If you’ve been thinking about selling your home, you’re in the right place. No, we’re not going to help you ‘sell’ the property. Rather, we’re going to cross-check information that’ll help you solidify your decision.
In this post, we’re going to look at when should you sell your home, what things you need to look out for, what mistakes to avoid, and so on. Buckle up and get some snacks because it’s going to be an interesting journey.
Are You Ready to Sell Your House?
The first thing is obviously to ask the right questions to yourself. You need to be sure that you actually do want to sell your home and you’re ready to do it. You need to consider different aspects of your personal and social life before you should move on with the process.
Let’s guide you through a few pointers. You can tweak these factors according to your lifestyle.
You’re Out of Debt from Your Current Home
Only a handful of people are fortunate enough to buy their residential properties with liquid money that they own. For the rest of us, we need to rely on loans and mortgages to go through with the purchase.
So, it’s mandatory for a sound financial status that you’re out of debt before you sell your home. All of your mortgage or bank loans should be paid off before you think about moving on.
It’s also important because you may have already realized how hard and stressful it is to live with debt. If you don’t want to make the same mistake again, clear off your debts and have a substantial bank balance before selling.
Equity is probably the biggest factor when it comes to financially stable homeowners. If you’ve witnessed the market crash during the 2008-2009 era, you’d know how negative equity affected everything.
In simple words, equity is your upper hand on the mortgage rate. When the market value of the property is higher than the mortgage balance, you got positive equity. The opposite is true for negative equity.
Selling your house when the equity is not on your side is one of the financially fatal mistakes you can make. It’s known as a short sale in real estate. Breaking even is good not but that’s not what you want either. You should always sell your home when you have positive equity on your side.
To calculate your equity, you need to get your hands on the mortgage statement to find the balance first.
The next thing to do is finding how much you’re property is worth. You can guess pretty accurately if you do some research online through the local listings. But to be more accurate and fairer, you should talk to your real estate agent. The process is called comparative market analysis (CMA). If you don’t have a real estate agent, you can get one for free from any licensed agent.
All there is left for you to do is deduct the mortgage balance from the market value. If you have a positive number, that’s your equity. If you don’t, it’s probably not a very good time to sell.
A New Home Can Fit Your Lifestyle Better
One of the most beautiful things about life is that it constantly changes. So, what you thought to be your forever home may not fit your needs adequately anymore. And it’s completely normal for you to look for a new property that fits your lifestyle better.
The one thing you need to make sure of is that you can afford it. The mortgage must fit your budget comfortably.
You Have Money Coming In
Getting a new home is definitely one of the most exciting thoughts to have. But in the meantime, you cannot forget about other costs like packing, moving, closing costs, staging, and so on. We have a dedicated post of staging on our website. You should check it out to learn how you can maximize the market value of your current home.
The bottom line is, you need to keep the money coming to cover other expenses.
You Have Market Understanding
Whenever we’re talking about buying or selling properties, a lot of money is on the line. So, you should be 100% sure of every decision you’re making. How do you become so sure of your decision? Well, by doing research!
Research is a very powerful tool in the 21st century. It helps us understand things in a better way. With the immense exposure of the internet in today’s world, it’s extremely easy to find resources and learn from them.
You can analyze the market of your local area and compare them in a global setting to understand how the real estate works in your area. You can learn about the paperwork, the procedures, the risks, the opportunities, etc. from research.
Even if you have a real estate agent or even a realtor, you need a basic understanding of the housing market to validate the information and the decisions.
You Have a Realtor/Agent
This is not a mandatory condition to meet. But it’ll certainly help you in selling your house at the right time, to the right client. Real estate agents are certified professionals who work their way through the system to get licensed.
So, it’s safe to say that they have an upper hand over you when it comes to knowledge and experience about buying and selling homes. If you have an agent already, congratulations. If you don’t, you may want to hire one for the following reasons:
- An agent can advise you about when’s the right time to sell
- They can help you stage your home for a better price
- They can help with critical paperwork like pre-approval or proof of funds
- They’ll take care of the potential paperwork after the deal goes through
- They’ll take care of the scheduling and initial meetings with the buyers
Hiring a real estate agent is a very good investment whenever you’re dealing with personal properties. It can save you a lot of time and hassles in the long run.
You’re Emotionally Ready
We kept this point for the last because we believe it’s the most important one. You need to be content with your decision and you need to be emotionally ready to sell something you’ve worked so hard to get.
You need to make sure that you’re making the right choice for yourself and your family. Especially if you have family, you need to talk the decision through with the members. Take input from all of them and discuss for as long as you want.
Remember, it’s a very important decision to make, and you need all the support you can get.
