Thinking Of Selling Your Property
Many factors go into whether you are ready to sell your house. Are our local market trends likely to make the sale worth it? Are you prepared for the sale of your home? These eight steps will help you decide if you are prepared to sell your home.
Do I Need To Sell My House?
You're most likely ready to sell if you have equity in your home, are in a seller's area, have sufficient cash to cover your moving expenses, and have let go of any sentimental attachments to your home.
Is It A Good Time For Me To Sell My Home?
Recent research shows that home values in the U.S. have increased 7.6 percent over February 2017. This means that many homeowners are enjoying more significant equity. However, the peak home-shopping season is approaching, and the number of homes available for sale has dropped 10 percent from a year ago. This makes spring and summer 2018 a sellers' market in many areas of the country.
What Is A Seller's Market?
A seller's market refers to a situation where more people are looking to buy homes than are available for sale. Seller's markets are a great place to sell because more buyers are looking for homes than you have.
What Is The Best Season To Sell?
The prime selling time for the nation is the first half of May (and Saturday is the best day to list). This window saw homes for sale sell almost two weeks earlier than the average and for $2,500 more.
Are You Thinking Of Selling Your House?
These are the questions to ask yourself when you're thinking of selling your home.
Are You Able To Make A Profit On Your Home?
Equity is the difference between your home's market value (how much it could be sold for) and your mortgage balance (how much debt you have on it). Most homeowners have some equity due to rising home values over the last few years. However, if you purchased a home at a high cost and the local market has declined, your equity could be negative. This means that your home is worth less than what you owe. This is also known as "being underwater."
How Can I Calculate My Home Equity?
Let's suppose you think your home is worth $250,000. You have $50,000 equity in your home if you owe $200,000 in mortgage payments.
The Bottom Line: Equity lets you pay off your mortgage and use the remaining funds to fund a down payment or other moving expenses. You may be able to sell if you have enough equity.
Are You In Debt Beyond Your Mortgage?
You should consider your external debts, such as student loan debt, car payments, minimum payments, credit cards, child support, and vehicle payments. To determine whether you are eligible for a loan, lenders will examine your financial picture using what is called a debt-to-income ratio.
It can be difficult to secure a mortgage because of the impact of credit card debt on your debt-to-income ratio.
What Is The Debt-To-Income Ratio?
DTI is often abbreviated to DTI. Mortgage lenders use this ratio to determine how much home they can afford. They will add up all your monthly debts and then compare them to your gross monthly income. This gives them an overview of your financial health. No matter what type of loan you apply for, lenders all have a maximum debt ratio to income. This means that they will not allow more than a percentage of your monthly income (including the new mortgage payment) to be used to pay off your debt.
The Bottom Line: If your debt-to-income ratio is below 43 percent (an industry average, which varies depending on lender and loan type), then you might be able to sell.
Are You Able To Save A Down Payment For A House Purchase?
While the standard down payment is 20%, some loans only require 3% down. Therefore, you will need more than 20% down or additional cash to cover the appraisal to be competitive in hot sellers' markets.
The Bottom Line: If you have enough savings to pay a down payment on a new property, you can start looking for a home. You will need to sell your home first before you can put down money on a new one.
Are You Able To Afford the move?
Moving costs are a common expense when selling your house. You will need to have enough money to pay for temporary storage, truck rentals, and moving services.
The Bottom Line: If you have enough cash to pay for moving expenses but not enough to make your down payment, it is another indicator that you are ready to sell.
Are You Able To Spend Cash On Home Improvements?
Many sellers make a few home improvements before listing. This allows them to get the most money possible.
The cost of home improvements can vary from a few hundred to thousands of dollars, depending on the state of your home. It may cost a significant amount to sell your home. Make sure you factor this expense into your decision-making process.
The Bottom Line: If you have the cash to make any home improvements necessary before you list, then you are likely to be serious about selling your house.
Are You Able To Accept Negative Feedback About Your Home From Potential Buyers?
A key part of selling a home is adapting it to what buyers want. Sellers often hear feedback from potential buyers about their homes. Unfortunately, it's not always positive. For example, you might find the decor you like not suitable for someone else. Or, the most important thing that you love about your home might be something they would change. It can be difficult to get buyer feedback. However, you need to be emotionally ready to give their honest opinions to sell the home.
The Bottom Line: If you can keep your critical feedback about the state and style of your house private, you will be emotionally ready to sell it.
Are You Ready To Downsize, Or Have You Outgrown Your Home?
Different stages in life have different housing requirements. Homeowners may feel the need to sell at any stage of their lives: divorce, new babies and grown children, retirement, or old age.
The Bottom Line: Major life events are good indicators that it's time to sell.