Dave Ramsey Said There Are 7 Signs You Should Sell Your Home. Here's What They Are

If you're deciding whether to sell your home, you have a lot to think about. It's obviously an irrevocable decision, and you'll need to make certain it makes financial sense for you before you list the property.

If you aren't sure if it's the right time in your life to sell or not, you may want to look out for these seven signs identified by financial expert Dave Ramsey that suggest when it may be a good time to list your property.

1. You have plenty of home equity

First and foremost, Ramsey said you must make sure you have enough equity in your home to make selling a smart move. Equity is how much of your house you own after subtracting the amount you owe on your mortgage. If you owe $250,000 on a house worth $300,000, you have $50,000 in equity.

Ramsey said to make sure you have enough equity to repay your mortgage and put down money on a new home, at a minimum. Ideally, it's best to ensure your equity will cover closing costs and moving costs, too.

This is absolutely correct. If you are underwater on your house or owe more than it's worth, you really can't sell it unless you want to damage your credit with a short sale or pay off the difference out of pocket. And if you don't have money for a down payment on a new house, you're going to be in trouble when it comes to getting a new mortgage.

2. Your financial situation will improve with a sale

Ramsey said you shouldn't sell your house if doing so would hurt your finances and, ideally, should sell only if it will help.

"For lots of folks, improving their financial situation is the entire reason they sell their house," Ramsey said. "A popular way to make that happen is downsizing." If you can downsize to a smaller, cheaper house, you could pocket the extra equity and use it for other financial goals.

Of course, there are plenty of circumstances where you may want to sell and not downsize. If you've expanded your family, you may need a bigger house -- and as long as you can afford the new monthly payments, there's nothing wrong with going larger if you need to.

3. You've found a new home

Ramsey suggested not selling until you've figured out where you're going next. This doesn't mean buying a new house before selling, though, as you could have a hard time getting a mortgage and could get stuck with two mortgage payments.

It's important to have some idea of how much purchasing or renting a new place is going to cost, though. If you sell and then find out a new home is going to cost a lot more than you anticipate, you may not be able to afford it and may really regret it. This is especially true if you have a mortgage loan at a very low rate right now, since mortgage rates have been trending higher than they have in a long while.

4. You can afford to cover moving costs

Moving is expensive; even handling it yourself can do a number on your bank account since you'll still have to pay for a rental truck, gas, and moving boxes. That's why Ramsey is right to say you should make certain you can afford moving costs prior to putting your house on the market.

Ideally, you'll make enough of a profit on the sale to pay for this big expense. But if that doesn't happen, you should make sure you have the cash set aside. You don't want to be forced to borrow for moving day -- especially as taking out a new loan prior to closing on a new mortgage could affect your debt-to-income ratio and thus your loan approval.

5. You're prepared to deal with the emotions involved

Ramsey also advised you should consider the emotional impact of selling. This includes not just saying goodbye to your house but also doing things like keeping the house showing-ready, negotiating with buyers on the price, and putting in any work needed to prepare for a sale.

Of course, this can be important -- but, the reality is, if your home has become unaffordable or if you need to move for other reasons like job opportunities, you may have to put your emotions aside and make the best financial move.

6. It's a good time to sell based on the real estate market

Considering the state of the housing market is also important, according to Ramsey. After all, you don't necessarily want to sell during a buyer's market.

However, while you may want to get top dollar for your house, you can't predict how the market will trend and you can't necessarily wait forever for prices to rise. You should also remember that if you're selling during a seller's market when prices are high, your new home is likely going to cost you more to buy -- and vice versa for selling during a buyer's market. You'll get less for your home, but potentially also pay less for your new one.

7. You've got a real estate agent you can count on

Finally, Ramsey said to have a great real estate agent before you sell. This is important for some people who need professional help. But if you feel confident selling your house yourself -- and saving the commission -- this may not matter as much to you.

Ultimately, you should take the time to consider each of these signs to see which apply to you and which should impact your choice about whether to list your home or wait a while. By giving the decision the thought it deserves, you can make the right choice for your finances and your future.