Is Now the Suitable Time to Sell Your Home?

24
Oct

Is Now the Suitable Time to Sell Your Home?

There are several reasons why now may be a suitable time for you to sell your house. Depending on your situation, here is what you should consider in your decision:

Timing

Historically, spring and summer are when buyers start shopping for their new home, but so are fall and winter. The geographic location and climate where your home is located should determine when you should list your home. But remember, following home season cycles may mean you may have more competition. Do your research online or talk to a realtor before making your decision.

Inventory

Over the past year, surplus buyers and low inventory have resulted in bidding wars and higher home prices. While this has benefitted sellers in the past, not all geographic areas are still experiencing low inventory.

Interest rates

The Fed is working to lower inflation by raising interest rates which impact the interest rates on mortgages. The average rate on a fixed rate 30-year mortgage is 5.54%, significantly higher than one year ago. Rising interest rates may keep some borrowers out of the market if their increased monthly payment no longer qualifies them for a mortgage. You may consider how rate increases may impact your ability to sell quickly.

More home equity

Since home values have risen nationally, you may have a record level of equity at your disposal. You can use the extra funds to purchase a new home, expand your real estate portfolio, or invest in other wealth-building strategies.

Increased profit

If you put your property on the market, there’s a possibility it will sell quickly for the top dollar, given the current housing market. If you decide to sell your primary home, you may have to pay more to live in a comparable property.

According to Bankrate, there are signals to look for to determine the appropriate time to sell your home:

When is it a good time to sell?

  • If interest rates are low- Low interest rates entice more prospective buyers to enter the market, which is advantageous to sellers. An increased number of buyers shopping for homes often leads to bidding wars and drives up home prices, meaning you can likely sell your home for a solid profit.
  • If supply is short- A shortage of housing inventory also drives up demand and prices for available homes. What’s more, when housing supply is low, homes on the market tend to sell much faster.
  • If you’re ready to downsize- Downsizing may be a more budget-friendly choice than maintaining a larger, costlier home. For older homeowners, downsizing may even be a necessity.
  • If you need to relocate- If you’re relocating to a new state for a job or want to enjoy your retirement in a new area, and you need the profits from the sale to put toward your new place, selling is unavoidable.

When is it a good time to wait?

  • If rates are rising- Rising mortgage rates often mean fewer buyers and a smaller pool of buyers who can afford to offer the price you want.
  • If you’re upsizing- The cost to purchase a new, bigger home may be unaffordable in a hot market.
  • If you’ve recently refinanced- If you’re recently refinanced your mortgage, it may not make financial sense to sell just yet. You may actually lose money doing so, when considering the closing costs and other fees typically paid as part of the refinancing process.
  • If your home is in poor condition- Got a long list of repairs waiting to be completed around your home? You may want to postpone selling until some of the work can be done. It’s important to show your home in its best light in order to land the most favorable offer possible.
  • If you have no game plan- If you’re simply trying to time the market to make a profit and have no plan for after your home is sold, it may be best to wait.

Source- Should I sell my house now or wait? Bankrate.com

In Closing

There is a lot to consider before deciding to sell your home. Your financial professional can help you investigate home trends in your area and determine an appropriate strategy for your situation and how selling your home now may impact your finances.

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