Analyzing Your Financial Situation
With interest rates at record lows and home prices remaining low, we know it is a good time to buy, but is it a good time to sell? The biggest influencer in home sales is the economic situation. Harsh economic times last year resulted in low consumer confidence thus very few home sales.
Before you think about selling you must analyze your situation. Why are you selling? Perhaps your lifestyle is changing and you need a larger house or a more family oriented neighborhood, or maybe it’s a new job that is causing the move. Without good reason for selling it is not recommended as the housing market is just in the beginning stages of recovery and you may be selling your home for a loss.
If you are not prepared to sell for a loss another option you have is renting your home. If you decide to rent out your home there are many questions you have to ask yourself such as how long should you rent and what should the terms of the lease be. Using a real estate agent will take a lot of stress off of you and will also help protect you and your home. It is important to also protect yourself legally when you choose to become a landlord. Consulting a lawyer with matters of the leasing agreement can be helpful.
If you decide to sell your home, it is important to work with a realtor when you price your home. When priced correctly you are likely to see things move quickly because there are many buyers on the house hunt and few sellers. Even though your home won’t be sold at the value it would have been several years ago, the new home you purchase will be at equally low rates. Which means you will have smaller down payments and closing costs, as well as taking advantage of the low interest rates.
For instance, if the market is down 10%, the home you bought for $200,000 is now worth $180,000, resulting in a $20,000 loss. Now you are looking at homes that used to be worth $400,000 but now can be purchased at the same 10% discount. This results in a $40,000 savings. When you subtract your $20,000 loss you result in a $20,000 net gain.