July 8, 2022
Deciding whether it’s the right time to sell your home can be perplexing. There are numerous important questions to sort through, both financial and personal, before putting your home on the market.
Rising home prices, buyer demand and interest rate increases are just some of the factors to bear in mind. But it’s also important to ask yourself whether you’re ready to move — and if you’ll be able to find another home that fits your budget in a highly competitive market.
According to Fannie Mae’s most recent Home Purchase Sentiment Index, about 51 percent of consumers believe that now is a good time to sell. Here are some key considerations to help decide whether it’s the right time for you.
Is now the time to sell a house?
Most real estate professionals say the short answer is yes — now is a good time to sell. There are several reasons why, including continued buyer demand and a shortage of housing inventory.
“You can get a very good price by leveraging high buyer demand,” says Dino DiNenna, a Realtor with Southern Lifestyle Properties in Hilton Head, South Carolina. “The prices in most places are rising rapidly, and bidding wars have also become a common phenomenon.”
Rising mortgage interest rates are another reason why listing your home now may be beneficial. The Federal Reserve has been working to curb inflation across the country by raising interest rates. As a result, the interest rates on mortgages have also spiked. The average rate on a 30-year fixed mortgage is now 5.36 percent, which is significantly higher than one year ago, when rates were about 3.13 percent.
“The rates are rising at a fast pace and show no sign of stopping anytime soon,” says DiNenna. “Rising rates can reach an inflection point where some buyers would have to drop out of the market.” In other words, if you’re thinking of selling, it might be smart to do it before the rates rise any higher.
When is a good time to sell?
Historically, spring and summer are usually the best times of year to sell a house. But beyond seasonality, there are many factors that might make selling your home a wise decision. Often the reasons are based on financial calculations, cost of living expenses and other considerations, but there may also be other factors that make selling your home the right choice. These include:
|If rates are low||Low interest rates entice more prospective buyers to enter the market, which is advantageous for sellers. An increased number of buyers shopping for homes often leads to bidding wars and drives up home prices, meaning you can likely sell your home for a solid profit.|
|If supply is short||A shortage of housing inventory also drives up demand and prices for available homes. What’s more, when housing supply is low, homes on the market tend to sell much faster.|
|If you’re ready to downsize||Downsizing may be a more budget-friendly choice than maintaining a larger, costlier home. For older homeowners, downsizing may even be a necessity. “If you can’t handle the stairs anymore, or if there are more repairs than you can manage, it may be a good time to sell,” says Rick Albert, a broker with Lamerica Real Estate in Los Angeles.|
|If you need to relocate||If you’re relocating to a new state for a job or want to enjoy your retirement in a new area, and you need the profits from the sale to put toward your next place, selling is unavoidable. “The time to sell is when you need to sell,” says Katie Severance, a Realtor with Douglas Elliman in Palm Beach, Florida. “It’s a no-brainer to sell if you have somewhere to go, especially in a hot seller’s market.”|
When is a good time to wait?
Even amid a favorable seller’s market, there may be reasons why it makes sense to hold off on listing a home for sale. Here are some common factors that might make prospective sellers hit the pause button:
|If rates are rising||Rising mortgage rates often mean fewer buyers, and a smaller pool of buyers who can afford to offer the price you want. Selling a home isn’t free, so if you can’t maximize your price, you might decide to wait.|
|If you’re upsizing||The cost to purchase a new, bigger home may be unaffordable in a particularly hot market. Don’t get in over your head — take the time to be sure your finances can actually accommodate the type of home you want.|
|If you’ve recently refinanced||If you recently refinanced your mortgage, it may not make financial sense to sell just yet. You may actually lose money by doing so, when considering the closing costs and other fees typically paid as part of the refinancing process.|
|If your home is in poor condition||Got a long list of repairs waiting to be completed around your home? You may want to postpone selling until some of the work can be done. It’s important to show your home in its best light in order to land the most favorable offer possible. “If the home is in disrepair or there’s an unfinished project, you are less likely to get a good amount,” says DiNenna.|
|If you have no game plan||If you’re simply trying to time the market to make a profit and have no plan for after your home is sold, it may be best to wait. “It doesn’t make sense to sell if you don’t know what your next play is,” says Albert. “Where are you going? Where is that money going to be spent? If you don’t have a plan, then you shouldn’t sell.”|
Tips to sell your home
If you’ve considered the pros and cons and decided to put your home on the market, here are some steps you can take to get the best deal possible.
- Find a good agent: The advice and guidance provided by a professional real estate agent can be invaluable, particularly amid a hot housing market. Take the time to research several candidates, and ask friends or family members to recommend agents they’ve had a good experience with. “A Realtor can help you create a game plan to get your home organized and in shape to present it in the most favorable light,” says Jen Horner, a Realtor with RE/MAX Masters in Salt Lake City, Utah. “The right preparation will allow sellers to feel their home has solid representation.”
- Make major repairs if needed: To help land the best offer for your home, make necessary repairs. “Sellers need to understand that they only have one chance to make a first impression,” says Horner. “Your Realtor can walk the property with you and make suggestions for preparing your home to hit the market.”
- Declutter the interior: You should also make an effort to tidy and declutter your home, allowing prospective buyers to see the living spaces clearly. “Less is always more,” says Horner. “The fewer items in a room, the larger it will feel. Remove any personal items. Position furniture to make the layout of the room flow and remove any unnecessary furniture.”
- Add curb appeal outside: Your home’s exterior is another part of making a good first impression, and it’s worth freshening up the curb appeal before buyers see it. That can include improving or upgrading landscaping and walkways and a fresh coat of paint on the front door.
- Invest in home staging: Staging a home for sale, particularly if it’s vacant, can help prospective buyers visualize how rooms can be used and present a more inviting and polished image. “Staging can help show the buyer how to optimize the space,” says Horner.
With continued supply shortages and high buyer demand, now is a good time to sell your home. And with interest rates on the rise, it may be better to sell sooner rather than later — if rates spike much more, some prospective buyers may retreat from home shopping.
But consider your reasons for selling carefully. If you’re simply trying to time the market and don’t have a solid game plan for after your home is sold, then it may be smarter to hold off for now.