Have you been thinking about selling your home but are having trouble committing to listing it? That’s okay.
Deciding to sell your home is a huge decision, and it’s not likely to be an easy one. Even if the market conditions, your financial situation, and your family’s needs are all aligned and pointing in the direction of selling your home, committing to sell is tough.
So how do you know if you are ready? Here are some key signs that indicate you are ready to list your home for sale.
You Have Outgrown Your Home
Is your family growing? Is everyone on top of each other everywhere in the house? Or, have all the kids moved out and you suddenly find yourself with too much space? If so, that’s a pretty good sign it is time to put your house on the market so you can move into a home that better meets your needs for space.
You are Financially Ready to Sell
Being financially ready to sell your home will come down to two basic factors: equity and debt.
Do You Have Equity on Your Side?
The most important financial consideration is how much equity you have built up in your current home. The more equity you have, the more money you will profit from the sale to put toward the purchase of a new home.
Equity is the difference between what you owe on your mortgage and what your home is worth. How much equity you have isn’t terribly complicated to discern. First, check your last mortgage statement to see how much you owe. Then, either get the house appraised or have a real estate agent run a competitive market analysis to determine the value of the home. Finally, subtract the mortgage amount from the estimated value. That’s your equity.
You are not ready to sell if you owe more than the value of the home.
How Much Debt and Savings do You Have?
Your personal finances are the next big piece of the puzzle when determining your financial readiness to sell. If you are debt-free aside from your mortgage, and have enough money in your emergency fund for three to six months of expenses, then you are in a good financial position to sell.
What is Your Credit Score?
If you will need to finance the purchase of your next home, you need to make sure your credit history is accurate and your credit scores are as high as possible. A good score will help you secure a lower interest rate which will result in lower monthly payments. You can receive one free report annually from each of the three credit reporting agencies – Experian, Equifax, TransUnion – to keep an eye on your credit report.
You are Emotionally Ready to Sell
Aside from finances, the next big indicator you are ready to sell is your ability to detach emotionally from the home and cope with the emotional roller coaster of selling a home. If you can honestly answer “yes” to these questions, you just might be emotionally ready to sell:
- Are you willing to remove the personal effects in the home to stage it for a sale?
- Can you commit to the long haul of having a house on the market and constant showings and open houses?
- Are you ready to hear negative comments about the home without getting offended and defensive?
- Are you ready to leave behind the place where your families’ memories were built?
Selling your home is a big decision that shouldn’t be taken lightly. By taking a hard look at your financial and emotional readiness, as well as the changing needs of your family, you will be able to better determine if you are ready to sell your house.