Why Would You Ever Sell Your Evergreen Home?
Whether you just moved to Evergreen or have lived here for 50 years, you might wonder wonder how long most people stay in their home before they sell it. According to the National Association of Realtors®, ten years is the average amount of time that a homeowner will stay in their home before deciding to sell it.
Of course, there are an infinite amount of factors that go into each decision to sell but If you've been in under ten years and thinking about a move, many experts say you should follow the “five-year rule” and stay in the same home for at least five years before selling. That said, if you bought your home in 2006 there was little chance you'd be able to sell in 2011 without taking a huge loss!
Conversely, those who bought in 2016 have seen enough appreciation to find liquidity in their home already...
Below are some of the factors to consider:
1. Your Mortgage
One of the first and foremost factors you must consider when you decide to sell your home is your mortgage payment. If you want to make money when you sell your home, then your net proceeds must be greater than what’s left of your mortgage. When you first buy your home and begin to pay your mortgage, the majority of the first few years' payments will go towards interest rather than the principal amount. This typically means that it’s more difficult to make money off your sale under 5 years. However, if you put a larger downpayment on your house, then your interest rate and mortgage will probably be smaller, making it possible to make money in a shorter amount of time.
Beyond your principal reduction you can build up significant equity in a variety of ways. Building home equity is important. The amount of home equity you’ve obtained depends on any remodeling or renovations you’ve made, in addition to your mortgage's principal reduction. If the home you bought was already in tip-top shape, then it may be difficult to build equity. If you’ve remodeled the kitchen, bathroom, redone the flooring, de-brassed the light fixtures and doorknobs or made other renovations around the house, then you have most likely gained home equity.
3. Market Conditions
One of the more common reasons that prompts homeowners to call me is when they see the neighbor's house go up for sale and sell fast! In the past few years my listings have sold significantly faster and for more than the sellers thought they would sell for!
If the time is right for you, let';s talk. I keep track of recent home sales in the area and can send you over an up-to-date market report.
Request A Market Report
We have exclusive access to past sales close to your home and we know what the market currently looks like.
4. You're Out Of Space
Maybe this was the first house you bought when you were expecting your first child and there were only three of you, but now with three kids and two dogs, there isn't much space. Although it may be sad to move out of the home where you started your family, the happiness of your family may be greater than the cost of selling your home and buying a new one.
Other life situations like divorce, illness, or even the need to downsize may also lead you to sell sooner than you originally planned.
5. Capital Gains Tax
If you don’t qualify to avoid paying capital gains taxes on the sale of your home, you may not want to sell your home yet. To avoid capital gains taxes, you should make an effort to stay in your home for at least two to five years. Making a sale before two years could be a huge mistake, and could ultimately leave you without much equity, especially if you have to pay capital gains tax.
6. Closing Costs
Closing costs are often overlooked but play an important part when it comes to selling your home. On average, real estate agents have a commission rate of 6% when you sell your home. You are also likely to pay a closing cost when buying a home, which can be between 3%-6% of the purchase price of the home. Keeping closing costs in mind before you sell allows you to budget this into your expenses and avoid surprises when it comes to closing.
So, Is It Time To Sell?
If you've already taken these factors into consideration and decided that it's time to sell, take the first step and get your home's value. If not, no worries! We're here for you when you're ready.