We’ve all heard the maxim “buy low, sell high” to turn a profit, but that formula is a lot more complicated when selling your house.
Sure, the COVID-19 pandemic lit a fire under the housing market, with the median existing-home price skyrocketing to $416,000 this June, a new record high. This marks 124 consecutive months of year-over-year pricing increases — the longest-running streak that the National Association of Realtors (NAR) has on record.
But scoring a jackpot when selling leaves you with lots to handle. Moving costs. Mortgage rates. The whole process of finding a new roof over your head that suits your needs and your lifestyle.
We’ve gathered expert tips and insights about eight key questions to ask yourself to determine when to sell your house — and how to fetch the highest price and fastest closing date.
1. Is it a buyer’s or seller’s market?
Interest rates, unemployment, and other economic factors influence the housing market. A seller’s market puts the seller at an advantage. The inventory available can’t keep up with buyer demand, so sellers’ homes don’t sit on the market for long. In fact, sellers might find themselves with multiple offers and close much higher than their asking price.
A buyer’s market lets buyers be choosier. More homes for sale means they sit on the market longer, leading sellers and their agents to discuss strategic pricing, marketing, and showings.
While home values naturally appreciate over time, market conditions still impact how large your profit will be when you sell. (Curious about what your home is currently worth? Try HomeLight’s Home Value Estimator, which crunches real-time housing market data based on your home’s condition and other factors in your area.)
Boise, Idaho, has been one of the most overvalued markets in the country and the hottest over the past few years in terms of appreciation, says Ti Smack, a longtime real estate agent in Eagle, Idaho, who works with over 73% more single-family homes than the average agent in that area. Out-of-state buyers from California and Washington State seeking lower taxes, better schools, and better environmental conditions have driven the Boise market higher.
“There’s limited supply and extreme demand across all price points,” he says. “It’s kind of pushed the local homebuyers out.”
Nationwide, after what the NAR calls “two years of gangbuster performance,” the housing market has cooled, with existing-home sales dropping for the fifth straight month. June sales were down 5.4% from May and 14.2% from one year ago. Housing inventory also rose 25% during recent months compared to 8% — the pre-pandemic average for the same timeframe.
All this means that buyers soon could find themselves on more solid footing — something to think about if sky-high asking prices are one reason you’re tempted to set out a “For Sale” sign.
2. Do you have a proven real estate agent?
Of course, deciding when to sell your house involves other elements beyond market conditions. A seasoned agent can guide you through this unfamiliar territory. In fact, most sellers rely on an agent’s expertise: In 2021, 90% of home sellers worked with a real estate agent to sell their home, NAR statistics show.
For their help, agents earn commissions ranging from 5%-6%, which the seller typically pays in full out of the proceeds at closing, but their expertise is valuable. (Check HomeLight’s Commissions Calculator for an estimate of average commission rates near you.)
An agent’s advice includes:
- Recommendations for any improvements and repairs before listing — and a network of contractors who can help with estimates
- A solid pricing strategy based on a comparative market analysis including charts, specifications, and photographs of comparable houses in your area
- Marketing services including staging, professional photography, arranging exclusive previews for other brokers, virtual tours, and coordinating open houses
- Managing offers, negotiating repairs and concessions, and handling other issues that crop up so you can get to the closing table worry-free
Working with an agent also typically nets you the best price. Last year, homes sold with an agent’s help sold for a median of $318,000 — about 22% more than the $260,000 median sale price of those who went the For Sale By Owner (FSBO) route. Most buyers paid 100% of the asking price, but 29% went even higher, NAR statistics show.
If it’s been a while since you’ve been in contact with the agent who sold your home to you, you can ask friends and colleagues whom they recommend. HomeLight’s Agent Match also can lend a hand. This free service analyzes agents near you by thousands of reviews and millions of transactions to find ones who might be a good match for your home sale.
3. Does your home no longer fit your needs?
Life happens. Even if you love the home where you’ve lived for years, a job change or other circumstances might inspire you to look elsewhere. Last year’s sellers told the NAR that they wanted to move to be closer to friends and family (18%) or because their current homes were too small (17%). People still seem to crave more open and relaxed spaces, with 85% of buyers in May purchasing in a suburb, small town, rural, or resort area.