What is the Best Time of a Year to Sell a House
Believe it or not, the housing market is affected by the time of the year, just like the weather. Whenever you’re thinking about selling a property, you need to make sure that it’s the right time. Otherwise, you can lose a lot of money in the process.
The best time for homeowners to start looking for properties usually starts in late spring. And it continues throughout the summer. At least it’s true for the majority of the US. The temperatures during that time are ideal to go house hunting.
As a seller, you need to target these times as well to stage your home and put out the ‘FOR SALE’ sign. If you have a real estate agent, he/she will tell you the same thing.
June and July are two months when the prices for homes are the highest. The first two months of the year, January and February are considered to be the low for the real estate market. It’s been concluded in a study done by NerdWallet. The study analyzed the property prices from 2015 to 2019.
However, these datasets are not consistent for all states equally. For example, May is usually the month where home prices are skyrocketing in San Jose, California. For Las Vegas, the month is December.
It means that the market is very much dependent on the area you’re talking about. So, if your current home is based in San Jose or Las Vegas, you need to target May or December as the prime choice for selling months.
All of this data indicates that the warm months of the year are usually the best time to sell your house. But it also means that you’ll be dealing with severe competition. Because other homeowners might be thinking about selling during these months as well.
As long as you have a good realtor, you don’t need to worry about it. Proper staging, the condition of the property, etc. factors will affect how the potential buyers view your home.
Is ‘Now’ a Good Time for Selling Your Home?
Yes, it is. There are many reasons for it. Since the crash in 2008-2009, the housing market has been a seller’s market. It means that the market is in favor of the sellers due to the increased need for properties.
This is true for all across the US. Buyers are willing to pay higher prices for properties that are well-maintained.
However, every coin has two sides. Just like you can benefit from selling your house right now, you need to pay a higher price when you’re going to get a new one eventually. In certain states like California, Connecticut, Hawaii, New York, etc, the real estate price is already over the reach of the majority.
However, there is a way around that for potential homeowners. It’s the mortgage rate.
Mortgage rates have come down significantly in the last few years. Low rates mean more interested buyers. It’s restoring the balance in a seller’s market. So, your best bet is to let go of your home when the demand is still high and get a new one for a lower mortgage rate!
Mistakes to Avoid When Selling Your Home
Humans are liable to mistakes. There’s no changing that. While we cannot stop making mistakes, we can certainly learn to mitigate the risks. The same principle is true for real estate as well. Only in this case, the mistakes can be very expensive.
So, let’s take a look at some common mistakes that sellers make and how you can avoid them.
Not Hiring a Realtor
We know and understand the fact that realtors can ask for hefty commissions on the sale price of your property. For some tight-budgeted homeowners, it’s really not feasible to spend that much on an agent.
But you should still not try to sell your property by yourself. No amount of research can make up for market knowledge and street smarts.
When you don’t get a realtor, you’re making yourself vulnerable to negotiations that you’re not sure you can benefit from. It’s especially true when you’re dealing with a potential buyer’s agent. Agents are trained negotiators. You’re not.
You won’t even have the correct idea of what your property’s current market value is. Or, how you should stage it. Or, if there are any necessary repair works.
All of these are reasons telling you to get a realtor, even if you need to share a commission. The right agent will always have your wellbeing in their minds. As your agent, it’s their ethical and legal duty to look out for you and getting you the best deal.
In fact, when you sell your home through a realtor, chances are that price bump you can get will easily cover the commission.
Except for getting a higher market price, an agent will take care of scouring the buyers, dealing with them, negotiating with them, the paperwork, and so on. It means that you just need to fall back and let them do their jobs. It’ll make your life much easier than if you try to sell the house by yourself.
However, if you’re still unwilling to hire a realtor, it’s not the end of the world. It’s not recommended, but it’s definitely a free choice. If you decide to not hire a real estate agent, we’ve got you covered anyways.
So, what do you do when you’re selling your home by yourself?
You need to start with research. You need to find out the trends in your local area. Start by comparing prices with similar properties in online listings.
After you get a good idea of how much your property is worth at the moment, consult stagers to maximize it.
You can also hire home improvement contractors to come and do a thorough check-up on your house before you list it for selling. Because finding out that your basement has mold when a buyer is present won’t be good, right?
These things will cost you some money. But it’s a fair price to pay to ensure that you’re handing over a well-maintained property. You’re going to need to put in a lot of hours and manual work to make the ends meet.
After you believe your property is ready, it’s time for the marketing part. As you don’t have a realtor, you’re going to be the marketer. Multiple Listing Service (MLS) is a good place to start. It’s usually ideal to add a separate phone number from the ones that you personally use.
