Is Now the Right Time to Sell Your Home? Ask These 3 Questions to Find Out
by Maurie Backman | Updated July 19, 2021 - First published on May 16, 2021
On the fence about selling? Here's how to make the right decision.
Recently, I was going about my business when I got a random knock on my door. A real estate agent was standing on my front porch. She explained that she had a client who was desperate to move to my area and would be willing to pay a very nice sum of money for my house.
I'll admit, I was tempted -- but only for about half a minute. While the idea of getting a nice payout for my house was appealing, I realized that if I agreed to sell, I'd have no place to live. And given that home values have soared across the country, I figured that what I'd gain in the sale of my house, I'd overpay for in a new one. And, also, I don't want to move. I get grumpy putting laundry into drawers -- I don't even want to imagine having to pack up my entire house.
But just because now's not the right time for me to sell my home doesn't mean it's the wrong time for you. If you're thinking of putting your home on the market, run through these questions to see if it's a good idea or not.
1. Can you afford another home?
One thing that really stopped me from selling my home in today's market is knowing how difficult it would be to find another one. Housing inventory is extremely limited in many parts of the country at the moment, my neck of the woods included. And home prices, as mentioned earlier, are ridiculously inflated. If you sell your home, you'll need to make sure you can swing buying another one.
Of course, you may be looking to downsize your home, in which case selling at a high right now could make sense. Even if you have to overpay a bit for a smaller home, there's a good chance you'll still walk away with a profit if your home sells for top dollar. But barring that, anyone who sells and buys simultaneously right now risks falling into the trap of not being able to comfortably afford a replacement home. You'll need to do some research to see what's feasible for you.
2. Can you manage the upheaval?
You've probably noticed that there's a pandemic raging, and that life has been anything but normal over the past 13 months. Selling your home means having to pack your belongings, move into a new place, and adjust to your new surroundings. Maybe you're up to that challenge. But if you're still reeling from the oddness of life right now, then you may not want to add to your stress by uprooting yourself.
3. Are you in a good position to get a new mortgage?
Maybe you're convinced your home will sell for a high enough price that you'll be left with plenty of money for a down payment on a replacement home. But that doesn't mean you're guaranteed to get a mortgage. If your credit score isn't great or you have too much existing debt, you may be denied a loan, even if you can bring a sizable down payment to the table.
Before you move forward with a listing, you may need to take some steps to clean up your finances. It's also a good idea to try to get pre-approved for a mortgage before locking yourself into a sale contract.
You may be tempted to sell your home right now. I know I was, for that brief moment when a real estate agent practically begged me to. But selling a home isn't something you can do without a game plan, so before you make that decision, be sure it's the right one for you.
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