Not many people buy a house with the intention of selling it later on. After saving for several years and going through a brutal mortgage application process, all you want is to keep your new home.
However, it’s not uncommon for homeowners to put their properties up for sale. A whopping 5.34 million existing homes were sold in 2018. So if you’re planning to put your home on the market this year, you’re not alone.
People sell their homes for various reasons. If you’re seeing any of the following signs, it might be time to sell yours too.
1. You’ve Outgrown the Home
When you bought or built your current home, it was all perfect for your living needs. But then things changes and the property starts feeling cramped.
Maybe your family has grown; you have kids now who need extra bedrooms and space to play. Or you have acquired more stuff, such as cars and other equipment that need more space. Or it’s a combination of both.
Regardless of your specific circumstances, it’s clear you have outgrown your home. It’s also a sign you need to sell it acquire a bigger one.
Perhaps you’re thinking, “Why can’t I just build an extension to the home?”
Well, in most cases, building an extension takes a lot of work. You’ve to acquire the necessary permits, hire a contractor, and the extension might not blend in well, thus affecting the home’s curb appeal.
2. You’ve Got Too Much Space
If you’re not busy outgrowing your home, it’s probably busy outgrowing you!
OK, your home won’t suddenly increase in size, but if there’s too much free space around, you’ll feel like it’s outgrowing you. This is especially common among parents whose children leave home for college or into residences of their own.
So if you’re an empty nester, there’s only so much you can do to fill up the free space.
What’s left to do? Put the home on sale and buy a smaller one.
3. You Can Afford to Sell the Home
Selling a home isn’t just about putting a ‘for sale’ sign and waiting for prospective buyers to come in and make their offers. You should only sell your home when you can afford to.
What does this mean?
Let’s say you’re planning to sell your home at $300,000. However, you still have a $170,000 mortgage on the house. You put the home on the market and to your surprise, nobody is making an offer that’s more than $150,000.
Clearly, accepting such an offer means you’ll be making a big loss. The sale won’t even go through because the mortgage company won’t allow it unless you pay what you owe them in full. If you’re in this situation, it’s not the right time to sell.
On the other hand, if you’ve no mortgage or you’ve got positive equity in the property, you might be in a good position to sell it, especially if you’re also experiencing signs 1 and 2.
Bear in mind selling a home is all about getting the most value – even when you’re in distress and looking to sell quickly. As such, you should also be able to make the necessary repairs and make a couple of upgrades that can boost its value.
4. Your Home Is in Pre-Foreclosure
Nobody wants to lose their home. But if you purchase yours through a mortgage, the risk of foreclosure is always there. In fact, 1 in every 200 homes will be foreclosed upon.
If you’ve defaulted on your home loan for a couple of months, typically three, your lender will initiate foreclosure proceedings. Ultimately, you’ll have to vacate the property and let it go on auction so the lender can recoup their money.
The good news is you don’t have to let it get there.
From the time you default your first payment to the time your lender sends you a notice of foreclosure, your home will be in pre-foreclosure. During this period, you can sell your home, as long as the money you’ll raise is greater than the amount you owe your mortgage lender.
And because you’ll want to pocket every penny you can get from the sale, you can sell your house without a realtor. This way, you won’t have to pay any commission to the middleman.
5. You’re in the Middle of a Divorce
Going through a divorce doesn’t necessarily mean you have to sell the house you shared with your soon-to-be ex-spouse.
However, there are circumstances that can make a sale inevitable.
For instance, if no one wants to keep the home and you live in a community property state, selling the home is one way to solve the problem. Or if one of you wants to keep the home but cannot afford to buy out the other, sell it!
6. It’s a Sellers’ Market
Sometimes the real estate market can get so hot it’s impossible not to sell your house and cash in high profits.
Say you bought your house for $300,000. A decade later, similar homes in your neighborhood are going for double that value, and, importantly, people are paying!
If you’re looking to make some good profits, you can sell the home. However, keep in mind you’ll also need to buy a home after selling. If you jump back into the market immediately, you’ll meet expensive prices!
This sign is compelling for people who already own other properties they can move into after selling the one in a sellers’ market.
It’s Time to Sell Your House!
Over time, you’ll develop a deep sense of attachment to your home that will make selling a difficult step. But at some point, you have to let it go. The signs fleshed out above are some of the clearest indicators you can use to know it’s time to sell your house.
Keep reading our blog for more real estate tips and insights.