For most people, a home is the most expensive item they will ever buy. The purchase of a home is not as simple as any other purchase because a home is an item and an investment. When people purchase a home they are not just making a choice on where to live; they are making a gamble on what that house will be worth in ten, fifteen, twenty years.
Buyers purchase homes with the hope that one day that home will be worth more than they paid for it so they may, if they choose, sell the home and make a good-sized profit. This profit is called equity, and it is extremely important to consider when looking to buy or sell a home. Buying and selling homes is complicated and emotional. Selling, in particular, can feel like a real gamble, and sellers often feel unsure of the right choices to make. A simple education on the best reasons to sell, and the best times to sell, can help alleviate some of the stress homeowners who are considering selling experience.
There are as many reasons to sell a home as there are homeowners, but some reasons are more compelling than others. If you own a home and feel the urge to sell, it may be helpful to sit down and contemplate why you are considering such a large financial and emotional change. Some homeowners, when they are honest with themselves, realize that they are thinking about selling their home for the wrong reasons. Simply wanting a change, or boredom, is not a good enough reason to sell. Another common mistake is always assuming the grass is greener somewhere else. That type of mentality if fine if you’re a renter, but selling a home simply because you are afraid that you could get a better deal somewhere else — more house for less money, a better neighborhood, a nicer place, etc. — is not a responsible financial decision. So what are some good reasons to sell?
Changes in Personal Finance
One of the best reasons to sell your home is due to changes in your personal finances. This can be a positive, negative, or neutral change.
Some homeowners purchased their first home when they were in a lot of debt. Perhaps, through hard work, your debt has dramatically decreased. Because of this you may be able to find a home that works better for your family at a lower interest rate. Furthermore, it will be likely that they have grown more financially savvy over the years through that debt reduction. Use your newfound savvy to make better choices.
Some homeowners will realize that they have grown a significant chunk of equity with their home. This is great news! If your home is now valued at a much higher price than when you first purchased it, that could be a very good reason to sell.
Unfortunately, sometimes our income is reduced either through a job loss, an illness, or other financial responsibilities. If your income is not enough to live comfortably with your current mortgage, you might consider selling your home to purchase something less financially straining. This is a responsible decision.
More often than not, a homeowner feels the urge to sell due to family or emotional changes. These changes are harder to use in decision making because they are not quantifiable like financial changes.
Often, homes are put on the market because the family is growing or shrinking. A young family might be expecting to have multiple children, so they will need more room to spread out. Conversely, a couple may have just waved goodbye to their last child heading off to college. They might not need that three bedroom house anymore. A house that is too big is just as much of a bother as a house that is too small. Both are excellent reasons to consider selling.
Other factors to consider are location and lifestyle. Location is often not much of a choice; our jobs largely dictate where we live. For some people, moving to shorten their commute is a very powerful reason for selling. Getting close to work can save time and money (think of the gas saved!). Retirees often consider selling. No longer chained to a town or neighborhood by job proximity concerns, retirees feel excited to broaden their location horizons and sell their home.
If you’ve finally made the decision that selling your home is right for you and your family at this time, you will need to start preparing your home for that sale. A home, like anything else on the market, is an item. You might have many emotional and sentimental attachments to your home, but potential buyers will not. Look beyond your fond memories to see your home the way a buyer would see it. This mentality will help you figure out where you need to invest time and money doing minor cosmetic and structural repairs.
Repairs & Updates
There are lots of little updates and repairs that you can do to your home to make it more appealing to buyers. Buyers want to purchase homes that look cared for and loved. Replace any broken or extremely worn parts of your home. A good place to start is the yard. Once you decide to sell, look at your home from the outside. This is the first impression a buyer will see. Touch up the trim paint. Reseed any bare grass in your yard. Plant a few new bushes or flowers. Inside, consider updating outdated and out of fashion finishes. These changes do not have to be expensive. A simple update to your kitchen faucets, cabinet handles, etc., can make a huge improvement to a space.
More than anything, you need to make sure your home is clean. As soon as you decide to sell, start going through each room of the house and do deep and thorough cleaning and de-cluttering. This is not only great for potential buyers (they will get to see the home’s true potential without being distracted by your accumulated clutter), but it is great for your pending move. Clean the items in your home that are easily neglected: baseboard, ceiling fans, windows, etc.
If you are planning on selling your home yourself, it would not hurt to hire a professional photographer for your online listing. If you want to entice buyers, blurry, uninspired photos will not do the trick.
Prepare Yourself Emotionally
Do not underestimate how emotionally difficult it will be to sell your home. This is especially true if you’ve lived there for quite some time. Try to separate your emotional brain from your business brain. You do not want to make important decisions about your home (such as the price) based on your emotional connection to it. Instead of focusing on the history you and your family have created in this house, focus on the exciting future to come.
The final big question during your home sell process will surely be: “when?” This is a tough choice. Of course sellers want to get the most money they can for their home, but determining when the market is ideal can be difficult. There are some factors to consider.
The ideal market for selling a home is simple economics: high demand with low inventory. Look through your market’s sale pages. If there is a huge amount of properties on the market, you will not be able to get a good price for yours; it’s too competitive. Conversely, you want to make sure there is sufficient demand. If the number of homes for sale is small, but there are no buyers looking for those homes, you’ll still have a hard time getting a good price. Do research on your market.
It is also important to consider the season in which you are selling. Most sellers have the best experience selling in spring and summer. Real estate agents say this is because the days are long, so buyers spend more time out looking at homes, which means they are more likely to see your listing.
Self/Cash Sale vs Real Estate agent Sale
A major decision you will need to make is whether you will sell your home on your own or work with a real estate agent. There are pros and cons to each. If you sell your home yourself you will likely be contacted by a cash house buyer. These buyers are often financial groups who will “flip” the property. There are definite advantages to these types of buyers. First, the time it takes to process the sale is incredibly faster with an cash house buyer. There will be no issues with banks and loans and detailed paperwork. This is bonus if you need the profit now, or if you need to move quickly. By avoiding a real estate agent you also avoid paying expensive commission fees.
Real estate agents have their advantages too. Hiring a real estate agent will save you time and you will have the benefit of their experience. Often, home sellers hire real estate agents because they simply want to avoid the stress of selling the home themselves.
Think over the pros and cons and decide which option would be best for you, your family, and your home.