Wants and Whys
The first step is to determine what you want to do and what your motivation is to make this move. Ask yourself, does this decision align with your ultimate real estate goals? Sometimes people don’t have these pieces figured out and that can create pain points down the road. Once you have clarity on your objectives, you will want to have buy-in and support from all the stakeholders involved. This might be a significant other, a family member, an investor you partnered with, or a trust if you inherited the property. When everyone involved is on the same page you will want to talk to your CPA, financial planner, and tax preparer. Understand, what the tax implications are and what impact this decision might have on you financially. Additionally, if you plan to buy another property, check with your lender to see what you qualify for and find out about current mortgage rates ask they have been fluctuating more rapidly than they did during the peak of the pandemic. If you haven’t already started to talk to your real estate professional, this would be a great time to begin having a conversation about your goals and developing a strategy.
Determining the Value
One of the next logical questions is, what’s my home worth and how do you figure it out? Well, it’s based on five characteristics: location, condition, square footage, lot size, and views. Of these five factors, the one thing you have the most control over is the condition of the property. You can improve the property to get a higher dollar amount for your home and is often one of the most common things sellers will focus on before they place their home on the market.
Often, we look at the neighborhood and evaluate the properties that are listed. We rank the homes based on the five criteria to determine how your home compares. Buyers will be looking at the same data to come up with their own personal valuation. One of the most important things to consider is the sale price of recent home transactions. Recently, the real estate market has changed at a very rapid pace, which is largely due to fluctuations in mortgage rates. So, a home that sold six months ago is likely not going to be a very good indicator of your home’s worth when compared to a home that sold last week. Properties sold within the last three months are going to be the most relevant to buyers and coming up with a price point for your home. Market conditions also matter and are often very specific to your community. It’s good to know what the market environment is going to be once you decide to place your home for sale.
Does Selling Make Sense?
One of the last steps before deciding if now is the right time for you to sell, is to get a sense of what your net is going to be. Or in other words, what is a reasonable expectation of how much money you should make once you sell the property? Making this calculation is important in gaining clarity so that you are not surprised later. Going through these steps will give you a clear picture of what to expect, which can be very powerful and let you make an informed decision about the right move for you in your real estate journey.