home now are due to your financial situation. If your home is updated and in good working condition, you will attract a “better” offer.
If the circumstances are due to something beyond your control, you want to have an advantage. Having your home more appealing than your neighbors’ homes helps your property sell faster than theirs.
All you can do right now is to keep your home in the best condition possible, and monitor your neighborhood. That would have you ready for the signs you should sell your home now.