Thinking about selling your home? It can be hard to know when is the right time to sell. Buying and selling a home are two of the biggest financial transactions you’ll make in life. If you’ve been considering selling your home but just aren’t sure, here are 6 signs it’s time to sell your home. Any of these can make for a good reason to sell your home, and especially if you have more than one of these signs, it may be time to start talking to a Realtor.
You’re Running Out of Room
One of the biggest signs it’s time to sell your home is that you’ve simply outgrown it. If your family size has changed in recent years and your space is starting to feel a little crammed, it’s time to find something bigger. That may mean more bedrooms for the kids, or even an in-law suite in the backyard for aging relatives.
Many first-time-homebuyers start out in a “starter home”, which is generally smaller and less expensive than their “forever home.” Buying a starter home allows buyers to get into homeownership while still building their careers and income. If you’ve been in your starter home for a few years and your family size or income has grown, it’s a good time to start looking for a larger home that serves you better.
You’re Ready to Downsize
On the flip side of not having enough room, your house may now be too large for your current needs and comfort. If children or other family members have moved to homes of their own, it may make sense to sell your home and find something smaller.
A smaller property generally means less maintenance and upkeep, which frees up your time and money to spend on things you enjoy doing. Put simply, less house means less house to clean and keep up with!
You may choose to sell your home and rent or purchase a different housing set up like a condo or townhome. And if you’re up for extreme downsizing, there’s even a growing trend of people living in RVs full-time and traveling the country. What possibilities would selling your home open up for you?
You Have Positive Equity
An important thing to keep in mind when considering if you should sell your home is how much equity you currently have in the property. If you’ve only been in your home for a couple of years, it may actually cost you money to sell.
Why? At the beginning of your mortgage, your monthly payment goes primarily to interest instead of principle. So even though you’re sending in your payment each month, it’s not knocking down the balance of your loan by much at all. As time goes on, your payment breakdown slowly starts to even out, then eventually tips the scale in the other direction — more money gets applied to principal than to interest.
So if you have to sell your home shortly after you buy it, you may not have much equity in it yet (especially if you qualified for a low down payment.) When it comes time to close on the sale of your home, you may end up paying out of pocket to cover some of the closing costs. Some experts suggest staying in your home 5 years or longer to gain positive home equity.
In some cases, it may be worth it to pay a little out of pocket to get into a better housing situation for you. But best case, you’ll want to have positive equity before you sell your home.
It’s a Seller’s Market
Housing market conditions are not something you have control over, but it’s still important to think about when planning to sell your home. If you’ve been thinking about selling, and it’s currently a seller’s market, that’s a pretty good sign it’s time to sell your home.
In a seller’s market, you can expect homes to sell quicker and for more money. Depending on the market conditions in your area, you may even see bidding wars and buyers offering higher amounts than asking prices. Selling your home in a seller’s market means more profit for you and less time waiting for the right offer to come through.
But do consider your next steps after you sell your home. In a seller’s market, competition is higher among buyers and available homes for sale can go quick. Be sure to work with an excellent Realtor you can trust so that you’re prepared to find your next perfect place with ease.
Your Housing Expenses Are Too High
If you’re struggling to make your mortgage payment each month, that’s a good sign it’s time to sell your home.
The rule of thumb is to keep your housing expenses below 25%-30% of your income. So if you bring home $5,000 a month, your total housing expenses (including mortgage payment, maintenance, HOA dues, etc.) should total $1,500 or less. This leaves plenty of money to go toward your other bills and expenses, and for your financial goals like paying off debt, saving for retirement, etc.
While budget percentages are helpful, only you can know the dollar amount that you’re comfortable spending on your home. If your home expenses are causing you stress, take that burden off your finances and look for a home with more affordable payments.
You’re Ready for a Location Change
Is a new lifestyle calling your name? Maybe you’re ready for a dramatic change, like moving from the beach to the mountains. Or you’re ready to trade the hustle and bustle of the city for some remote country land. These are pretty obvious signs it’s time to sell your home, but you may have more subtle thoughts too.
Maybe your neighborhood has gone through a lot of changes since you’ve moved in, like lots of new construction, or some large commercial properties have gone up around you. While new growth can be a great thing, if your area no longer serves your housing goals, it’s OK to look for somewhere new. You may also want to change locations to be closer to a job site and lower your daily commute, or to be closer to family. These are all great reasons to look for a home that serves you better in your current season of life.
Know the Signs It’s Time to Sell Your Home
It can be hard to know when to sell your home. There’s never a set or perfect time, but knowing the signs it’s time to sell can help. Whether you’re ready to upgrade or downsize, move to a new location, lower your housing expenses, take advantage of your home’s equity or the profits of a seller’s market, these can all be great reasons to sell your home now.
Ready to get started? Give our team at Quantum Real Estate a call. We serve the Roseville, Granite Bay, Rocklin, and greater Sacramento area. We’d love to help you sell your current home and get you into the next home of your dreams!