Should I Sell My House Now or Wait?
With home prices changing drastically seemingly every week, it’s easy to ask yourself should I sell my house now or wait for a better time?
Though it can be helpful to understand market trends, in short, there’s no universal sweet spot for identifying the right time to sell. Every individual has a unique set of reasons, time pressures, and hopes that will inform a final judgment call.
To help match up your dreams and decisions, we’ve compiled a toolbox of signs to look for and factors to consider when looking to sell a house.
Is Now the Right Time to Sell a House?
Before giving in to superstition, consider these three general factors when putting a property on the market:
- Supply-demand: The number of homebuyers searching versus how many homes are available on both a national and local level will have a significant effect on market pricing.
- Mortgage rates: Your mortgage rate is the percentage interest to be paid in addition to a principal loan given by a lender for a home purchase. Mortgage interest rates can anticipate buyer demand and how much profit you can expect to make on a home sale.
- Home equity: Home equity refers to how much of the home you actually own. As you continue to make mortgage payments on a property, your total equity increases.
There are also more particular, concrete metrics to consider.
- The local market – Also termed an isolated market. For example, if you have an inland house in a beach town that’s had frequent flooding issues, your buyer traffic might look different from that on the coast.
- The Housing Market Index (HMI)– If you’re selling a single-family home, HMI compiles data pulled from a sentimental survey of the National Association of Home Builders (NAHB), combining current sales, with prospect sales, and buyer traffic.
Reasons to Sell Right Away
You can’t wait. It’s time. You’ve started letting the neighbor keep the opened packages. When time is of the essence, a reason to sell can often fit in one of three categories:
- Relocation for urgent circumstances
- Relocation for time-sensitive endeavors
- Anticipated shifts in local market value
Other than spooky neighbors and unlucky pets, there are a variety of events that prompt homeowners to sell. Some owners need to relocate for new jobs or school systems, others might seek space for growing families, or new empty-nesters may look to downsize. On the flip side, some individuals own homes as investors, hoping to capitalize on future opportunities.
When considering your prospects, here are some signs that might point towards selling:
- New high appraisal
- Selling an inherited house or second home
- Low housing inventory
- Area demand is high
- Low mortgage rates
Assessing Market Flux
The free marketplace exists as a series of chain reactions, and the housing market doesn’t perform in a vacuum. In a time of changing natural landscapes, pandemics, and evolving work habits, new possibilities of living in once remote, unsustainable locations have proved attractive to many. In 2021 alone, about 6.1 million home selling transactions were completed, the highest recorded since 2006. To illustrate this market reaction, consider that overall housing prices increased by over 16.9% that same year.
Whether you’re joining the ever-growing nomadic workforce or looking to capitalize on a sudden influx of interest in your long-forgotten hideaway, paying attention to current market trends and particular buyer interests can help you better predict future outcomes. Especially if you’re considering entering the market as a renter after the sale, staying informed will be key to your long-term financial well-being.
Other logistical costs to consider when selling include:
- Moving fees
- Storage costs
- Realtor fees
You might consider consulting a financial advisor or an analyst who can help confirm trends tailored to your property type and needs.
Low Supply, High Demand
The real estate market is usually demand-driven. As a general rule, low supply and high demand is a recipe for a home seller’s paradise, termed a seller’s market. This ensures you’ll have good negotiating power regarding price, including closing costs. In selling, before profit, your first goal is likely to hit a price point that covers any outstanding mortgage, principal cost, and closing costs.
Similarly, interest rates serve as a temperature scale for prospective buyers. Low-interest rates are triply attractive. First, they drive demand. Second, lower interest rates ensure your own closing costs will be lower, increasing your possible profit. Thirdly, if you’re planning to turn around and become a new homeowner all over again, it’s a win-win.
The Investor vs. The Homeowner
This is a trick match-up. Homeowners are investors. Therefore when it comes to selling, you’ll want to think long-term if you have the bandwidth. A central question you might ask yourself is whether you plan to rent or buy a new home immediately after. If you’re selling a primary residence, consider what your market prospects might be as a buyer or renter and weigh your options.
When we purchase property, more often than not, we are also investing in our future livelihood. Though more true of single-family homes, the structures we invest in often become emblematic of our lifestyles and our locators. It’s certainly no small task to uproot and rebuild spatial connections elsewhere.
Those with multiple homes are likely to be less restricted by time when it comes to selling. Owning property perhaps as more of an asset interest, you’ll want to pay close attention to the market conditions to identify when it’s time to sell to increase your chances of getting multiple offers and starting a bidding war. Take note that homes of higher value will often linger on the market for much longer periods of time, considering that the pool of prospective buyers will likely be smaller.
When to Wait to Sell Your House
In some circumstances, selling is a certainty but not an urgent necessity. If you have the leisure to time your process accordingly, here are some reasons to consider delay:
- Flooded market
- Low area interest
- Unfinished renovation work
Homes most often appreciate in value. However, if you find out the city council plans to build a new town landfill on your neighbor’s empty lot, it might not be an ideal time to entice potential buyers. The opposite of a seller’s market is a buyer’s market, which means that the bulk of negotiating power is in the hands of prospective owners.
Like any skilled seller, you want to introduce your merchandise in peak condition. Considering the construction delays and labor shortages amidst the COVID-19 pandemic and its continued aftermath, it’s understandable that many renovation projects may still be short of completion. It might make sense to wait until renovations are complete before entering the market. This way, you’ll avoid any questions or structural skepticism that may deter potential buyers.
Equity and Appraisals
Current ownership can be a deciding factor in the decision to sell. You might consider holding out if the following applies to your home:
- Low equity
- Anticipated value increases
- Recently refinanced
If you have low equity in your home, you may consider holding off on selling. It might be worth waiting until you own more of the property to accrue higher profits in the sale.
An appraisal takes into account the unique set of features of a property and equates their convergence into a market value. Depending on the state of particular markets, this value can exist in constant flux. It might be helpful to ensure your home appraisal is up to date when deciding whether to place your property on the market. Everything from location, size, architectural design, and age can affect price points. It might be worth having an expert update your numbers before making the final call to sell.
Refinancing is also an option that allows you to renegotiate your mortgage terms. If you’ve just refinanced, it might not make sense to sell just yet. Remember, the more equity you have in your property, the higher the payoff when it comes time to part ways.
Sell Your House With a Sale-Leaseback
Perhaps you decide to stay in your place a bit longer, but are still intrigued by the benefits of selling now. When it comes to how to sell a house while living in it, a sale-leaseback can get you the cash from your home without moving out.
A sale-leaseback program provides you the flexibility to sell your home while remaining as a renter. Sell your home and convert your home’s equity to the cash you need. The best part about selling a house for cash? With some programs you can retain the option to repurchase the home at any point during your lease term. Otherwise, if you want to move, can place your home on the open real estate market.
If you’re still asking: should I sell my house now or wait? A sale-leaseback program can help you avoid moving fees and realtor contracts and put your payout towards reaching your goals. Talk to a financial advisor today to help you take the first steps.
Real Estate News. Why You Should and Shouldn’t Sell Your Home in 2022. https://realestate.usnews.com/real-estate/articles/why-you-should-sell-your-home
National Association of Home Builders. NAHB/Wells Fargo Housing Market Index (HMI). https://www.nahb.org/news-and-economics/housing-economics/indices/housing-market-index