3 Key Considerations Before Selling Your House
Statistics show that many homeowners change their abode at least once in their lifetime. Based on this data, there is a high likelihood that you will change your home and this means that you will have to put your current house on sale. Though selling a property is generally less complicated than buying one, it does not mean that all homeowners follow the right procedure and process when selling their houses.
When word on the grapevine leaks that you are seeking to put your property market on the market, you will suddenly become a VIP with too many people and entities seeking your attention. For starters, realtors will start calling and circling you like a pack of ravenous vultures. On selling your property, tax authorities like the IRS will also be at your back seeking a significant share of any profits of the profits that you made from the sale especially if you did not first contemplate on the tax loopholes you can exploit to keep as much money as possible from the property sale.
Below, the discussion will feature 3 key factors you should carefully consider before selling your property.
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1 – Why do you want to sell your property & is it really necessary?
Before listing your house, carefully evaluate the reasons why you need to sell the property to determine if they have any merit. For example, you may be seeking to move into a bigger abode with the latest bells and whistles like we all dream of. Though this is a great move, it may be a bad idea especially if you do not carefully consider the financial ramifications that will arise when you take such a step.
Sometimes, circumstances may force you to seek a new residence for example if you are taking up a new job. However, no matter the prevailing circumstances, you should carefully consider all the options at your disposal instead of simply taking the most obvious route – selling your house. Who says that you cannot lease a new property at the location where you are starting your new job instead of selling your home to purchase a new one?
2 – Will you be able to afford a new house on selling your current one?
If you are selling your home to buy a bigger and more expensive residence, you will be ‘trading up’ – in realtors jargon. If this is your plan, it is important to carefully evaluate whether your finances can sustain a trade up.
Note that no realtor or mortgage lender can honestly tell you whether the trade up you are planning to make is a financially prudent idea. Based on the down payment that you will need to put up to buy a new home as well as your current income, these professionals can give you an estimate on how much you will likely spend on buying the new home. However, they will not be able to help you understand how such a move will affect your finances and whether you will still be able to meet your other financial obligations.
Before listing your home with a view of buying a new one, it is crucial that you examine your finances to understand how much money you can sink into the new investment. Unless your income has ballooned significantly since you bought your last property, selling to buy may not be financially prudent. However, if you have already made up your mind, carefully consider how the monthly payments you will be making on the new home will impact your ability to save for your retirement.
3 – What is the current value of your property?
If you have already decided to list your house on the market, ensure that you fully understand exactly how much it is worth. You and the real estate agent overseeing the sale (if you have sought the services of one) should carefully evaluate the value of similar listed properties in your neighbourhood to get an average estimate of how much your property is worth.
When you are in a hurry to sell your property, you may be tempted to grossly overvalue your property in the hopes that a novice buyer will cough up the hefty sum you are asking for. The only problem is that most buyers today engage the services of a property valuation expert before parting with hard-earned cash. This means that you will most likely lack a buyer for your overpriced house. Should you shift gears and adjust the price of your home to what it is really worth, new buyers may be wary of purchasing it since the extended period without buyers may indicate that there is something wrong with your house. In the end, you are likely to end up selling your house for less than it is actually worth.