Selling your home is a big decision, one that you shouldn’t enter into lightly. Your own personal or financial circumstances may dictate that you HAVE to sell your home, but if you’re thinking of selling solely for one of these reasons, you should probably not do it.
Don’t sell just because:
- The mortgage exceeds the home’s value
- You don’t want to pay for needed repairs
- You’re trying to “play” the market
- You don’t think you’ll like the new neighbors
- You don’t like the home’s cosmetic appeal
Don’t sell your home because the mortgage exceeds the value
Obviously, if you can’t pay the mortgage, it’s reasonable to sell the home but if your job is stable but your home has lost value below the mortgage balance, ask yourself why you bought the home in the first place. If it’s because you like the neighborhood, it’s a short commute to work, the schools are great, and the home meets your needs, then the temporary dip in the home’s valuation shouldn’t play a factor.
Don’t sell your home to avoid major repairs
People sometimes decide to sell a home just to avoid paying for repairs they can’t afford or don’t want to make, such as replacing a roof or fixing a cracked foundation. When you sell, disclosing major issues isn’t just a matter of good ethics, it’s the law. Even so, there are still some homeowners out there who will sell in the summertime just to avoid disclosing a faulty furnace (“… it worked when we lived there!”). Their thinking is that disclosing problems with the home will result in a lower purchase price or drawn out negotiations – and it will – but that’s the right thing to do. No one who buys a home wants to feel that they were duped about its condition.
It’s just human nature to try to get away from bad situations but failing to disclose major issues can quickly lead to lawsuits and a severely damaged reputation. In short, never sell simply to avoid repair costs. If your home has existing repair issues, always disclose them to the prospective buyer.
Don’t sell your home to play the real estate market
It’s fine to sell in order to realize the equity you’ve built up over time, but it’s generally not a good idea to sell solely because of a recent increase or decrease in local property values. If you sell into a recent rise in prices, you’ll instantly become a buyer in that expensive market when you start shopping for another home. If you sell into a downturn, you’ll likely regret your decision eventually: since 1968 (when reliable records of home prices were first kept), U.S. real estate prices have always increased in value over periods of five years or more. The current downturn may buck that trend but selling when prices drop is a losing game.
Don’t sell your home because you don’t like the new neighbors
Tempting as it may be to move away from people who look or act much differently than you do, it’s much better to venture over and offer a “welcome to the neighborhood.” Chances are very good that your new neighbors chose to live on this street for the same reasons you did. You have that much in common already.
Don’t sell your home because of its cosmetic appeal
Every day “flippers” find homes that need a little cosmetic fix-up (aka “ugly houses”), invest a little money, and reap big bucks. It’s amazing what fresh sod, some annuals, and mulch can do for the exterior of a home. Add in a little fresh paint, pressure wash the sidewalk and driveway, and clean up any clutter and you’ll instantly increase the curb appeal of your home.
If the inside is tired and drab, some fresh paint and furniture re-arrangement can make a big difference in how a room feels. Don’t sell just because there are some minor things to be done. If you do, your new home will need those same projects completed in just a few short years … and you’ll start all over again – new home, bigger mortgage.
Selling a home isn’t cheap
Selling a home can cost a lot of money. Just because your mortgage balance is $150,000 and you have a buyer at $225,000 doesn’t mean you pocket $75,000. Sellers typically pay the real estate commissions between 4 and 7 percent, the home inspection ($350 – $500), the termite/pest inspection ($75 – $150+), attorney’s fees (several hundred to a couple of thousand), title fees, escrow expenses, deed-related fees, taxes, minor repairs that pop up from inspections, the list can get extensive … and expensive. Make sure you do your homework, putting pencil to paper before you take the plunge to sell your home.