For years, making a killing in real estate was easy. All you had to do was to hold on to your home. People doubled, tripled, and quadrupled their money just by living in hot real estate investment locations around the country. We all know what happened next. A few lucky people cashed out just at the right time. As for the rest, especially now that there is recession in the land, we’re still dealing with the aftermath of their sorry stories. And many people are wondering: Did I miss the right time to sell? Here is a guide on knowing when it is the right time to sell your house.
HOT OR NOT
Whatever history tells us about this time period of recession, remember that a home is where you live. Its value in your asset mix is more than a number on a piece of paper. But you already know that. And, honestly, after a days of recently seeing homes being refurbished, tricked out, flipped, and traded up on different real estate publications, I can’t blame you for wondering whether you should have dumped your house at the peak and rented a place until everything cratered.
But while hindsight may be perfect, we don’t have a crystal ball. And with your home, it’s an all-or-nothing proposition. You can’t just take a portion of your profits — say, sell the third half-bathroom with the bad ’80s paintings and the seldom-used dining room and unfinished kitchen.
YOU CAN AFFORD TO MOVE
When you sell, there will be costs. You’ll probably have to pay real estate commission of around 5% of the sale price. Moving expenses can easily be very high these days, and your buyers may even negotiate so hard on some parts of the house you need to fix or didn’t fix properly. If you plan to buy your next home and apply for a loan or instalment payment, you’ll also need to have enough cash after you sell the house to make a down payment.If you’re short on funds and might have problems paying for some of these expenses, even after you sell your home, it might be better to wait and save up before you put it on the market. And you might also build equity as you pay down your loan.
YOU KNOW THERE ARE POTENTIAL HOMEBUYERS
You’ll want to list your home when buyers in your area are looking good and the damdn is high so you the seller can be “king”. In a recent five-year period, 39% of homes listed during dry season listings (January-March) were sold in record time and 15% sold above listed price, according to real estate brokerage firm Sell-Right Investment Limited. Better weather also can help your home appeal to more prospective buyers, as you’re more likely to enjoy lush landscapes with blossoming flowers and trees. Flooded environment can be a turnoff for a potential buyer. You’ll want to make sure your home looks its best and is priced competitively when you put up a “for sale” sign on it.
HOME-IMPROVEMENT PROJECTS ARE COMPLETE
You’ll want to wrap up any unfinished remodeling jobs before you put your home on the market. The investment can be worth your while. Smaller projects, including painting kitchen cabinets or upgrading a bathroom sink, sometimes come close to paying for themselves by increasing the value of your home, which can translate directly into a higher asking price when you sell.
As for larger projects, you probably don’t want to complete a full renovation before selling your home, because your tastes might not match a buyer’s style. But if you need to do major work to make your home functional, such as repairing the water system or replacing a roof, it might be better to focus on financing and completing those projects before listing your home for sale. Prospective buyers might not expect to have a completely new kitchen or bath, but they’ll want to know the home’s in good condition.
YOUR HOME NO LONGER MATCHES YOUR LIFE
Are you expecting a child — or other relative — to be a part of your family in the near future? You might need more space. Or, if you’re an empty-nester, you might decide your house is too big, requires too much upkeep and that you could benefit from downsizing. Maybe you’re satisfied with your property, but it’s in an inconvenient location and too far from friends and family.Whatever your situation, if your home and neighborhood no longer fit your needs, the time is probably right to sell and find a location that’s better for your lifestyle.
YOU DON’T HAVE TO SELL YOUR HOUSE FAST
If you’re a motivated seller — say, you have to relocate within two months — and the buyer finds out, he might offer you less for your home than it’s worth because he’d know you’re burdened to close the deal. But if you’re willing to wait for the best offer, you have an advantage. You might be able to sell your home for the highest possible price.