Is it time to sell your home? Have you been there long enough? How long is long enough? When is the ideal time? There are many factors to consider when timing the selling of your home. Below we have listed the major factors to consider before deciding whether the time is right to list.
The Tax Factor: You want to take taxes into consideration first and foremost. Nobody wants to take a financial hit. The gold standard is two years. This will help you steer clear of capital gains taxation on your home. Besides the financial downside, selling early could lead potential buyers to wonder if there is a problem with the property. This is called negative buyer perception, and can lead to fewer or lower offers on the home.
Equity: The first few years of home mortgage payments are usually dedicated to paying off interest before taking bites out of your principle. Usually it takes 5-7 years before you start eating away at that and begin building equity in your home.
While paying down principle is one way to build equity, another is by improving the value of your home by renovating. Projects such as bathroom and kitchen remodeling, deck additions or flooring upgrades can add equity to your home as well.
Market Conditions: Take the time to do the research on how similar homes in your area are currently selling? Factor in costs like commissions and closing cost on a new home purchase when deciding whether now is the ideal time to list your home. For help with this information consult with a Real Estate Agent before you decide to sell.
While there are many things to take into consideration when trying to calculate the perfect time to sell, these tips will help to give an overall idea of when and where to begin.