Do you have the feeling it’s time to move, but then you keep asking yourself, Am I ready to sell my house? Times are strange. Where will I go next? And then there are all those memories packed inside those four walls, not to mention, it’s the most valuable possession you own.
Reflecting on if you’re ready to sell is important since selling at the wrong time can cause trouble for years to come. So how do you know if it’s the right time to take the leap and sell? Here are 5 tell-tale signs you are ready to sell:
1. You Have Equity In Your Home
From a financial point of view, you are in a good position to sell your home when you have built equity. During the housing crisis back in 2008 millions of homeowners ended up with negative equity, meaning they owed more on their homes than they were worth.
Selling when you have negative equity is not the ideal situation. That’s called a short sale. Breaking even on your home sale is better, but it’s not the best scenario. If you’re in either situation, don’t sell unless you have to avoid bankruptcy or foreclosure.
For the last several years, home values in Boise and the entire Treasure Valley have increased rapidly meaning most homeowners are building equity. Their homes are now worth more than they owe on them, and that trend will persist as they pay down their mortgages and home values continue to increase.
So how to figure out how much equity you have in your home? It’s less complicated than it seems to get a general idea. Here’s how you do the math:
On your latest mortgage statement locate your current mortgage balance. Next, you need to find out your home’s value on the current market. You can use online valuation sites, but since Idaho is a non-disclosure state those prices are not accurate but can give you a rough estimate. Ideally, if you’re considering selling you should ask an experienced real estate agent in Boise or the surrounding area to provide you a Comparative Market Analysis or CMA. Boise real estate agents will typically do this for you at no charge.
Now with those two numbers, simply subtract your mortgage balance from your home’s estimated market value. The number you come up with will provide you a good idea of how much equity you have.
Example:
$379,000 Current Home Value
– $225,295 Mortgage Balance
=$153,705 Equity
A good rule of thumb to know if you have enough equity is that you have enough to pay off your current mortgage with enough left over to provide a 20% down payment on your next home. But if your sale can also cover your closing costs, moving expenses, and even larger down payment—that’s even better. Another advantage to a 20% or more down payment on a home will eliminate having to pay private mortgage insurance or PMI which will save you hundreds, if not thousands of dollars a year.
2. You Can Afford a Home to Meet Your Current Needs
Probably the main reason you are considering selling is based on how well your home meets your everyday needs. Perhaps it could be that with the recent changes in 2020 you now will be working from home indefinitely and the kitchen counter isn’t the ideal work area. Maybe you could use another bedroom (or more) for your growing family. Or maybe the situation has changed and your kids have all moved out and you’re ready to downsize. It’s freeing to sell large home, pay cash for a smaller one, and invest the rest for your retirement.
Whatever the reason for the change, make sure your mortgage fits your budget. A good recommendation is to keep your monthly payment to 25% or less of your take-home pay on a 15-year fixed-rate mortgage.
3. You Can Cover The Costs To Move Out of Pocket
It can be easy to get carried away by the excitement of your next home that you forget to account for the cost of moving out of your current one. Hiring professional movers? Save up cash to cover the cost of packing up and hauling your stuff away.
You should also invest a little to make sure your current home is in tip-top shape to bring in top dollar. Focus your home improvement on paint, curb appeal, plus kitchen and bath upgrades. If you have the cash and your roof or HVAC are nearing the end of their lives get them replaced as this will give confidence to the new buyers and bring in a higher price.
Remember whatever you put into your home you make back and usually double when you sell. That means if you invest $10K into getting your home in shape you can expect a minimum of $20K more in return when you sell. If you are on more of a budget, a little bit of fresh paint and elbow grease can go a long way into making a great impression—and getting your home sold fast!
4. You’re Emotionally Ready To Sell Your Home
The finances are one thing, but selling your home is an emotional issue too. Ask yourself the following questions before you put the “For Sale” sign out front:
- Are you ready to put in the work, pack your house to get it ready for potential buyers?
- Are you prepared to be able to leave your homes so it can be shown to buyers?
- Are you ready for honest negotiations over what buyers are willing to pay for your home or may want to be fixed on your home before they agree to buy?
- Are you ready to move out and leave the place where your family has made memories?
- Finally, have you looked at what is out there on the market for your next home, and are you ready to start the home hunting process?
You must be ready both financially and emotionally before you sell. It’s also good to note that in Boise’s hot real estate market buying a home can be a challenge and more expensive than what you are used to. Being realistic and not expecting to sell high and buy low is important, but rather understand you are selling to better accommodate the next chapter in your life.
Having a local real estate agent in Boise or the surrounding area guide you decipher if this is the right time financially and emotionally is a great step if you are still on the fence about selling.
5. You Know What’s Going On In Your Local Real Estate Market
You’ve been following the real estate facts and trends for the past couple of years and realize that real estate in Boise, Idaho continues to increase in value. Although we can’t predict 100% how the housing market will perform in 2021 we can estimate based on the past year that home prices will continue to rise as we move into the next year.
Supply and demand is the reason we can reasonably expect the market to stay hot as we venture into 2021. Boise is at just a two week supply of homes for sale and Ada and Canyon Counties, in general, are not too far from that number. With buyers moving here from all over the country to escape big-city life and get a taste of the great lifestyle and more affordable living in Southern Idaho it appears the demand will continue to grow.
In other words, if you are selling a house there is no better time financially as it is definitely in the seller’s favor to sell. Buying can be more challenging, but as prices continue to increase that means buying sooner than later could mean starting to build equity quickly.
So, are you ready to sell? Maybe you didn’t meet all the five signs and need to reevaluate later. Regardless, if you have questions and want more information about the local real estate market and if it makes sense to sell please contact top real estate agent for Boise, Idaho, and the surrounding area, Jennifer Louis at (208) 509-9122 or jennlouis@welcometoboiseandbeyond.com for a free consultation, with no obligation.
