Is This a Good Time to Sell a Home?

There is no such thing as an overall, one-size-fits-all “good time to sell”. There are a myriad of other factors to consider to determine if it’s a good time for YOU to sell. Do you have to move out of the area for your job or business? Then, regardless of what trend we are seeing in the market, it may be a good time for YOU to sell. Are you generally unhappy in the community you are currently living in? Then it may be a good time for YOU to sell. Do you own rental property but the income is falling far short of the related expenses and the business loss is not of value to you? Then it may be a good time for YOU to sell.

In general, however, you know it’s a good time to consider selling your home if your area is currently in a “seller’s market”.

What does “Seller’s Market” mean?

When you hear real estate professionals use the term “seller’s market” they are communicating that supply, (houses currently for sale), in a specific area is low while demand, (the amount of qualified buyers looking to purchase a home in that same area), is high. When there are a large number of buyers competing to purchase the same few homes, each buyer will try to “outbid” the other in hopes of “winning the bid”, or, being chosen as the buyer. When, for whatever reason, someone is set on moving to a certain area, but there are only a few homes for sale in that area, sellers know that they can set their price at the higher end of the spectrum because the buyer won’t have many choices. Once homes in an area start to sell at this new, higher price point, that becomes the current market value of the homes there. If buyer demand maintains and supply remains constricted, sellers will typically continue to list their homes at increasing price points, driving home prices higher and higher. What the buyers are willing to pay becomes what the value of the homes are and the trend will continue in this upward trajectory until buyers start to signal that the list prices are beyond what they are willing to pay. This is why it is called a “seller’s market”, because the seller has the opportunity to receive multiple, competitive offers at a high price point, often surpassing the price they listed the home.

Once a homeowner has determined that it is a good time for them to sell, these next questions should be considered:

  • Is the current market value of your home less than the amount you still owe on your home loan? This is called being “upside-down”. In this scenario, a homeowner will not be able to break even, much less profit, from the sale of their home. Since making a profit is typically a homeowner’s goal when selling their home, this may not be a good time for you to sell. If moving is an option for you, but not a necessity, it would probably be most beneficial for you to hold on to the property until you have gained sufficient equity and a sale would result in your desired profit line. You could also consider turning the property into a long or short-term rental if rental rates in your area will be sufficient enough to cover all of the expenses associated with the property and, hopefully, also bring in a profit.

QUICK TIP: Most online home value offers use computer-generated software to calculate your home’s current market value. This method can not take nuances into account when determining a home’s value. MOST real estate agents will provide you with a COMPLIMENTARY Comparative Market Analysis, or CMA. A CMA will provide you with homes similar to yours that have recently sold, are currently pending sale, and are currently actively listed for sale. The real estate agent will then use that information, along with their personal knowledge of the market trends in your area and any information you provide them about what brings value to your home to provide you with an estimate of the current market value. Remember to request a CMA from an agent that works specifically in your area as they’ll be the most knowledgeable about current trends.

  • If you were to sell your home, can you afford to purchase a new home or rent a new home in the current market? The downside to selling when the seller’s market is hot is that you are then transferred into the position of being the buyer in a seller’s market. This is especially true if you are looking to remain in the same region. So, you will need to consider what your next move is going to be and determine if a sale will ultimately assist you in achieving your financial goals or put you into a more strenuous situation of having the same type of property, but paying far more for it. Speak with a lender to determine, given your desired monthly budget, what your buying price point will be and then speak with a real estate agent to find out if that will be sufficient to purchase the type of home you would like to live in next. If you’re thinking of renting next, look into rental rates in the area you would move to. Depending on where you are looking to live, rental rates can often cost more per month than mortgage payments and, even worse, you would then be making payments toward something you have no financial hold in.

The only party that can answer the question: “Is This a Good Time To Sell?” is the homeowner themselves. You can use this information as a precursory to making your decision. It is always best to supply yourself with pertinent information so that you know that you are making an informed decision and doing all that you can to make the best decision for you and your real estate investment goals.

*I am not a licensed real estate agent. I have worked in the real estate industry in Southern California since 2014, working with a real estate agent as a specialist, assisting in the home buying and selling process. Please always seek the advice of a licensed professional in your local community.

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Born, raised, & educated in SoCal. Mother and wife. Life and spirituality contemplater. Writer and performer.

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Brandy M. Foote

Brandy M. Foote

Born, raised, & educated in SoCal. Mother and wife. Life and spirituality contemplater. Writer and performer.

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