To determine if you should sell your home, consider life circumstances, but also your financial situation like the amount of equity you have in your home, your ability to afford a new home, and all of the costs of selling
Talk to your Realtor to understand your local housing market and how trends can influence your goals
Then ask yourself some preliminary questions such as:
- How much is my home worth?
To guesstimate how much your home is worth, with with your real estate professional and ask for a report to compare recently sold homes in your neighborhood that are similar to yours. These comparable homes are often referred to as “comps”. By comparing the sale price of different comps, you can get a sense of the price range home buyers might pay for your home. Another good way to gauge is by looking at your old Appraisals, if any.
Consider things like the number of bedrooms and bathrooms, the square footage of the home, and any unique features. The experiment is that no two homes are exactly the same so you’ll need to make adjustments for each individual feature.
- Do I have enough equity to sell my home?
You’ll typically want to have enough equity in your home to pay off your mortgage, the costs of selling, and the costs of moving. Many people also wait to sell once they have enough equity to put towards a down payment on their next home.
Home equity is the percentage of your home that you truly own. Let’s say you bought your home entirely with your own cash, then you would have 100 percent equity. However, most people choose to borrow money to buy a home, which means they slowly build equity as they repay the loan with interest each month.
You can estimate your home equity by subtracting the amount of money you owe on the home (remaining loan balance) from the amount of money you could sell your home for (market price). Here’s an example:
YUP, It’s possible to have negative equity in a home, meaning you owe more money than the home can sell for. This is commonly called being “upside down” on your mortgage. Selling your home for significantly less than you paid is typically done as a last resort.
Understanding how much equity you have is a good first step in determining if you should sell your home. Once you have an idea of “how much of your home you own”, you can estimate if your equity will cover the costs of selling.
- How much will it cost to sell my home?
When selling a home, many people fixate on the 5-6 percent that’s typically paid in agent commissions. However, the total cost of selling a home can come closer to 10 percent of the sale price. Some of these additional costs include seller concessions, closing costs, title/escrow fees, county/city transfer taxes, repair costs, and housing overlap costs if you aren’t able to line up the sale of your home with the purchase of your next.
Send me a message if you want an estimated total costs on selling your home so you can understand how much you may pocket after the sale!
If you’re buying a replacement home, check out my calculators on my page to determining how much home you can afford. Typically, the loan you can qualify for depends on the ratio of your debt to income, so it’s important to have a strong understanding of how much money you have coming in each month versus money that’s paying down debt.
- How long will it take to sell my home?
Always determine your moving timeline and when you move might impact your goals. Taking longer than expected to sell can have a financial impact. It can delay a job opportunity, force you to incur costs like storage fees or temporary housing, and of course, selling a home means maintaining it.
- Should I make repairs?
As a seller, you’ll be required to disclose any known issues with your home to buyers. You are not required to make repairs, but you’ll likely need to price your home based on the costs of needed repairs or you may need to offer a concession to the buyer so they can do the repairs themselves. Expensive repairs like fixing an HVAC unit or fixing a pool, for example, can be a deal breaker for buyers looking for a move-in ready home.
If you don’t want to deal with repairs, talk to your Realtor so we can price your property accordingly allowing you to skip the guess work and move on your timeline. Items Buyers may look out for may be the safety, structure, and functionality of the home.
While life events like a family milestone or a new job can encourage you to sell your home, the decision often involves many other factors. Understanding your finances, your timeline, and how you’ll sell can provide good insight into whether you’re ready to sell your home.
Thank you for reading!
Blackrock Investments and Finance, Inc.
direct (951) 963-4023 | cell (626) 731-4485 |fax (626) 529-0850
email firstname.lastname@example.org | web http://www.realtorjudyha.com
CA DRE: 01884583
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