Homeowners are debating what to do with their properties, whether they should sell them or hang on. Every person has to make their own decision based on their situation. However, looking at the current condition of the market can give you insight as to whether or not selling your property right now is a good idea. Why prices remain high, there are challenges that are impacting those who do have their homes listed.
One of the challenges is that construction is so expensive. Because of that, if your property is in need of major renovations and upgrades, it could heavily impact your property value. Without having that work done already, the buyer would be on the hook for those costs as well as higher insurance premiums. However, if you were to take on those costs you have the opportunity to get that money back and more, even from an investor who could see the long-term value in the property.
Advantages To Selling Now
If you want to sell your home now you should do it. While you may not get a great offer the first day, you will get reasonable offers. The key to selling your property right now is that you are going to get a great value for it, even if you have to wait a little longer. People are patient but eventually, they will see your home as a good buy and they will come in with a better offer knowing that their options are limited.
Another thing to consider if you want to sell now is that you may be able to make a major profit. If you purchased your home before 2017, your value may have gone up significantly since then, even if you’ve done minimal work and upgrades. Because of that, the opportunity to cash out big is sometimes too much for homeowners to overlook.
The Strength In Home Prices
Buyers are on the fence for once reason above all right now, prices are too high. Even with inflated rates, these high prices are making it tougher for buyers to make a decision. However, one of the main reasons for the increase in values and a reason why buyers are so frustrated is that there’s minimal inventory allowed. With less inventory on the market, buyers and investors have to battle over what deals are available.
This is why, despite everything we’ve seen of late with interest rates and tougher restrictions on buyers, homes are still being sold at a good rate and especially for good prices. If properties are ready to move in and in great shape, they are moving quickly, even if the asking price is higher than what people expected.
Why Renting & Waiting May Be Smart
If you want to sell your home the first thing people will ask you is where you plan on living once you do. This is a fair question and one of the first things you need to consider before making the decision. Everyone is different but renting an apartment is still an affordable option, especially compared to renting a home or larger property. If you can manage living in an apartment for some time, you could bank the profits you made on your home sale and wait for prices to potentially go down or for inventory to pick back up.
Regardless of what happens, you will benefit from having the profits from your sale and affordable living options with minimal debt. This means you will have the opportunity to be an ideal buyer if and when you choose to buy again, but be prepared for it taking some time potentially.
Don’t Focus On Interest Rates
Yes, interest rates are going up. However, that is doing little to nothing to slow down home sales. If home sales are down right now it is more because of inventory and prices than it is because of rates. While the rates may disqualify some people from qualifying for loans, the majority of buyers are going to be able to adjust and cover the additional cost. Therefore, you should not let interest rates influence your decision on whether to sell now or not.
You should also not be deterred from selling because of increased costs in rent. If an apartment costs what your home mortgage costs, you are going to save monthly on utilities, insurance and taxes as well as other costs. You also will not have to focus on the cost for renovations or upgrading the property and its appliances.
Talk To Your Realtor
While the market remains strong, it’s good to get inside information on your specific area. What are the homes doing in your area? Are they selling fast, are they getting good value? Your realtor can guide you through the waters of what it takes to sell your property, the value you should expect and other things you can consider before making the decision. If you can wait and make renovations to the property, that may be the better choice.
While handling the construction side of things yourself may seem like a lot of work and money, there are some key advantages to doing it on your end. One of the main advantages is that you not only get to increase the value of your property because of the construction, but you can actually ask for a lot more. The reason is because you are eliminating the hassle, time and cost of construction for the new buyer. Since you took care of all of that, you get to profit from that work and the new buyer will be happy that they can cover those costs in the mortgage rather than having to pay for everything themselves.
Consider your options but also remember, home values may not decline more than 20% in the future. That means if it’s way too expensive for you to buy now, you may not be able to buy in the the immediate future. Renting is not a bad alternative but it may not be an option for everyone. Consider what works best for you and talk to your real estate agent before making a final decision.