All homeowners reach a point where they face a simple question: Should I sell my home? The answer is a very personal one. Everyone’s situation is different. But there are a variety of factors you can weigh to determine if it’s the right time to sell.
If you find yourself in this situation, the first step to take is deciding not to make a purely emotion decision and instead think things through. There is no right or wrong answer. As you will see below, there are almost always good reasons for selling your home or keeping it for at least a little while longer. The key is to consider those factors and decide what works best in your situation.
In general, keeping your home can work well if it meets your current and future needs, it’s a location that meets your personal needs (such as having good schools ) and if prices in your area are low. Selling can make sense if you need a different kind of home or have an opportunity to make a great deal of money.
If you find yourself struggling with this decision, consider the following.
Making a Decision on Selling Your Home
As with any complex question, it helps to make a list of the ways that taking one path instead of the other will benefit you and your family. The following offer some topics to get you started as you consider whether it’s time to sell.
Reasons to Stay in Your Home
While selling a home is a big financial decision, it’s wrong not to also consider the emotional factors. The following touches on both.
You’re Perfectly Happy
While sometimes change is good just for the sake of the change, selling a home does not usually fall into this area. If you and your family are comfortable and happy in your home, there’s no reason to move on. Just make sure that the factors that make you like a home are expected to continue into the future.
There’s rarely a good reason to leave an area if you have kids and the area has great schools. The value of great schools can outweigh any other challenges you might face in staying in your home. Having a home zoned to a great school district is a smart reason to stay put.
Your Current Home Is What You Can Afford
Many times, people make the mistake of focusing in on moving in to their dream home in an expensive area, but it’s really a financial stretch to do so. From a purely financial perspective, it’s best to stay in your current home if making the monthly mortgage payment is comfortable at your current rate of income. Buying “too much house” can quickly have a big, negative impact on your finances.
Prices Are Low
Prices rise and fall on the real estate market, but the long-term trend is that prices rise over time. Don’t sell your house too early and miss out on a chance to make much more money. Patience is definitely a virtue when it comes to real estate.
Reasons to Sell Your Home
Sometimes, you have to move. Your company might transfer you to a different office. Or you might find a better job in a different city. Personal reasons, such as marriage or divorce, also often led to moves. But in all those cases, circumstances take the decision out of your hands. The following looks at factors to consider if the decision is all yours.
You’ve Built Significant Equity
Over time, your monthly mortgage payment starts to create a wonderful gap between what the home is worth and what you still owe. That amount can become so large that people decide they want the cash rather than the house. It’s a personal decision. Determine your equity by looking at the recent sale prices for similar homes in your neighborhood minus what you still own on the home.
You’ve Outgrown Your Home
Many buyers consider their first home a “starter home” that they plan to upgrade from at some point in the future. The typical scenario is that people have kids, the house fills with items, and soon they need more room. This is one of the biggest reasons for selling.
You Can Afford a Better Neighborhood
As mentioned above, many people focus on a dream home in the perfect neighborhood. It’s a mistake to move into that home if it puts too big a strain on your finances. However, if you and your family reach a point where you can afford the bigger home, then it might be a good time to sell your current home and move into your dream home.
Home Values Are High
Sometimes, your equity in your home suddenly increases because home prices in your area jump higher. If that’s the case, it’s a good time to sit down and figure out just how much you can make by selling. Many people choose to take a big payout and sell their homes during house market bubbles. However, just ensure that you have a place to move that still fits within your budget.
Deciding whether to sell your home is a personal decision. It can seem complicated and difficult, but it’s a good problem to have. Weigh the benefits of selling or staying and decide what works best for the current and near future. That way, the choice you make will never be a “mistake,” but one that works best for you and your family.