6 Questions to Ask Before Selling Your Home:
Selling your home is a big decision and shouldn't be made without careful consideration. Real estate is a good investment that generally goes up in value. As time passes, the value of your home could rise as you gain equity by paying down your mortgage. This can put you into a lucrative opportunity of upgrading to a bigger house or relocating. What should you consider before listing.
1. Is your housing market hot or not? Just like stocks, houses are investments that rise and fall over time. Selling at a good time can be an excellent financial decision. Are houses selling above previous year's values?
2. Are you ready to move? Don't let the motivation of a big payoff push you into selling your home if you are not ready to move. Unlike stocks, you have memories attached to the home. This is not only a financial decision, but an emotional decision.
3. Where will you go? If you are looking for a home in the same neighborhood or city, the housing values may have risen in proportion to your own home. This could cost more money on a monthly basis if you want to scale up. If you are looking to relocate, make sure to research the real estate market in your new city of choice.
4. What is the inventory of houses? A seller's market is a great time to sell. If houses are selling within a week of going on the market, then it indicates a strong seller's market. In a really hot market, sellers will receive offers the day of getting listed. This creates the prime opportunity for a bidding war and a big payoff.
5. How long have you lived in the home? If you have lived in the home for less than 5 years, you may not have paid down the 30 year mortgage to have any meaningful equity. If you purchased the home with a minimum down payment and rolled closing cost into the loan, then it might not be worth selling just yet.
6. Are there any major repairs or updates that should be done? In a buyer's market, you need to make sure your home is move-in ready without any large projects necessary for the new homeowners. In a seller's market, you can sell your home as-is and still find a buyer to give you a good price.
Purchasing a primary residence is one of the most important decisions you will make in your life. Whether you want to live in a home for 5 years or 5 decades before finding a new home, it's a choice that requires thorough planning and contemplation. Only you can know if it is the right time to sell your home.