If you are thinking about selling your house, here are the signs to look for to figure out if you are ready to put your house on the market:
- Positive Equity. Home ownership is an investment and positive equity is an important factor in determining if you should sell your house. While breaking even on a house is ok, but the goal is to make money on your home. With home prices on the rise, you might be surprised to discover how much equity you have. If your house is worth more than you owe on it, you could make a nice profit which you can put toward a new home. Figuring out how much equity you have is one of the first steps you should take before deciding to sell your home. Ideally you want to have enough equity to pay off your current mortgage with enough left over to put a 20% down payment on a new home.
- No Debt. If you are debt free you are in a good position to buy. Even better if you have cash in the bank. Now is a good time to take a hard look at your finances. If you have paid off all your nonmortgage debt and have three to six months of expenses in your emergency fund, that is a great sign that you are ready to move forward with your home search.
- Lifestyle. Take time to consider if you can afford a house that fits your lifestyle better than your current home. Maybe you need more space to accommodate your growing family. Or perhaps your kids have grown up and moved out and it’s time to downsize. If you are an empty nester, you can reap the benefit of selling while rates are low. Imagine the freedom you will feel when you sell your large home, pay cash for a smaller one and then invest the profit you make for your retirement. Just remember to make sure your mortgage fits your budget.
- Moving Expenses. Having enough cash to pay for your move is another sign that you are ready to buy a new home. Don’t get so excited at the prospect of moving that you forget to consider the cost of doing so. You will likely need to do some work on your current place to get it ready to sell which will cost a little, or a lot, depending on what needs to be done. Then there is the expense of the actual move. Whether you are hiring professional movers or simply renting a moving van, there will be costs involved. It will serve you well to save in advance for these expenses.
- Emotional Readiness. Even with all your finances in order, you need to be sure that you are emotionally ready to sell before putting that “For Sale” sign in your yard. Selling a house can be stressful, so you need to be prepared. Are you ready to put the work in to keep the house “show ready”? Can you handle potential buyers walking through your home? And is moving on from a place where you have created precious family memories something you are ready to do? If the answers to those questions are yes, then you just might be ready to sell!