Is Now Really The Best Time To Sell Your Home?

The time is now…

At least that’s what all of the realtors and experts are saying.

They’re all saying that there has never been a better time to sell your home. It’s not just real estate agents. Even publications like Forbes and economic experts are saying that it is a great time to sell your home.

It’s because the “market conditions” are so great for any homeowner that wants to sell their home. Here in Lansing, the current inventory is 1.49 months. Meaning, at the current rate homes are selling, all of them would be sold in 1.49 months. To give you context, a healthy, balanced inventory rate is usually around 6 months.

Home prices continue to escalate and sellers are getting top dollar for their houses within a week of being listed.

But here’s the deal. Market conditions — while important — are only a single factor to consider when thinking about selling. This is where expert advice can come in handy.

To really determine if it’s time to sell your home, you need to ask yourself these questions.

Do You Have Equity In Your Home?

From a financial perspective, you should only sell your home when you have enough equity in it. Meaning, your home is worth more than you owe on it.

But that’s not always the case…

While most homes have rebounded from the economic downturn of 2008-09, when most homeowners had negative equity, there are still homeowners who owe more on their home than it is worth.

Most financial experts will tell you that selling your home with negative equity is a big no no. And that you should only sell with negative equity if you need to avoid bankruptcy or foreclosure.

But you and I know that life is more than money.

I’ve worked with friends who understood that. They sold their home — even though they had negative equity — because they need a bigger space for their four kids. Sure, paying the extra expense sucks. Especially when everyone tells us it’s a bad idea.

But for this couple, it just made sense. They didn’t want to wait years until they had enough equity in the home.

It’s important to understand that they were in a financial position to be able to sell their house with negative equity and still have enough for a 10 percent down payment.

Make sure you seek expert advice before making the decision to sell with negative equity.

Want to figure out your own equity position? The math is pretty simple. Here’s how to do it:

Grab your latest mortgage statement and find your current mortgage balance. If you have any equity lines open, you will want to grab those too.

Then, total the amount you owe. Write that number down and hold on to it.

Next, you’ll need to find your home’s value. You’ll probably be tempted to use online valuation sites like your Zestimate, Realtor.com, or NerdWallet to determine the value.

These sites will give you a rough idea of how much your home is worth, but can be wrong by as much as 20 percent. Meaning, if your Zestimate gives you a value of $200,000. Then, the value range is anywhere from $180,000 to $220,000.

If you have a mortgage balance close to your Zestimate or estimated range, it’s tough to find out if you really have any equity in your home.

If you want an accurate picture of how much equity you have and the true value of your home, ask us to run a free, no obligation home value analysis for you. We look at similar homes that have sold near you, then adjust for differences to come up with a more reliable and accurate value for your home.

With these two numbers in hand, simply subtract your current mortgage balance from your home’s value. The difference gives you an idea of how much equity you have to work with.

If you get a negative number, you have negative equity, and it may not be a good idea to sell. If your number is positive, then you have equity in your home.

You might be wondering how much equity should you have?

The general best practice, from a financial perspective, is to have enough equity to pay off your current mortgage and then with what’s left over pay the costs associated with selling your home (assume 8 percent) and putting a 20 percent down payment on your next home.

But we rarely move on financial decisions. Most of us can’t wait until we have that kind of equity. Which brings me to the next question you need to ask yourself.

Does Your Home No Longer Fit Your Needs and Lifestyle?

Most of us move because our lifestyle changes and our home no longer fits our needs.

Maybe you’re getting ready to retire and the beautiful home filled with memories of raising your kids is now too much to keep up with and clean. Or maybe your starter home was perfect on your wallet, but began to chip away at your sanity as you added more kids to the home — which made it look like a toy story exploded in your home every evening.

Or your aging parents and your millennial children need to move in with you, suddenly your idea of being an empty-nest is put on hold and now you have to buy a bigger home to make room for mom and kids.

Either way, it might be time to sell your home if it no longer fits your lifestyle. You see, this is why I say that life is more than just being about money and numbers.

It’s impossible to boil down our decision to sell our home solely based on what the numbers say.

Can You Afford the Move?

There are many upfront costs to selling your home and buying a new one — from paying movers, to painting the home to be show-ready, to paying for repairs.

You will need a way to pay for all of these expenses upfront. For the homeowners that have a large amount of equity, you will potentially recoup the costs when you sell your home.

It will be tempting to pay for these costs with your credit card and then pay it off with some of the proceeds you get from the sale of your house.

But do this with care…

It’s possible that by putting more debt on your credit card, you could get denied for a loan even though you were pre-approved.

If you will need to use your credit card to pay for some of the moving expenses, talk with your lender when you go to apply for a loan. Ask them how much room you have and if it’s possible.

You will most likely want to have this cash in your bank account. If you don’t begin saving up the money before it’s time to move.

Do You Have a Real Estate Agent?

Your real estate market is unique — and so is your life.

For that reason, it’s a good idea to consult with a trustworthy real estate agent that can provide honest advice on what’s best for you and your situation.

A good real estate agent will put service above the sale. Meaning, they can help you decide — by letting you know about your real estate market, what it takes to sell a home, and your life situation — if selling makes sense for you.

There is a difference between a great real estate agent and an average one. A great real estate agent does more than just push paper, list your home, and pray that a buyer comes along. A good real estate agent has a marketing system they use to market your home. And they offer unbeatable guarantees, like sell your home in under 60 day or it’s free (something we offered before).

If you’re on the fence if selling is right for you, then let me help you make your decision a little bit easier by providing you with an accurate worth of your home’s value. You can find out how much equity you have and if selling might make sense.

There is no cost and no obligation to this. Even if you don’t plan to sell, it never hurts to know the value of your home. We also promise that this isn’t a sales pitch in disguise.