Deciding Whether to Sell Your House? Dave Ramsey Said Not to Act Based on This Factor Alone

If you're thinking about whether or not to sell your home, you need to understand the impact your choice will have on your housing options and your bank account balance.

You may be tempted to focus on the state of the housing market as you make the choice about whether it's a favorable time to list your property. But, finance expert Dave Ramsey warns not to put too much emphasis on this one issue.  

Why Ramsey doesn't want you to focus too much on the state of the real estate market

According to Ramsey, putting too much emphasis on the state of the housing market isn't the best approach when deciding whether to sell your property because there's something more important to focus on. 

"You should never decide to sell your house (or not sell) based on the state of the housing market alone," he warned. "Market conditions are only part of the picture -- and they're not even the most important. Your personal situation needs to take center stage. The best time to sell a house is when the market and your individual situation line up."

In other words, Ramsey doesn't want you to be swayed by external factors like whether home prices are up or down. You should first look at your own unique financial circumstances, and only if you are in a good situation to list your house, should you then consider whether you're likely to get a favorable offer in the current market.

To consider your financial circumstances, Ramsey suggests making sure you have sufficient equity in your home to pay your current mortgage in full and make a 20% down payment on your next house. He also said to make sure you can afford the move, have a new place to live, and that your overall financial situation will be improved by moving.  

Is Ramsey right?

Ramsey is right that your personal finances matter more than the state of the market. If your home has gone up in value but so have other houses you'd want to move into, then selling it wouldn't do you any good if it would cost you more to buy your new place than you could afford. This is especially true if you don't have much equity in your current home and wouldn't be able to sell for enough to pay a down payment.

The reality is, you can't predict what's going to happen to housing prices in the future. While you may think now is not a great time to sell because mortgage rates are high and demand has slowed a bit in some markets, the housing market could get worse in the coming years and you may get less money for your home if you wait.

Since you can't know what's going to happen, you can try to look at the current state of the market to inform your choice, but you should focus on the knowable factors first. If you are in a good position to sell for enough to finance your next move after paying off your mortgage loan, and you have your other ducks in a row that Ramsey describes, then you can go ahead and list your property if you want. Otherwise, holding out is a better bet.