Why You Should and Shouldn’t Sell Your Home in 2022
Introduction
Analyze your financial status, including your equity in your property, your capacity to purchase a new home, and any closing fees, before deciding whether or not to sell your home. Additionally, you should know the regional housing market and how changing seasons may affect your objectives.
Here are some crucial inquiries to make if you’re considering selling your house:
1. How Much is My Home Worth?
Most real estate experts examine recently sold properties in your neighborhood that are comparable to yours to estimate the value of your property. “Comps” are a common term used to describe these comparable houses. You may obtain an idea of the price range that buyers may be willing to pay for your house by comparing the selling prices of several comparable properties.
You should take into account factors like the home’s square size, number of bedrooms and bathrooms, and any distinctive characteristics while looking for comparable properties. Since no two houses are exactly the same, you’ll need to modify each unique feature; it’s really difficult to accomplish this properly for each comp.
2. Do I Have Enough Equity to Sell my Home?
A general rule of thumb is that you should have enough equity in your house to cover your mortgage, the costs of selling, and the costs of relocating. Additionally, a lot of people hold off on selling until they have enough equity to use as a down payment on their next house.
Recent statistics from Bankrate show that most homeowners need an average of five years to accumulate enough equity in their property to cover the costs of purchasing, closing, and relocating.
3. How Much Will it Cost to Sell my Home?
Many individuals focus on the 5–6% that is normally paid in agent commissions when selling a house. However, the overall expenses associated with selling a house might be closer to 10% of the sale price. If you are unable to coordinate the sale of your current house with the purchase of your subsequent one, some of these additional expenditures include seller concessions, closing charges, repair costs, and housing overlap costs. Don’t forget the value of your time and sanity, either, of course.
4. How Long Will It Take to Sell my Home?
Consider your moving schedule and how it can affect your goals when deciding whether or not to sell. Financial consequences may result from a sale taking longer than anticipated. It may prevent you from pursuing a career opportunity, compel you to pay for temporary accommodation or storage, and, of course, selling a property requires upkeep.
5. Should I Make Repairs?
You must inform potential purchasers of any known problems with your house as a seller. Despite the fact that you are not compelled to make repairs, you will probably need to price your house according to the expenses of these repairs, or you may need to make a concession to the buyer so they may do the repairs themselves. For purchasers searching for a move-in-ready house, pricey repairs like replacing an HVAC unit or repairing a pool, for instance, might be a deal breaker.
Although it may be tempting to start expensive renovations before selling, not all improvements will add considerably to the value of your property.
6. How Should I Sell My Home?
There are several strategies for selling a house. If you want to know if you’re ready to sell, think about how much time, money, and effort you can devote to the process. Do you have the freedom to organize and show your home? If necessary, are you able to make adjustments and repairs? How long are you prepared to wait before accepting an offer, and how flexible are you with terms?
Working with a real estate professional if you’re selling conventionally offers help throughout the process. A real estate agent can also manage the sale’s paperwork, work with the buyer’s agent to sell the house, and promote it.
You Should Sell:
1. If High-Interest Rates Don’t Scare You
Mortgage interest rates are significantly higher than they have been recent as 2022 draws to a conclusion. That is sufficient for many homeowners to decide to remain in their present home. Others don’t give the interest rate as much thought.
Greater down payments are possible by higher equity at the moment of sale, which effectively lowers the monthly payment of a new mortgage.
2. If You’re OK Waiting for the Right Buyer
There is a lot of debate about buyer demand declining as affordability in the U.S. is strained by high property prices and high mortgage rates. The U.S. is still witnessing a strong housing price rise, though. The typical house selling price in August was $406,890, a 7.1% rise over August 2021.
The length of time a house remains on the market is one area where sellers will see a difference. A year ago, it was typical for a property to get numerous bids on the day it went on the market. Less offers are being made today, and the pace is slower. According to Redfin, the typical time a house spent on the market in August was 26 days, nine more days than in August 2021.
3. If You Need to Move
It’s still possible to sell your house and get a new one if you need to move for whatever reason. If you lost your work, you might be concerned about how you’ll be able to keep up with your mortgage payments. Selling can be a possibility in this situation. However, a large number of people are choosing a life shift that entails relocating to a different state, needing more space for a growing family, or needing a larger footprint for a permanent work-from-home area.
It is still feasible to sell your house for a profit and buy a new one, but the key is to be well-prepared and to have reasonable expectations.
Do NOT sell your house:
1. If You Just Bought or Refinanced
There is no reason to think about selling your house anytime soon if you are one of the numerous homeowners who have just relocated or refinanced. With its low monthly payments, your mortgage should have alleviated any financial hardships.
Many homeowners could lock in mortgage rates below 3% before 2022, making selling anytime soon much less appealing. Enjoy the low-interest rate you have locked in and continue to increase the value of your house till other circumstances make a relocation unavoidable.
Plan to stay put if your present mortgage is what you find most comfortable for a while, as mortgage interest rates aren’t expected to significantly decline in the upcoming few months.
2. If You’re Worried About Affording Your Next Purchase
Concerns regarding your ability to afford your future home purchase during the past couple of years have been linked to the property market’s rapidly increasing costs and the scarcity of newly built homes for sale. There seems to be no financial advantage to purchasing a new house while loan rates are over 6%. If you believe the timing isn’t right, don’t be scared to put off selling your house.
3. If You’re Worried About Finding Your Next Home
Even while the housing inventory is still low, the market is better balanced now than it was at the beginning of the year. Houses stay on the market a little longer now that prospective buyers have chosen to back off.
While it’s less likely that you’ll have to contend with multiple offers and bids significantly above the asking price when looking for a new home than it was in 2021, reports show that there were more than 18% fewer home sales in August 2022 than there were in August 2021, and this isn’t solely due to a decline in demand. You could have trouble finding the appropriate amount of bedrooms, ideal location, or general vibe you’re looking for because there are fewer properties on the market to pick from.
