While selling a home is a common life event (NAR reports that 5.34 million homes sold in 2018 alone) the decision to take the plunge and sell might not come so easily. How do you know if now is the right time?
Selling your home is a major decision and one that should not be taken lightly. According to Dave Ramsey, a trusted voice on money, budgeting and debt, some signs that you’re 100% ready to sell include:
- You’ve done a gut check and feel emotionally prepared to leave this home and the memories it holds behind, negotiate with buyers over it like a business deal, and hear critiques on what needs fixed.
- You’re equity positive, meaning you’re sure you won’t owe more than the home is worth.
- You’re in a financial position to buy a home that better suits your needs.
If the answers are yes then the real fun begins!
There are 3 questions you need to answer before you sell your home:
- What’s your home worth, anyway?
- How much money would you actually make if you sell?
- When should you list your home for sale?
How Much Will Your Home Sell For?
Sellers have a wide array of sources these days but how do you know for sure? Many look to on-line estimates on sites like Zillow for guidance but quickly discover that the values presented may not be accurate. While you no longer have to go to a real estate agent for every little bit of knowledge the real problem is, the estimates – or “Zestimates” as Zillow calls them – are not always correct. In fact, they can be wildly off, leaving the buyer or seller worse off than before they looked at them.
Zillow may do its best to give you an accurate price of what a home is worth. In the end, though, it is only an automated system that cannot think for itself. It cannot account for variations in any number of things – changes that substantially alter the price from any sort of “average.”
How does the best real estate agent in your neighborhood create a sales price? It’s not magic, but there’s a lot of experience and art involved in the process.
A good place to start is to consider the idea that there is no single list price. Different brokers, with different perspectives, may well suggest different values. The important issue for property owners is to understand why a broker suggests a particular price.
Brokers will make a listing presentation in which they give owners a Comparative Market Analysis or CMA. The CMA will outline the proposed sale price, the reason for it, and include a marketing plan explaining how the broker expects to sell the property.
How Do I Figure Out How Much Money I Will Make?
Net proceeds are how much money you’ll make after you’ve accounted for all the costs associated with selling your home. Simply put, your net proceeds are your home sale price minus the mortgage payoff amount, home sale prep costs and closing costs.
When Should you List Your Home for Sale?
Factors such as seasonality, economic conditions, mortgage rates and tax incentives are a few factors to consider. It’s also important to consider the state of your local housing market. Contacting your local real estate professional is the best place to obtain accurate and insightful information.