For many people, selling their home is generally part of a long-term plan, but occasionally a new opportunity might arise or you may want to change lifestyles and selling sooner vs. later looks like a good idea.
Maybe your home has more space than you need or you’re thinking about changing jobs or you see an opportunity for profit and are looking for a change. Before you commit to selling, think through whether now is the best time to sell your home and avoid saying goodbye to your home on impulse.
Here are three situations where you may decide that now is the best time to sell your home, and other considerations that may tip the scale toward holding onto your home for a bit longer.
1. Rising home values in your neighborhood
In certain parts of the country, like San Francisco and New York, home values have skyrocketed in recent years. If you’re lucky enough to have purchased your home before this boom, you might find that your house worth a lot more than it was even just a few years ago.
“You’re not just buying a home, it’s also an investment,” says Jon Makolondra, a real estate agent in New York.
Maybe it’s just that your neighborhood that’s seen a sudden increase in demand or the particular architecture of your home is in vogue. If your investment has suddenly gained tremendous value, selling while popular opinion is in your favor may result in a larger profit than anticipated, which may in turn mean being able to afford a higher down-payment on a new home than you would have made selling in a more temperate market.
2. You’ve become an empty-nester
If your children have all recently gone off for careers or college, you might feel that your home is now too big for just yourself and a spouse. If you don’t need the extra room or can’t seem to find good use for it, you may save money by moving to a smaller house.
Or, perhaps you’re facing the opposite dilemma.
“Many homeowners decide to sell when their home no longer fits their lifestyle,” says Jeremy Wacksman, Chief Marketing Officer of Zillow. “This could mean that your family is growing and you need more bedrooms.”
If this is the case with you or your family, it may be time to consider selling your home so that you can move into one with the right amount of room.
3. You’re nearing retirement
For those close to retirement, selling a home can be a tricky aspect of the post-retirement budget to plan for. You might have planned to retire in your home but are now thinking the size and layout are not right. Or, maybe your plans are changing and you’d prefer to spend your retirement years somewhere warmer.
“When people retire, they’ve generally raised their family and are ready to fly south,” Makolondra says. If you can downsize to a smaller home while also moving to a cheaper real estate market, selling your home at this time may be an exceptionally good way to come up with some additional retirement cash flow.
When you should wait to sell your home
But there are also times when choosing to hold onto your home may be the best option for you. Maybe the home prices in your neighborhood have dropped and you expect to lose money on a sale, or perhaps you anticipate needing the extra space in your home in the near future whether it’s for visits from your children, future grandchildren, or for an elderly parent who needs additional live-in care.
If you don’t have a need to move and there isn’t an opportunity to capitalize on by selling, it might be much better for you to hold onto your house, especially if your mortgage is nearly paid off and it’s relatively cheap to live there.
“If you’re not ready to sell, then don’t rush it,” says Wacksman. “Sell your home when it makes sense for your individual situation.”
If you believe it may be time to sell your house, be sure to consult a financial professional to determine the most appropriate steps for you.