No homeowner wants to be forced into a sale, but it does happen. People get transferred, relocate to a work for another company, or lose their jobs entirely. Couples split up and sell the house as part of the settlement. Growing families often dictate new housing choices, such as moving from a two-bedroom condominium in the city to a single-family home in the suburbs.
Deciding to sell your home can be an emotionally wrenching experience, and if you’re not careful, a financially devastating one. If you have a choice in the decision, examine all your options before you jump into the market.
Table of Contents:
Reasons to Sell
Some common reasons to sell your home include:
1. A job change
If you take a job in a new city, you may have to sell in order to purchase another home. You may also cut the ties to your current home if the new city is far too distant to justify the commute. If your new job is in another part of the same city, moving might save commute time, gas, and wear and tear on your car.
For military personnel, when you receive orders to report to a new location, you may need to sell and start anew in a distant city or state.
2. Space requirements
If the size of your household is changing, your need for space also will change. When you need less space, selling is a practical option. But if you need more space, you can also consider building an addition.
- If remodeling is impractical or too expensive, selling may be your best option. If the lot does not allow for the renovations you need, it might be better to find a home with the options and space you require. If the house does not lend itself to the type of remodeling you have in mind at a reasonable price, you may be happier to look for a home that can offer the style and space you desire.
- When considering a remodel project and getting quotes from several reputable companies, you may find that, if the project would be completed, the house would be priced far beyond others in the nearby area. This is fine if you intend to stay long-term, but if selling is on the horizon in the not-so-distant future, it may be difficult to sell because of the higher price tag and apparent overpricing for the neighborhood.
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3. A change in marital status
If you are getting divorced, you may need to sell your home as part of a settlement. Consult a lawyer or accountant and examine your options. If you are a recent widow or widower, you may decide to sell your home in favor of a property or apartment with less upkeep. You may also decide to move closer to other family members or places you frequent the most.
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If you have created substantial equity, selling your home may be a way of cashing in on your investment, especially if you would prefer to move to a less expensive area. In some cases, you may be an owner who enjoys buying homes to fix up and sell at an advantage. Once you have put in some considerable sweat equity, you can sell at a handsome profit, and do it again.
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5. Great timing
If the housing market is hot, and you plan to move to a less expensive area, you may make money on your sale even if you’ve lived in your home only a short time. When homeowners are flexible, this can be a great strategy.
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Reasons to Stay
Some examples of reasons to stay in your current home are:
I. Tight finances
If you’re barely able to make your current mortgage payment, you may be overwhelmed by relocation and commission costs (plus the possible increase in your monthly loan payment), even if you make a profit on your current home. Consider refinancing your current home instead of selling. Find a recommended mortgage broker to help you find the best options for a reasonable mortgage payment plan.
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II. An unsure destination
If you don’t know where you want to move, think about staying for the time being. You’ll build equity by continuing to pay your current mortgage. You’ll also avoid the cost of moving twice—once when you have to vacate your current home and again when you decide where you want to live.
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III. The remodeling option
The neighborhood is homey, the schools good, but you just don’t like your house? Consider making it more appealing. If you have owned the home for several years, you may have enough equity to do some serious remodeling.
Or, you can pay as you go by managing projects in phases, starting with the most pressing remodel project. Make your list and prioritize according to what would make life easier for you and which changes would minimize your dissatisfaction with the house more quickly.
- If you are a Do-It-Yourselfer, costs can be greatly minimized by doing most of the work yourself. Even with complex projects, you could contract someone to do licensed work such as electrical or plumbing, while you do the sanding, painting and staining.
- You may be deciding to add a mother-in-law apartment or a home office which can give good reason for a building project if you love your location, neighbors and the house itself. Or, you may want that gourmet kitchen you’ve been dreaming of which can add enjoyment and value to the home.
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IV. Bad timing
If the housing market is weak, you may lose a large percentage of what you’ve paid into your home. The real estate market is cyclical, and it could be better to wait until conditions are in your favor.
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The Seller’s Frame of Mind
Once you decide to sell, your first step is to emotionally detach yourself from the house and treat it as a commodity. This means facing the pricing issues head-on. Get a comparative market analysis and examine your home’s assets compared to other homes recently sold in your area.
Buyers tend to judge properties in terms of available living space. You may find that you need to lower your price because your basement, unlike your neighbor’s, is unfinished. Or, your price may need to reflect the age and condition of the appliances and mechanical equipment.
On the other hand, if your home has a beautifully tended landscape and the other homes do not, you may be able to justify your price. This is also the case if you have completed significant renovations, such as replacing all the windows and patio doors.
Overall, I hope you find this article helpful. If you do, please share it with others so they can learn from it, too. Thanks!
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