When Is It Time to Sell Your House?

Photo by Binyamin Mellish from Pexels

Selling your home is not a market-driven decision. You don’t sell your home simply because you want to recuperate the money you invested in it.

People who have different ideas of a home-some see it as an investment while others see a home as their roots.  There are even those who look out for free mobile home value.

People buy homes for different reasons, too. Some buy a property as a starter home for a young family while others invested in their dream home, which is the same house they want to be living in 30 years down the road.

Home-selling is a lifestyle decision first and foremost. People put their homes for sale fast because they need to move immediately after a job offer.

Sometimes, it took years before they’re able to put their properties on the market because of sentimentality. Whatever the reason is, when you become emotional in selling your home, you lose money fast.

Although you cannot cut your ties with a home where you first cradled your daughter to sleep, you have to be practical when it is time to sell your house.

Think about the money you are going to get from the sale. Study the market. Check your own finances. The worst thing to happen to anyone selling a home is realizing they cannot afford a new property even after accounting for the proceeds of the sale.


You Have a Positive Equity

At the end of the day, everything boils down to this one thing: equity. When the housing sector crashed in 2008, one thing people realized is that they owed more to their homes than they were worth.

Many had to sell homes at a loss, meaning they didn’t even get a cent outside what they already paid for the house. Some managed to break even, but that’s not enough.

If you are lucky enough to be in a position where you have positive equity in your home, that’s when you should sell. Hopefully, you’re also emotionally ready to move on from your home. Otherwise, you might lose that window of opportunity to sell your house for a profit since the market is volatile.

How should you compute positive equity? Deduct the mortgage balance from the market value of the property. That’s your equity. It should not be in the negative range. Good equity is enough to cover your mortgage balance and still have money to pay a 20% down payment for your next home.


You Are Clear of Debts

One thing is clear when selling a home, you need to buy a home again. Maybe it’s not in the present but it sure will be in the future. A good sign that you’re financially ready to apply for another home mortgage is when you do not have nonmortgage debts anymore.

That means you have zero or almost zero debt on your credit cards. You should also have at least three to six months of expenses in your emergency fund.

Why is this important? You’d have to apply for a loan again. Whether it is right after the sale of your home or in the future, the banks will look at your bank statements.

Imagine the horror of not being eligible for a loan. How will you buy your next house?


You Can Afford a New Home and the Move There

Selling your current home doesn’t mean you want a bigger house. You can be downsizing, too, because you cannot take care of a large property anymore.

Whatever your reason is, the new mortgage should fit your budget. Experts recommend that your mortgage should just be 25% or less of your net income on a 15-year fixed-rate mortgage.

Don’t forget that moving to a new home means spending on the move, too. If you’re hiring professional movers, that can cost thousands of dollars. Not to mention, you may have to renovate the new property. Even a fresh coat of paint will cost a few hundred bucks at least.


You Can Read the Market a Bit

You do not have to be an expert on real estate, but you do have to understand where the market is moving. No one can predict how the market will perform, but there are some indicators that can help you.   For instance, you can seek guidance from a real estate expert, who can fill you in on the current situation of the market. Well-known Realtor Spencer Hsu suggests that with the assistance of an expert you not only get to save your time but also your hard-earned money.

This year, experts are saying that the overall price of homes will decrease by 11%. That doesn’t mean the market is bad to sell a property because the median price will increase by 4% overall. You could still be getting a profit if you’ve had a good mortgage deal in the first place.

Buying, owning, and selling a home is always going to be a complicated process. This isn’t a pair of shoes you decide to sell because it’s not the right size and the shop didn’t allow an exchange. It’s a lifetime commitment to own a home and selling it follows the same train of thought.

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