How to Know If It’s Time to Sell Your House?

There’s a reason television shows that debate whether to stay in your current home or list it and move are so popular. It’s a tough decision that brings with it a variety of emotions and the potential for drama that audiences enjoy watching. But now, maybe you’re living the TV drama and realizing just how difficult a decision it is. Should you love your home despite its annoying little quirks, or should you sell it and find a house that better fits your needs?

Determine How Much Equity You Have in Your Home

First, take emotion out of the equation and look at the facts. Have you lived in the house long enough that you’ve acquired sufficient equity to justify selling? Ideally, you should have lived in your current home for at least three years. While it isn’t required that you have equity to sell your house, you could be required to pay the remaining balance on your mortgage and the closing costs if the price you get for your house doesn’t cover the entire amount. In this situation, you’d end up owing money, which isn’t ideal, especially if you want to buy another house.

To determine the equity, you have in your home, take the amount your house is currently worth and subtract the balance of your mortgage. Let’s say your house is worth $300,000, and your mortgage balance is $250,000. That means you have $50,000 in equity. If you’re not sure what your house is worth, look at similar houses in your area that have sold recently. Make sure you’re comparing apples to apples — the houses you look at should be similar in age, square footage, number of bedrooms/bathrooms, and location.

If you’re still not sure how much your home is worth, contact a real estate agent in your area and ask them to review the comps (comparable sales) with you. Agents have access to the MLS (Multiple Listing Service) and can give you the most up-to-date, accurate information available.

Review Your Finances

Not only do you need equity in your home, but you’ll also need cash on hand. You’ll need money for home repairs, staging the house, closing costs, real estate commissions, and buyer concessions. Make sure you can afford to buy a new home, especially if you’re in a seller’s market. Will your mortgage be higher, and if so, will the new amount fit within your budget?

How Is the Current Real Estate Market?

Before listing your house, you’ll want to examine your local real estate market. Are you in a buyer’s or a seller’s market? If you’re not sure, look at the houses for sale in your area. If you see a lot of houses for sale, you might be in a buyer’s market. On the other hand, if you see only a few houses for sale in your area, you might be in a seller’s market. You’ll likely get more for your house if you’re in a seller’s market, and you might even benefit from a bidding war. However, keep in mind that if you are planning to buy in the same market, you could struggle to find an affordable new home.

Does Your House Still Work for You?

Finally, think about why you want to sell. What bothers you about your home that you’re considering selling? Does the space no longer work for you? If your family has grown or become smaller recently, perhaps the house is suddenly too small or too big.

Does the location still work? Maybe you purchased your house because it was close to work, but now you work from home or you’ve changed jobs. Or maybe you bought the house without considering the school district, but now you have children and would rather be in a different district.

Things that can’t be altered, such as the overall square footage or location, are good reasons to sell. But before reaching out to an agent to put your house on the market, make sure you can’t make the space work. Once you have an offer on the house and you accept that offer, it’s very difficult to change your mind. When considering whether to list your house, ask yourself the following questions:

Am I using all the space I currently have, or are there unused or underused spaces?
Could I repurpose current spaces to make them more functional?
Could I add on square footage?
Could a renovation change how I feel about my home?
Am I able to handle a renovation right now (both financially and personally)?
Is my home worth the investment of a renovation? (Look at resale value vs. the cost of the potential renovation.)

If you need more help deciding, make a list of the pros and cons for selling vs. staying put. An answer will reveal itself as you write it out. If you decide selling is the best option, your next step is to find an agent. When looking for an agent to sell your house, ask plenty of questions. Make sure you understand how they determine the list price (this should include a comparative market analysis). Ask if they are a dual agent, as well. This means they represent you as well as the buyer. Ask about their marketing techniques and find out how much they typically spend on marketing. Inquire about their experience in the local market and how long they’ve been working in your area.