Also, make sure that you’re attending the phone number you provided like a hawk. Of course, it doesn’t mean you should pick up a call at midnight. But during your operating hours, don’t let any calls slide. You never know when the perfect buyer may show up.
As you’re not going through with an agent, at least consult a real estate attorney. He/she will make sure that you don’t fall victim to any fraudulent activities during the deal.
Read: How to choose the right realtor
Listing the Price You’re Comfortable With
Another common mistake among new property sellers. As we live in a free market society, everyone has the right to negotiate. And when we’re dealing with big markets like real estate, there’s definitely going to be some hefty negotiations.
So, if you’re listing the price that you want, you’re making a mistake. Of course, you need to be consistent with the market but you need to tone down your expectations as well. You cannot expect any buyer to pay the price listed on your sale sign.
It’s somewhat a continuation of the previous point. You cannot list your property with outrageous pricing. It’ll minimize the leads you can generate. The ones you’ll likely generate won’t be interested in the property anyways. Because potential homeowners usually don’t like to mess around.
On the contrary, underpricing your property makes it more feasible. Because when you put out a lucrative deal on a seller’s market, it’s obvious that buyers will jump on it. As a result, they’ll bid back and forth until the property reaches the market value. And then, you can make the sell to the most suitable buyer.
Hiding and Not Repairing Problems
When you live in a house for a long time, it’s normal that the property may develop problems. The scary thing is that you won’t always notice them by yourself. That’s why we’ve mentioned that you need to hire a home improvement contractor and get things looked at.
If everything checks out, that’s great. If it doesn’t, the next mistakes sellers make is hiding them. Never hide a problem with your property. You might get away with it for the time being, but it can come back to you in a form of legal notices.
Evaluating the Buyer
If you have an agent, this point shouldn’t concern you because the agent will do the background checks and paper verifications. But if you’re taking care of the deal by yourself, never get into a contract without full loan approval or proof of funds (POF) letters.
These documentations are designed to save sellers from fraudulent transactions. A proof of funds letter or a full loan approval means that the buyer can afford the property. If you take your listing down without verifying these aspects, you may be setting yourself up for failure.
Not Staging Enough
If you go through the article we’ve done on home staging, you’d know how important it is. Staging allows potential buyers to connect with the property better. Also, the reduced clutter and tidiness make the house more appealing.
So, you should spend some time and money on either hiring professional stagers or do it yourself after proper research. You need to get rid of personal items, declutter the property, do some repairs, etc. before you can put the property out for display.
Not Having Homeowners Insurance
When you first bought your current home, you should’ve been equipped with insurance. If you didn’t, it’s not a big deal. But as you’re thinking about selling the property now, insurance can save you from unnecessary troubles.
It includes potential buyers injuring themselves in the premise which will make you prone to lawsuits. Also, you should be aware of the obvious hazards like your dog hurting the visitor or the visitor’s children falling into the pool.
The bottom line is, you need to make sure that you’re legally covered from every angle before you do an ‘open house’.
Selling During Cold Months
Sure, you may have to face less competition during the winter. But it’s still going to fluctuate the price of your property very much. Especially, if you live in a region where roads might get block during winter, you’re better off targeting a warm month.
If you have a realtor, he/she will advise you on when to list your property. If you’re handling the process by yourself, please do research on your local area. Find out the trends of buying and selling homes from the previous cases.
Not Taking Good Photos
We live in an era where everything we do is online-first.
We want to eat at a new restaurant. We check out the reviews first.
We want to buy a new TV? We check the specifications on the internet first.
It means that potential homeowners will look for properties online first before they come to check them in person. So, you need to make sure that you’re taking good quality pictures for your listing.
Capturing your home during the daylight is a good start. Make sure you cover every room inside the house as well as take good outdoor pictures.
Selling your home is a big decision. And it’s common among homeowners to decide when should they sell their home. If you’ve been asking yourself the same question, we believe we’ve answered them for you.
We’ve also shared some interesting insights on real estate marketing as well share tips to sell your property with the least resistance possible.
So, what are you waiting for? You have a home to sell!
Need a Realtor? (Elkhart & St. Joseph Counties – Northern Indiana)
I will help you market your home for sale and work with you to strategically price your home for the best results in this seller’s market. My marketing package, professional photos and 3D Tour/Drone Photography is second to none and among the best in the area among all other agents. I get houses sold. Just reach out to me direct by phone 574-387-2501 or email NickFoyHomes@gmail.com to get a valuation done on your home!
Looking for a home to buy? I can help you there too! We will work to get you pre-qualified with a lender first or having your proof of funds letter drawn up if you’re buying cash. Then set up showings and work with you through the offer process.
Nick Foy, Broker
RE/MAX Oak Crest Realty