Deciding when is the right time to sell your home can be confusing. Before putting your home on the market, there are many important questions to sort out, both financially and personally.
Rising home prices, buyer demand and rising interest rates are some of the factors to consider. But it’s important to ask yourself if you’re ready to move — and if you can find a home that fits your budget in another highly competitive market.
According to Fannie Mae’s most recent Home Buying Sentiment Index, 51 percent of consumers believe now is a good time to sell. Here are some key considerations to help you decide if it’s the right time for you.
Is it time to sell a house?
Most real estate experts say the short answer is yes – now is a good time to sell. There are a number of reasons why, including continued buyer demand and a lack of home inventory.
“You can get a really good price by taking advantage of high buyer demand,” says Dino Dinena, a Realtor with Southern Lifestyle Properties in Hilton Head, South Carolina. “In most places, prices are rising rapidly, and bidding wars have become a common occurrence.”
Rising mortgage interest is another reason why listing your home can be beneficial. The Federal Reserve has been working to curb inflation across the country by raising interest rates. As a result, interest rates on mortgages have also increased. The average rate on a 30-year fixed mortgage is now 5.36 percent, up significantly from a year ago, when rates were around 3.13 percent.
“Rates are rising rapidly and show no sign of stopping anytime soon,” Dinena said. “Rising prices may reach a tipping point where some buyers have to exit the market.” In other words, if you’re thinking of selling, it might be wise to do so before the price goes up.
When is a good time to sell?
Historically, spring and summer are usually the best times of the year to sell a home. But beyond seasonality, there are many factors that can make selling your home a wise decision. The reasons are usually based on financial calculations, living expenses and other factors, but there can be other reasons that make selling your home the right choice. These include:
|If the rates are low||Low interest rates bring more prospective buyers into the market, which is beneficial for sellers. The increased number of buyers for homes often leads to bidding wars and increases home prices, meaning you can sell your home for a solid profit.|
|If supply is short||A shortage of housing stock increases demand and prices for housing. Moreover, when housing supply is low, houses on the market sell quickly.|
|If you are ready to downsize||Rather than maintaining a large and expensive home, downsizing can be a more budget-friendly option. For older homeowners, even downsizing may be necessary. “If you can no longer control the levels or if there are more repairs than you can manage, it may be a good time to sell,” says Rick Albert, a Lamerica Real Estate broker in Los Angeles.|
|If you want to transfer||If you are moving to a new state for work or want to enjoy your retirement in a new environment and want to put the proceeds of the sale into your next place, selling is inevitable. “The time to sell is when you need to sell,” says Kathy Severance, a Realtor with Douglas Elliman in Palm Beach, Florida. “It’s a no-brainer to sell, especially in a hot seller’s market, if there’s anywhere to go.”|
When is the best time to wait?
Even in a favorable seller’s market, there may be reasons why it makes sense to withhold listing a home for sale. Here are some common reasons why prospective sellers hit the pause button:
|If the rates are increasing||Rising mortgage rates often mean fewer buyers, and a smaller pool of buyers who can afford the price they want. Selling a home isn’t free, so if you can’t raise your price, you may decide to wait.|
|If you are adding||The cost of buying a new, larger home can be prohibitive, especially in a hot market. Don’t go in over your head – take the time to make sure your finances can handle the type of home you want.|
|If you have recently refinanced||If you recently refinanced your mortgage, it may not make financial sense to sell yet. Factoring in closing costs and other fees as part of the remodeling process, you could actually lose money.|
|If your house is in poor condition||Got a long list of maintenance to complete around your home? You may want to postpone the sale until some work is done. It’s important to show your home in good light to get the most comfortable offer possible. “If the house is in disrepair or there’s an unfinished project, you’re less likely to get a good rate,” says Dinena.|
|If you have no game plan||If you are simply trying to capitalize on the market and have no plans for after your home is sold, it may be best to wait. “There’s no point in selling if you don’t know what your next game is,” says Albert. “Where are you going? Where is that money going to go? If you don’t have a plan, you shouldn’t be selling,” he said.|
Tips for selling your home
If you’ve weighed the pros and cons and decided to put your home on the market, here are some steps you can take to get the best deal possible.
- Find a good agent: The advice and guidance of a professional real estate agent can be invaluable, especially in a hot housing market. Take the time to research several candidates and ask friends or family members to recommend agents with whom they have had good experiences. “A Realtor can help you create a game plan to get your home organized and in top shape,” says RE/MAX Masters Realtor in Salt Lake City, Utah. “The right arrangement allows sellers to feel that their home has a strong representation.”
- If necessary, make major repairs. Do the necessary maintenance to help your home provide the best possible service. “Salespeople need to understand that they only have one chance to make a first impression,” says Horner. “Your Realtor can walk the property with you and make suggestions for preparing your home for the market.”
- Destroy the interior; You should also make an effort to clean and declutter your home, giving prospective buyers a clear view of the living space. “It’s always less,” Horner says. “The fewer objects in a room, the more the mood. Remove any personal items. Place the furniture so that the layout of the room flows and avoid unnecessary furniture.
- Add external appeal. Your home’s exterior is another part of making a good first impression, and it’s important to freshen up the curb appeal before buyers see it. That could include improving or improving landscaping and sidewalks, and a new coat of paint on the front door.
- Invest in home staging. Staging a home for sale, especially if it’s empty, helps prospective buyers think about how the rooms will be used and presents a more appealing and polished image. “A staging helps show the buyer how to improve the space,” says Horner.
With continued supply shortages and high buyer demand, now is a great time to sell your home. And with interest rates rising, it may be better to sell sooner — if rates rise too much, some prospective buyers may shy away from home purchases.
But carefully consider your reasons for selling. If you’re simply trying to time the market and don’t have a solid game plan for after your home sells, it might be wise to hold off for now.