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When The Time Is Not Right To Sell Home

Is now the best time to sell? Many factors may influence your decision—but timing can be the most decisive, because it affects not only how much money you take away from the sale, but your next move as well. If the market is fast and prices are escalating, you may have to respond quickly to offers and compete aggressively to find your next house. In a slow market, you may be forced to list your home for less and offer incentives to attract buyers. Consider all the factors when determining the best time to sell.

If you need to sell, you may not have the opportunity to weigh alternatives. But if you merely want to sell, and aren’t under pressure to act by a certain date, time is on your side.

Reason for Selling Alternatives Pros Cons
Need more space Remodel your current home. By remodeling, you avoid the costs associated with selling. You also may improve the resale value of your home. Consider using your home equity to finance your project. You run the risk of over-improving your home, which means you may not recoup your investment when you sell. Also, remodeling projects that increase property value usually trigger a reassessment, which may lead to an increase in property taxes.
Need less space Consider renting out part of your home. Or, rent out the entire house and buy a smaller home to live in. If property values are appreciating, it may be wise to keep your investment in the neighborhood. You can gain rental income and still enjoy the tax benefits of home ownership, including writing off any rental expenses. You must be prepared to be a landlord. Not only does that entail getting and keeping good renters, but maintaining the property, carrying liability insurance, and complicating your finances at tax time. Consult your tax advisor.
High monthly payments Refinance your current loan. If you’ve owned your home for more than five years and have not refinanced, you may be able to reduce your monthly payment significantly by refinancing with today’s lower rates. When you refinance your home loan, you essentially reset the clock on your loan, which may cost you money in the long run. Run the numbers before you refinance.
Escalating prices Rent out your current home and buy another in a less expensive area. In an appreciating market, your home may be worth more as a long-term investment, especially if you want to buy your next home in a cheaper area. You also avoid sales costs at this point. You must be able to qualify for another home loan while carrying your current mortgage. Also, waiting to sell may cost you when the market and prices settle down.
No cash to remodel Refinance or take out a home improvement or home equity loan. Increasing the value of your home can pay off when you sell. You don’t need to have cash in hand to finance home improvements. Your property taxes may increase after the remodeling is complete and your home is reassessed (as happens in most jurisdictions).
Major life changes Sell later If you are suddenly widowed or divorced, selling now may be emotionally difficult. It also may make more sense financially to sell later, especially if the market is slow and you aren’t likely to reap the most you can from a sale. In the case of a divorce, you may need to refinance in order to pay off your partner’s share of the equity. Consult your financial advisor. If the market is near its peak, waiting to sell may cost you in sales proceeds. Investigate the market and consult your financial advisor.