Q: What are some of the signs that the time may be right to sell my current home?
A: Spring and summer are the two seasons in the United States when the majority of homes are bought and sold. Experts point to the prospect of better weather and the approaching end of the school year as motivators for both sellers and buyers. In Colorado we generally see a significant spike in home sales starting in April and continuing into early Fall.
There are many reasons people decide it’s time for a new home. Some of these have to do with changing lifestyle issues. A growing family, health problems, becoming an empty nester or simply no longer wanting to take care of a large home or yard can signal that the time is right to move on. Or, perhaps a new job or the need to change schools means moving to another community. You may sense that your current community is becoming run-down or no longer offers the amenities you once enjoyed. Friends, neighbors or family may have moved away and you are feeling more isolated.
Whatever the reason you decide to sell and look for a new home, you should make certain that the market is right financially. Over the last several years interest rates have remained at historically low levels and the inventory of homes available to purchase has also been quite low in most places in Colorado. Where rental rates are high or have been rising, the cost of owning a home becomes more attractive, bringing new buyers into the market. Rising prices over the last two years have many people thinking the time is right to sell.
The important thing is to sell your current home when you need to or want to. Real estate has proven to be one of the best long-term investments and so financial experts advise against “chasing the market” just to try and make money when your current home still meets your needs and is appreciating in value. Before you make the decision to move, consult a Realtor® with experience in your neighborhood and who understands your home’s value, how the market is currently performing and what your options might be for a new home in your ideal price range.
The next step towards selling your current home is to carefully assess your own financial status. Do you have the recommended three to six months of living expenses in an emergency fun to help with the transition? After paying off the loan on your current home, will you be left with enough equity to cover a 20 percent down payment on another property?
Many buyers now expect sellers to cover what are called “closing costs,” which include a variety of fees, reserves set aside for insurance and property taxes, an appraisal and other items and many lenders encourage sellers to cover these costs so as to make sure buyers are not overextending themselves with both the down payment and closing fees. These fees can run into the thousands of dollars, often coming out of the equity you’ve accumulated.
Your home may need to be spruced up in order to make it more attractive to buyers and bring a higher price. Do you have the funds available to upgrade, repair, replace, paint, landscape and otherwise prepare your home for sale?
Finally, moving is an expense in itself. There will be costs to pack up your belongings, hire a company to move at least your heaviest and largest of items, get your cars or recreational vehicles to their new home and transport the family.
With so many factors to consider, start by meeting with a Realtor® to learn more and to assess whether the time is right for you.
This article was provided by the Colorado Association of Realtors®. Additional information about buying and selling real estate is available at ColoradoRealtors.com.
By Saul Rosenthal, Colorado Association of Realtors®