While we’re seeing a seller’s market right now and that can make it easier for you to get a good price for your home, there are other factors to consider as well. While the market may be ideal, selling when you’re not quite ready can have adverse effects on your financial situation. Below, there are a few factors that can help you determine if you’re in the right position to sell.
Do You Have Equity?
Selling your home when you owe more than your home is worth means you could leave yourself deeper in debt. This is how a short sale works and, unless you’re in a very bad financial situation, it’s not something you should attempt. To determine how much equity you have in your home, subtract your mortgage balance from the estimated value of the home. This will help you determine how much of a profit you can reasonably expect to earn from the sale of your home.
Are You Selling to Get Out of Debt?
The answer to this question should always be no, because selling your home rarely helps resolve large debt problems. You’ll still need to rent or buy a place to live and, unless you have built up a significant amount of equity in your home, it’s unlikely you’ll make much on the sale. Ideally, you should have little to no debt and you should have some savings in your bank account.
Have Your Needs Changed?
Aside from the previously mentioned practical matters, you should also think about your next move. Are you planning on changing your lifestyle, or growing your family? It’s important to think about your reasons for wanting to sell and determining whether or not your current home is unsuitable. If your home can suit your needs with just a few modifications, it may be more cost-effective to undertake a home improvement project.
Sometimes, there are emotional reasons for selling your home. For example, your children may have left home and you may be getting that empty nest feeling. Even in this case, it’s important to look at the local market and your