Is it Worth Selling Your Home in this Market?
"Sure, I can sell my home for a lot but I get hit on the other side by how expensive it is to buy."
That is the most common comment that I receive from home owners while I am door knocking. That is an extremely great point. So is it worth selling? Like every real estate question..... the answer is.... it depends. It is very circumstantial. Let me highlight some cases where it would make sense and a couple where it would not.
The first you have to evaluate is where are you going to live when you sell. Are you selling to move up in the market and buy a bigger home? Are you planning on renting? Are you planning on moving out of state? Are you just selling for the money? Once you have decided why you are thinking of selling then you can decide if it is worth it.
Selling to buy a bigger home.
That is a common strategy people will use to eventually get into their dream home. They purchase a starter home and then as they pay down their loan and the home appreciates, they swing their equity into a bigger and better home. Should they do that in this market? In every market you are always in similar positions. If it is a buyer's market then you have a hard time selling your current home, you don't profit as much from it, but it is really easy to secure a new property. In a seller's market (like today's) you can sell your home easily for quite a bit more then you were asking but you have to buy an expensive upgrade that you'll need to have put an aggressive offer towards. So no matter the market, it will be a catch 22. The difference for today's market is that we have historically low mortgage rates. That makes a world of difference in the life of your loan and even with your monthly payments. So if you are thinking of moving up homes, I think that because of the rates, right now better than it typically is.
I wrote down some avenues or plans you can use to successfully upgrade homes in the current market circumstances. Click here to read more on that.
If you are just trying to take advantage of the low rates but don't really want to move up in homes. Talk to your lender about refinancing. You can secure that low rate for your home that you live in now. I would warn you that it does cost money to refinance (though typically you pull it from equity) so make sure if that is the route you choose to do, that you have plans to be in your home for a couple more years so that you can recoup the cost of your refi.
Are you planning on renting?
First off why would you? I understand there are life circumstances that may require this or you may need to liquidate your equity, but if you can; I suggest keeping your home. You're are just paying someone else's mortgage when you rent. If for whatever personal reason you need to or want to rent then there is no time like the present to sell your home. No brainer. It's a hot market with high demand. People are paying above the appraised value! If you are thinking of waiting to see how high the market could get, I would just say that is a risky game. We never know what may happen. ( Though all economic predictions are optimistic). Play with the market you have now and don't put a bet on how the market will be in the future.
Are you moving out of state?
Yes, sell your home. Unless you are planning on renting it out, sell it. You'll get top dollar. Not to mention that Utah is in need of homes to sell. You'll help the community and you'll pocket quite a bit of money. If homes just sit there they will cost you money rather than bring you money. (taxes and maintenance) So rent it out or sell it. (from a financial standpoint)
Selling it for the Money?
Yeah! Nothing wrong with that! You made an investment who knows how many years ago, now enjoy the profits. It is the best time to sell. The thing to remember is where are you going to live? How will secure your next home? If you don't have those answers... even though money is nice, it might not be the best idea to sell. My biggest worry is that people sell in this market to pocket their cash, they live with mom and dad, use all their equity on whatever, and then they are worse off then before they initially bought the home. It is a harder market for first time home buyers unless they have a chunk of change. So before you just sell for the money, take a look at your long term plans and make choices accordingly.
I feel I hit the main points people talk to me about. Thank you so much for reading! If you know anyone who would benefit from this, please forward it to them. If you want a list for how to sell your home click here.
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Seriously, thank you so much for your time!