When should I sell my house?
So... you're wanting to sell your house, but you want to do it right. Should I sell now, or wait? Let's look at some of the key factors to consider that will cut through the confusion.
1. It's a buyer's market right now - shouldn't I wait to sell?
OK, so it's a buyer's real estate market. Let's ask a more relevant question... Will you also be a buyer? If you will be buying another home, will you be moving up or downsizing? First, if you won't be buying another home for whatever reason, then you may want to wait for real estate prices to recover, thus increasing your equity cash-out. The same may be true if you are downsizing. Your goal here is to maximize your equity capture on the most valuable property in your transaction. Now let's take a look at moving up in a down market: For illustration purposes, let's say real estate prices are down by 20% right now. Let's also assume in a balanced market you would be selling a $100K house and buying a $200K house. In a 20% down market you would take a hit and sell for $80K... however, you may be able to get that $200K house for $160K. Which one is more.. $20K or $40K? If you wait for prices to recover and sell that $80K for $100K, then most likely that $160K bargain will now be $200K. It's only a matter of time until prices heat back up. Let's assume then that the balanced market then appreciates by another 20%. The $100K house is now worth $120K. The new house is now worth $240K. If you bought the new house in the down market at $160K, you now have an equity capture of $80K.
2. Do I have enough equity to sell?
Remember that it will cost 8% of selling price (more or less) to sell your house. Have a local agent run a market analysis AND a seller's net sheet to determine your "walk-away" amount of your sale. Your goal may be to put some of the proceeds toward your next house, or you may be in a position that you don't need a great deal of cash and you simply want or need to sell now.
3. I'm ready to sell, but is my house ready?
Have your real estate agent evaluate your property for marketability. Most buyers won't want to take on a project. A property in poor physical condition or poorly staged will simply help sell the house down the street that is more appealing. The only way to correct this situation is to make your property more appealing or take a hit on price. In most cases, your agent can go over a "punch list" of items needing attention that when resolved, will result in fewer days on market and a higher selling price.
4. The economy is bad right now.
OK, so the national economy could be better. What about your personal economy? If you want to sell and buy, your finances are in order, you have good credit, and have steady income, then do what you want to do, when you want to do it. Make your move! To borrow a quote from an old friend of mine... "I don't need the economy's permission to get my new house".
Allen Robison, Realtor, e-PRO
allen@allenshomesite.com