Timing is everything for the best chances of success when selling your home. While there are some objective, good fiscal reasons to sell, there are also subjective personal reasons that can be equally as important. Here are some factors you should consider before listing your home.
Seasonally speaking, the spring market is the most popular time to buy and sell.
While May has been touted historically as the best month to sell, in recent years homes listed in March have sold the fastest.
Why sell in spring?
- Homebuyers tend to taper off during winter months. Cold weather, holiday obligations, kids in school – for all of these reasons and more, fewer people are actively looking for homes to purchase.
- And then comes the turn-around: cabin fever and spring fever stimulate home shopping. The warmer weather with longer days brings people out of winter’s hibernation.
- A seller’s energy level tends to rise in the spring. Spring cleaning is a great time to take it up a notch and get your house ready to be put on the market.
- Spring’s lush landscaping boosts curb appeal. Blue skies and blooming flowers make for fabulous real estate photos!
- Tax refunds give prospective buyers an added boost of consumer confidence.
Although not as popular as spring, summer is also a popular time to sell. Families with school age children often feel a sense of urgency to move before summer break is over. They also want their children to be settled into a school district since changing schools during the academic year can be disruptive.
During a seller’s market
When there are more potential home buyers than properties available, you are more likely to sell your home fast and may even receive multiple offers resulting in a full- or above-price sale. How can you tell if it’s a seller’s market? If houses aren’t sitting on the market for long (typically less than three to six months) and they are selling for over asking price, it’s probably a great time to sell.
When interest rates are low
A drop in mortgage rates stimulate home sales. For the last few years, rates have been historically low. Buyers feel more confident as their budget can stretch to get a better house.
Personally or professionally, it makes sense.
Maybe you’ve accepted a new job that makes your current commute unbearable or impossible. Or maybe your current job is now allowing you to work remotely which geographically opens up your location options.
Perhaps you are looking for a change of scenery – from the city to the country or vice versa – or want to move to a different school district.
Have you increased your family size and outgrown your current house? Conversely, are you looking to downsize?
Other personal reasons people consider selling include death (of a spouse), divorce or desperation. If one of these circumstances makes the burden of your home – or mortgage payments – too great, it’s probably time to sell.
Has your home gained substantial equity that you’d like to use toward a downpayment on your dream home? Or is it time for retirement and your equity could bring you a nice addition to your retirement account?
What are some reasons you might want to delay putting your house on the market?
- You recently purchased your home. Technically, you could sell your home the day you purchase it, but typically that doesn’t make good financial sense. Maybe you have buyer’s remorse or have an unexpected job situation and must sell. Keep in mind that you will have costs associated with selling (and subsequently moving and buying another house). And if you’re selling your house after less than a year owning it and you happen to make money on the sale, you may have to pay capital gains taxes on the profit. According to IRS guidelines, selling a house within one year of purchase makes you liable for short-term capital gains taxes. Talk to an experienced real estate agent and knowledgeable loan officer to understand your options.
- You want to buy a fixer-upper. If you have your eye on a charming old house that needs some TLC, you might want to explore the option of buying, fixing and THEN selling the house you are currently living in.
- Your house needs many updates and repairs which will be reflected in a selling price that doesn’t work for you. Your house is far more likely to appeal to buyers if it doesn’t look like too much work. Talk to an experienced real estate agent to prioritize what improvements will be reflected positively in prospective offers.
- You don’t have enough equity to make a sale worth it. If you owe more than your home is worth, you might want to wait until you’ve built up more equity. If you are “underwater” (have negative equity), you’ll probably need to have cash at the closing table to bridge the difference. In this case, it probably makes financial sense for you to wait for your home to appreciate before you sell.
- You have recently refinanced your loan. Again, you may not have enough equity to make a sale worth it. Equity = market price minus the balance of your loan. Talk to a real estate agent to find out the market value of your home.
- You’re in a buyer’s market. How can you tell if it’s a buyer’s market? If homes are sitting on the market for more than six months and are selling for under asking price, you’re in a buyer’s market and it will probably financially benefit you to wait until the market speeds up before selling.
- You just aren’t emotionally ready to sell. Selling your home takes a lot of energy. If nostalgia or the stress of getting a home ready to put on the market and then moving your household is going to take you over the edge, you might want to hit the “pause” button and mentally regroup.
If you’re interested in selling or buying a home, reach out to one of our agents.