Time to move on?
Selling your home is always a big undertaking, but if you're armed with the right strategies and a bit of finesse, you'll be out the door at the price you want. This guide will show you:
- When to put your home on the market to up your shot at a quick sale
- How to price your home fairly and effectively in order to attract buyers
- The entire process of selling a home, explained step-by-step in plain English
Should You Sell Your Home?
Selling your home is a big decision that you should make for only the right reasons.
Good Reasons to Sell Your Home
Circumstances may force you to sell your home, or you may have your own reasons for wanting to sell it.
Reasons that May Force You to Sell
- Financial difficulties: If you can no longer afford to pay your monthly home-related expenses, such as mortgage payments and utility bills, your only choice may be to move to a more affordable house.
- Relocation: You might need to sell if a new job requires you to move, if you're going to school in another state, or for some other reason. If you expect your relocation to be temporary, you might consider renting out your home while you're away rather than selling. That way you'll avoid the costs of selling and will have a home to return to when you need it.
Reasons That Justify Selling Your Home
- Trading up: In real estate, trading up refers to selling a house in order to buy another—one that's usually bigger and, in the seller's opinion, better. For instance, the new home might be in a more desirable area or have more modern features.
- Changing space needs: Moving into a new home is often the best way to accommodate changing space needs. Young people need more space when they decide to have children of their own, while older people might want less space after retirement or after their grown kids leave home.
- Realizing equity: Your home equity is the difference between the market value of the property and the amount of principal that you still owe on your mortgage. If you've built up substantial equity over time, selling is one way to realize, or receive the value of, that equity. Sellers often use the equity they receive for a down payment on another home.
- Emotional associations: People often consider selling their home after a divorce, a death in the family, or a crime in the home, such as a burglary.
- Changing neighborhood conditions: Unforeseen changes in a neighborhood, such as construction projects or a rise in crime, are valid reasons to sell.
Even if you do plan to sell for one of these reasons, you should do so only if you can afford the costs of selling your current home and of buying and maintaining a new one. For more on the costs involved in selling a home, see The Economics of Selling a Home.
Bad Reasons to Sell Your Home
If you're thinking of selling solely for one of the following reasons, you should probably not do it.
- Avoiding major repairs: Homeowners sometimes decide to sell to avoid paying for repairs they can't afford or don't want to make, such as replacing a roof. When you sell, you're legally required to disclose major issues concerning your home, which will lower the price you get for it. Failing to disclose major issues can lead to costly lawsuits. In short, never sell simply to avoid repair costs. If your home has existing repair issues, always disclose them to the prospective buyer.
- Playing the real estate market: Though it's fine to sell in order to realize the equity you've built up over time, it's generally not a good idea to sell solely because of a recent increase or decrease in local property values. If you sell into a recent rise in prices, you'll instantly become a buyer in that expensive market when you start shopping for another home. If you sell into a downturn, you'll likely regret your decision eventually: since 1968 (when reliable records of home prices were first kept), U.S. real estate prices have always increased in value over periods of five years or more.