Are you ready to sell your house? That is a question most homeowners face at some point in their home ownership journey. If you are a first-time buyer, it may be more daunting than for those who have been around the block twice or more. If you find yourself in this situation, it is good to do your due diligence in understanding your motivations to want to sell.
In this article, we cover signs that you are ready to sell your house, including financial, market-related, and emotional ones. Keep in mind that you do not have to wait for all these signs to align to know that you are ready to sell. If several align, then it may be an excellent time to start the sale process.
Signs That You Are Ready To Sell Your House
You Have Equity
Equity is the most significant factor in determining whether you are ready to sell. It is calculated by deducting your remaining mortgage payments from the current market value of your house. If you owe the bank less than what the home is worth, you have (positive) equity and should be ready to sell. If you owe the bank more than the house is worth, you have negative equity, meaning it may not be the best time to sell.
Out Of Debt
Aside from your mortgage repayment debt, other debts can be a factor in deciding whether you are ready to sell. If your non-mortgage debt is substantial, you may struggle to finance the expenses related to selling a house. These costs include staging your home, doing minor repairs, and paying for closing costs. If you plan to buy another house, non-mortgage debt may make it difficult to secure another mortgage.
You Have Savings
Selling a house is not cheap. Aside from the cost of selling the home, you must pay for expenses related to moving and securing and preparing your new house for occupancy. You should have savings to pay for house-selling and moving-related costs, plus an emergency fund and three to six months of living expenses set aside to absorb any disruption that comes with moving.
Strong Credit Score
If you are selling your primary residence, you will need another place to live. For you to be ready to sell your house, you need to have the capacity to purchase a new one, which requires a mortgage that you can only access if you have a strong credit score. If your credit score is weak, you may be able to sell your house but might struggle to buy your next one.
Can Afford To Buy A New Home
Deciding whether you can afford a new home depends on whether you are down-sizing or up-sizing. If you are downsizing and have substantial equity in your current house, you may be able to pay cash for your new smaller home. If you are up-sizing, you will need to know whether you can pay the difference between your current equity and the cost of the new home.
Can Afford The Cost of Moving
Full-service interstate moves can cost upwards of $10,000, while local moves can set you back up to $2,000. The best way to service these costs is through your savings, since the money you get from the sale may not come in time to finance your move. Nevertheless, if you can afford these and related moving costs, you have one more box ticked when it comes to selling your house.
Can Afford The Cost of Home Improvement
Home improvement cuts two ways – improving your current house and improving your next house. For your current house, you might need to pay for repairs and other enhancements to ensure it sells quickly and for a reasonable price. For your destination house, you may need to invest in some improvements, especially if you purchase a fixer-upper.
Done Research On Your Local Market
Local market research tells you two things – are similar houses selling quickly, and are they selling for reasonable prices. Doing this research will tell you whether it is an excellent time to sell and whether you should start the selling process. If your research shows that housing prices are depressed or houses are sitting in the market for long, you may not be ready to sell your house.
You Have A Real Estate Agent
Having a great real estate agent is the epitome of house-selling readiness. Although some people choose to sell themselves, having a real estate agent to guide you through the process is still considered the best option. If you have not found an agent yet, it might be good to hold off selling the house until you find the right one.
You Need A Bigger/Smaller Space for Your Family
Outgrowing your current house is a sure sign that you might be ready to sell your house. Needing more bedrooms because your family is growing or needing more space to accommodate changes in your lifestyle are both excellent reasons to sell your house and upgrade to a bigger property. The opposite also applies. An empty nest or a general desire to downgrade your space likewise indicates that you are ready to sell your house.
Emotionally Ready To Sell
Those four walls represent years of memories. It follows that selling a house you have lived in for so long can take an emotional toll. If you are not emotionally ready to sell, it may make the selling process difficult, and even prevent you from making the right decisions when selling.
Ready For A Change
Sometimes, being ready to sell a house is simply about wanting change. In your quest for change, you may consider moving to a different part of the country or even another country. If your desire for change is strong enough, it can be a strong indication that you are ready to sell your house. Just be sure it is a deep-rooted desire for change and not just a passing desire that can be better served by a holiday.
Have A Plan What To Do Next
You are ready to sell your house if you have a “what next” plan in place. That plan should include the “why” part of selling (which is addressed in this article) plus the next steps of what to do after you sell. Some of the next steps in your list can include financial planning, starting the search for your next house, and understanding how the move will affect your lifestyle.
Factors To Consider
Now that you have a good idea of why you want to sell and whether you are personally ready, you also need to consider external factors.
These factors include:
Number of Homes Sold
The number of homes sold in your category, location, and price is a reliable indicator of whether you should sell. If the data shows that several similar homes have sold in the recent past, this might be a sign that demand factors may favor your sell decision.
Selling your house at the right price point is essential to not only getting value from the sale but ensuring the house sells fast. If in your area similar houses have sold for less than what you are willing to accept, you might not be ready to sell your house. Waiting for the market to turn around might be an option in such cases.
How Fast Selling
How quickly houses in your category are selling is the third factor determining your readiness to sell. If houses are selling like hot cake, this can influence a snap decision to sell. However, if houses are sitting on the market for months with sliding prices, it may be prudent to wait.
Local Market Trends
“All real estate is hyper-local,” goes the real estate maxim. Despite national trends pointing to a sellers’ market, local real estate market trends might paint a different picture. Doing local market research will help you identify local market trends and decide whether to sell or wait.
The final factor to consider is interest rates. While these do not vary much, any rise in interest rates may diminish homebuyer purchasing power, making it harder for you to get a reasonable price for your house. Similarly, lower interest rates may make it easier to sell at your desired price point, if you have priced your house correctly.
Knowing if you are ready to sell your house is a process that involves a wide range of factors that mean different things to different people. Most of these factors are also fluid and will change with time. The final decision you make will depend on how all these factors affect you as an individual, where you are in life and what matters most to you at that point, and whether you can live with the trade offs that you must make when selling your house.
Ready to Sell Quickly for Cash?
If you want to sell your house quickly and for cash, you can do so by selling through an investor like Need Help Selling Home. We let you bypass the long process of selling your house through a real estate agent, give you a quote within hours, and buy your house quickly for cash.