Despite a global pandemic, 2021 brought dramatic increases in home values to many real estate markets across the country. However, with the peak spring selling season just around the corner, some homeowners are wondering if they’ve already missed their opportunity or if it’s still a good time to sell.
As expected, the answer is almost always that it depends. Fortunately, evaluating the situation in your neighborhood and understanding the role of your unique circumstances isn’t all that complicated. Here are some ways to get started.
One of the first things to consider when determining if you should sell is where your next stop will be. It’s a good idea to review the availability of homes in the area you hope to move to, as well as pricing trends. You may find that finding a replacement will be a struggle logistically and financially.
However, if you plan to move to a lower-demand area or feel comfortable with the options, it may be time to call your real estate agent. You’ll also want to find out how inventory in your current area is affecting sales. An experienced agent should be able to share how long nearby homes are staying on the market and whether multiple offers are likely.
Consider Your Equity
It’s also essential to have a reasonable idea of the equity you have in your home. If you’ve owned the property for a while and values have risen, it may be substantial. But remember, selling a home and buying another comes at a cost. You’ll typically pay six percent in agent commissions, plus the down payment, closing costs, and pre-paid requirements of your next purchase. In addition, moving and storage costs can add up quickly.
Your current interest and the one you will qualify for on your next mortgage should also be part of the equation. Rates remain relatively low, so you may find that a change works in your favor by reducing mortgage payments on a similarly priced home. But a rate increase, whether due to the timing or a change in your credit score, could dilute the value of your equity.
Have a Good Reason
Of course, the best reason to move is that you want to. While the bottom line is critical to any transaction, your motivation shouldn’t be overlooked. Moving to find more room for your family, cut down on a commute or further your career can be more important than how it affects your bank account.
Homeowners with a good reason to sell and the ability to find a home that better meets their needs rarely regret the decision. In contrast, the ones driven primarily by a seller’s market face a much more risky endeavor.
Browse our website to learn more about the many mortgage options we offer our clients. Then, when you’re ready, call one of our experienced originators to talk through all the details and find the answers to all your questions.