5 Things You Should Consider Before You Sell Your Home
Is time for you to sell your home around the corner?
It’s not uncommon for homeowners to sell their prized possession. In 2021 alone, over 6 million existing homes were sold.
There are a number of reasons you could want to sell your home. Maybe it’s become too small for your growing family or your kids have left the nest, leaving you with too much space. Perhaps it’s a troubled property facing foreclosure or a bitter property row following a divorce.
Whatever the reason for selling, there are important things you need to consider. Selling a home isn’t akin to selling an old appliance. There’s a lot at stake.
Here’s a checklist of what to keep in mind:
1. The Housing Market
Under normal circumstances, every homeowner wants to sell their property at a good profit. Unfortunately, sellers don’t always get their wish.
There are a couple of factors that have a direct impact on how much your house goes for. The biggest factor is the housing market.
Home prices are subject to the forces of demand and supply. When it’s a sellers’ market (demand for houses exceeds the supply), prices are typically higher and houses sell fast. When it’s a buyers’ market (the supply of houses exceeds the demand) prices are lower and houses take longer to sell.
So, if you’re looking to turn a tidy profit upon the sale of your home, it’s prudent to consider the state of the housing market. A sellers’ market is the best time to sell. If you’re in no rush and it’s a buyers’ market, it makes more financial sense to wait till market conditions swing in your favor.
2. Outstanding Loans
The vast majority of homeowners in the U.S. have a mortgage. A mortgaged home is owned by two parties: the borrower and the lender.
If you’re still paying off your mortgage, it’s possible to sell the house, but there are a few conditions. You’ll use the money you get from the sale to pay off the mortgage and other selling expenses, and pocket the balance as your profit.
But what if the money from the sale isn’t enough to pay off your mortgage? It’s still possible to sell the house, but it means you’ll have to cover the mortgage balance out-of-pocket.
Besides a mortgage, it’s common for homeowners to have an equity line of credit. If your home has gained substantial value since you bought it, you will gain positive equity. You can use this equity as collateral to secure other loans, such as an equity release under 55 years.
In this case, you also have to consider the value of your other outstanding loans before putting the property on sale. If what potential buyers are willing to pay is less than what you owe on the home, selling won’t be a savvy idea.
3. The Condition of the Property
After several years of use and exposure to the elements, a home’s age will start to show. Thus, it’s essential to consider the state of the property before putting it on sale.
What’s the condition of the roof for instance? Does it need repair or replacement? What about the state of the foundation and the walls?
The general condition of the property will have a direct impact on its value and marketability. Most prospective buyers want properties that are move-in ready.
Making some of the repairs your home needs, as well as adding some upgrades, can add value to the property and make it more attractive to potential buyers. This is a plus when you want to sell fast and at a profit.
If you’re not in a position to repair the home, you can sell it as-is. However, be prepared for lowball offers.
4. FSBO or Hire a Real Estate Agent?
Selling a home is a multi-step process that involves a lot of paperwork.
When you choose to sell it on your own (for sale by owner), you’ll be responsible for everything that’s involved in selling a home, including negotiating with buyers and closing the deal. This can be taxing, especially if you’ve got no home selling experience, but on the upside, you won’t pay anyone a commission.
If you’d like a more hands-free approach, hire a real estate agent. This professional will handle everything that pertains to the sale, including home staging if necessary. Plus, with an agent on your team, you have a better chance of selling the house at the best price.
5. Your New Home
If the home you’re selling is your primary or only residence, it means you have to find a new home. It’s wise to consider your living options before putting the house on the market.
The most ideal situation is to move into a new home before selling your current home. But if you’re anything like most home sellers, you want to use the funds from the sale to purchase a new home. Since it’s not ideal to put the home on sale while still living in it, you can consider other options, such as moving into a short-term rental and putting your household items in a self-storage facility.
Sell Your Home Without the Stress
Selling your home is a big decision, whether you’re doing it at will or circumstances have forced your hand. It’s a long process, but with proper consideration of the factors we’ve fleshed out in this article, you can sell your home without any stress.
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