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Your home is one of your most valuable assets-and an important part of your life. It’s not always easy to make the decision to sell your house, but sometimes it’s time to move forward.
Depending on the market conditions, your personal financial situation, and your own feelings about the house, it’s hard to know when it’s the right time to finally sell your house. Plus, trying to put your house on the market at the wrong time could have serious personal and financial consequences.
Do you find yourself asking: “When should I sell my house?” These 5 signs can help you decide whether you’re ready to start prepping the “for sale” signs and shopping around for real estate agents.
1. You’ve Outgrown Your Living Space – Or It’s Outgrown You
There are so many reasons why your lifestyle might not fit your house anymore.
The simple home you started off with might not be enough to fit a growing household, whether you’re planning to have kids or you’re adding a furry friend to the family. The home you bought with a huge yard, multiple bedrooms, and high taxes might start to feel empty and overpriced once your kids have left the house. You also might just decide that the house isn’t fitting your needs-for example, you might need a home office if you’ve decided to start working from home.
It can be cheaper and more cost-effective to downgrade once you’ve reached that point in your life. It also might be time for you to move to something bigger and better, as long as your finances are in the right place.
If your lifestyle is starting to change, it might be time to reassess your situation. Is your home serving your needs? Is it worth the current costs for maintenance and upkeep?
If not, it might be time to sell-so you can use the funds to reinvest in your future.
2. You’re Emotionally Ready to Move Forward
No matter how long you’ve lived in a current house, the process of selling can be emotionally difficult.
You might be selling the home your children grew up in, where you lived your formative years, or where you passed important milestones.
Putting your house on the market also requires you to prepare the house for potential buyers. This could mean dusting off your most treasured mementos or heirlooms and putting them in storage.
Plus, the stream of buyers moving in and out-sometimes passing judgment on the condition and value of your home-can be stressful.
But these factors are all part of the selling process. If you want to sell your house, you need to be sure that you’re emotionally prepared to detach and move on.
3. You’ve Researched Your Local Housing Market
The housing market trends around the nation are important, but real estate works on a local level.
That means you’ll need to have a good understanding of how the housing market operates in your area. Take a look at how others are selling homes in your neighborhood. What price are they setting the house at? What kind of prep did they do around the home? What kind of interest did they receive?
Not doing enough research is one of the main mistakes a homeowner can make when selling their homes. Knowing these mistakes can help you avoid common missteps and start the selling process on the right foot.
You can also sit down and talk with a local broker about the buying trend over the past few months. All of this can help give you an edge-you’ll know exactly what you’ll be competing with in the coming weeks.
4. You’ve Got Equity to Back You Up
Being financially ready to sell your home is largely determined by equity.
For the last few years, home values have been rising-which means many homeowners are building equity. This means their homes are worth more than they owe on them.
To determine your equity, first, you’ll need your current mortgage balance and your home’s estimated market value. Then, subtract your mortgage balance from your home’s value. The result will give you a good sense of what your equity is.
At the very least, you want to have enough equity to pay off your mortgage, with enough left over to put down a 20% down payment. But it’s even better if your sale can cover other costs-moving expenses, closing costs, and more.
5. You Have a Strong Credit Score
In order to qualify for a mortgage for your next house, you’ll need to have a strong credit score. This will also earn you a lower monthly payment and a lower interest rate.
First, order copies of your credit report from reputable sites like Annual Credit Report. You’re entitled to get one free copy each year.
Take a look at these reports and make sure there aren’t any errors that are affecting your score.
A score of about 720 and higher is considered strong in the housing industry–although the minimum for a conventional mortgage is about 650. If your score is significantly lower than that, you might need to focus on improving your credit score before you’re ready for the big move.
When Should I Sell My House?
Whether you’re looking to upsize or downsize your current living space, it all comes down to the big question: “When should I sell my house?”
Deciding to put your house on the market is more than just a financial decision. It depends on your savings, your lifestyle, and your emotional connection to your home. If your situation checks off any of these 5 signs, it might be time to look into getting a real estate agent.
Ready to take the next step towards selling your house? Check out our real estate section for tips, tricks, and insider info that you need to know about the housing market.