It’s no doubt every homeowner in the Eugene area looks for ways to make their lifestyle better. Move up in the world, provide for the family, enjoy what life has to offer. Whether there are financial influences, an understanding of market conditions or a desire for proximity to favorite amenities, selling a home and finding a new one might be the correct option for you. If that’s on your mind, then the question, “How do I know if I’m really ready to sell my home?” can come next. According to experts, here are some of the most important factors indicating that you’re ready to sell your home, AND some concepts to consider when you are:
Are You Planning to Sell Your House in Eugene, Oregon?
1. You’ve got enough equity.
Among all other factors, having enough equity is a very important one. For most of us homeowners, equity in our primary residence is our most valuable asset. With enough equity, you have the flexibility to consider a move, be it lateral and geographical – or into a more expensive property that has just what you want.
The more equity you have, the better. According to The Balance, home equity is “an asset that comes from a homeowner’s interest in a home.” In other words, it is the property’s market value minus any liens attached to it. If you bought a home for $300,000 and owe $200,000 on your loan, your home equity is $100,000. [i]
As the property’s market value increases or the loan balance is paid down, home equity increases.
So how to determine if your equity’s sufficient? One of the simplest ways to think about it is this: If you already have enough equity to pay off your current mortgage with enough left over to make a 20-percent down payment on a new home and cover out-of-pocket closing costs, then it’s about time to sell your home. [ii] To say that it’s “about time” is a bit simplistic, but what this does is allow you to make a large-enough down-payment on a new home in such a way that you won’t be required to pay mortgage insurance. A 20-percent down payment is a milestone commonly considered sufficient – helpful to buyers and well though-of by sellers in competitive situations.
2. You’ve outgrown your home or are ready to downsize.
If you’re blessed with circumstances such as expecting a child, family members moving out, or having to take care of aging parents, then you might find yourself hoping for a new home. Ask yourself the question, “Does our home still fit our basic needs?” For a couple expecting a child, will the home be a safe and comfortable environment for the newborn and parents? If you have kids moving out, do you think the extra space in your home will still be necessary? If taking care of aging parents, are the household conditions still elderly-friendly? If the answers to your best-fitting question are no, then your home no longer suits your needs and selling your home might be the best solution.
3. You understand the market and you know your market.
The housing market performance has always been unpredictable. However, the National Association of Realtors expected that existing homes would have a modest growth in 2018, which they did. At present, home sales are expected to grow around 7 percent, with a 5 percent increase in the median price. [iii] By paying attention to trends and reported statistics, you might find yourself understanding that it’s a good year to consider a transition into a larger or a smaller home. An experienced Realtor can also help you with this understanding of market conditions.
4. You are financially capable.
All the other factors previously mentioned are very important in considering whether you’re ready to sell your home or not. However, if you’re not financially capable or you don’t have the money to pay for unanticipated costs, you’re not ready to sell your home.
Sellers often assume that buyers are the only ones making the commitment. Although financial responsibility for sellers during the transaction may not be as large of that of buyers, there are still costs. Once you’ve decided to sell your property, make sure you have the ability to make certain payments along the way. Set aside an amount of money for any necessary repairs that may take place after inspections and negotiations.
You should also leave a lump sum for moving expenses and closing costs. Upon selling your home, prepare to pay a commission (typically 5 percent to 6 percent of the home’s sale price) to the real estate agent working for you. Your agent splits that commission with the buyer’s agent. Beyond commissions consider moving costs and other unexpected expenses. Some sources have suggested that you set aside about 10 percent of your home’s market cost to pay for all the costs involved in home-selling – commissions, moving and others – that could follow. [viii]
5. You’re ready to break emotional attachments.
When you’ve lived a part of or all of your life in your home, it’s likely that you’ve developed emotional attachments – and those are not always easy to break. Although it’s human nature to become attached to your home, one sign of being ready to sell is if you can stomach the change. If you’re truly ready, you’ll be able to rationalize and leave behind any nostalgic associations you have with your home.
If you can confirm with these important factors, it is a strong indication that you’re ready to sell your home.
Renting Exodus Meets Rising Values
Across the country, a huge number of renters are in search of a home to buy, given that rents are up and mortgage rates are down. However, the difficulty in finding homes for sale within their price-range remains.
According to CNBC, the shortage of low-priced or affordable homes continues. Homes priced $250,000 or less have decreased over time while the inventories of homes belonging to the million-dollar range are slightly increasing. [iv]
According to the data given by Trulia [v], homes with starter prices have increased in price by nearly 10 percent since the first quarter of 2017 to the first quarter of 2018. In addition, there has also been a decrease in the available inventory of starter homes over year, causing a 14.2 percent drop in sales. [vi]
The abundance of Home-Buyers in your Market
There are several factors that should be considered when determining the number of buyers that could be interested in purchasing your home. A number of sources have proven that more people buy homes during spring and summer seasons compared to fall and winter. Warm weather creates a curb-appeal for your home, which makes a great impression to potential buyers, making them want to view the home’s interior. [vii]
It’s important to monitor other homes in your area to understand how a certain number of potential buyers could be interested in your property. This is another job Realtors do well. Assess how much these homes cost and compare them to the amount you’re planning to sell your home for. You can decide whether to sell your home or not during that time depending on the data and information you’ve accumulated. Will we undercut the competition in order to go pending, as long as that price doesn’t leave much money on the table? Or will we price above the rest, knowing that our product is superior and will still garner attention? Again, your Realtor (call InEugene Real Estate) can be an excellent guide.
- [i] https://www.thebalance.com/what-is-home-equity-315663
- [ii] https://www.daveramsey.com/blog/ready-to-sell-your-home/
- [iii] https://www.daveramsey.com/blog/ready-to-sell-your-home/
- [iv] https://www.cnbc.com/2018/07/23/the-low-priced-home-shortage-continues-while-luxury-homes-are-hot.html
- [v] https://www.trulia.com/research/inventory-q118/
- [vi] https://www.thebalance.com/here-s-the-average-cost-of-a-starter-home-in-2018-4172916
- [vii] http://dreamcasa.org/real-estate-101/selling/how-do-you-know-if-youre-ready-to-sell-your-house/
- [viii] http://dreamcasa.org/real-estate-101/selling/how-do-you-know-if-youre-ready-to-sell-your-house/
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