Here are some reasons you might want a bigger (or smaller) place:
- You have three or four teens jockeying for space in one bathroom
- Your kids have grown and moved out, leaving you with more space than you can handle
- You need a home office (one perk that 59% of buyers wanted in May)
- You need more parking
- You’re maintaining a pool that no one uses anymore
- Your home’s upkeep is more than you can afford
- You want a quieter neighborhood — or one that’s more walkable so you don’t have to drive as much
Older homeowners have some additional considerations, such as:
- Stairs that make it difficult to access living spaces
- A steep driveway that presents a fall risk
- Large walkways and long driveways that require shoveling snow in colder climates
- A large lawn that’s difficult to mow
- Cabinets or storage spaces that are hard to access
- Too many windows and too much space to keep clean
“Many times as people get older and become empty nesters, they no longer want two-story homes they raised their families in,” Smack says.
4. Can you afford to move?
Unfortunately, moving isn’t as easy as clapping your hands and zapping yourself to your new space. While some life events can overrule financial considerations, sometimes the numbers just don’t add up.
Tools such as HomeLight’s Home Affordability Calculator can help you evaluate how much home you can afford, but moving can entail some costs that people often don’t consider up front, such as:
- Paying debt from your home equity. (Check our Net Proceeds Calculator for an estimate on how much you’ll make from selling your home. Is this enough to carry you over to a new place?)
- A cost-of-living adjustment. Online tools such as SmartAsset’s Cost-of-living calculator factor in housing but also food and other necessities. Moving to Boise from Los Angeles leaves 16% more money in the bank to maintain your lifestyle while moving from Austin, Texas, to New York City means you’ll need to earn 21% more.
- A down payment or a security deposit. Our Down Payment Calculator helps crunch how much you might need to put down on a new house. Estimate one to two months’ rent for a security deposit if you decide to rent instead.
- Activating utilities at your new home, such as gas, water, electric, cable TV, and internet service.
- Physical moving costs. Hiring movers costs an average of $1,648 for under 100 miles. While you might save a little by asking friends to chip in (among other tips), you still might have to rent a truck and factor in packing supplies.
- Closing costs. Besides your remaining mortgage balance, closing costs include utilities, HOA fees, taxes, commissions, and more. Our Closing Costs Calculator can provide an estimate of these costs in your area, but figure on about 5%-10% of the home sale price.
5. What’s your selling timeline?
If a new job means moving to another state in two weeks, you can’t be that discerning with your offers — and even then, things can happen that delay the sale. The median days on market in June was 14, with homes listed receiving an average of 3.4 offers, down from 4.2 a month earlier, NAR statistics show.
Although 88% of properties sold in less than a month, contracts still took 30 days to close, these statistics show. From April to June, 18% of contracts had delayed settlements, with 18% of those because of appraisal issues.
Your buyer’s circumstances, such as losing a job, also might throw off the sale. From April to June, 7% of contracts were terminated, these records show.
6. Is your neighborhood changing?
If you’ve lived in your home for ten years or more, you’ve watched your neighborhood evolve. Perhaps you have more schools in the area, or you now noticed you’re the oldest resident on the block.
Among last year’s sellers, 11% wanted to move because their neighborhoods had become “less desirable” for a variety of reasons. (Conversely, 63% of buyers said the quality of the neighborhood influenced their purchase.)
These qualities can include:
- School districts: 23% of homebuyers said the school district’s quality impacted their home choice. While you can ask for a higher price in an area with coveted school districts, some sellers might want to save on property taxes if you’re no longer benefiting from this spend on education.
- Business development: Is your home close to a large employment sector? What about light rail or public transportation that could save potential buyers on their commute?
- Lifestyle and entertainment: Is there more shopping nearby, or have businesses closed? Is your home convenient to parks and leisure activities? How walkable is your neighborhood?
- Sense of community: If you’re a family with young children, you’ll naturally want to live among similar families. Likewise, older residents might appreciate more of a planned or deed-restricted community with accessible exercise and activities.
7. Is it a good time of year to move?
Traditionally, the best time to sell a house is June if you want to maximize the sale price — and July if you’re eager to sell quickly, HomeLight’s market research shows.
But this can vary by location. “Historically, the peak of our market is from the first week of June — when the kids get out of school — to the end of August,” Smack says. “People want to get into their homes and settled before the school year starts.”
Even if you’re not dealing with seasonal weather, the best time to sell varies by location, interest rates, and market conditions. Check out our Best Time to Sell Calculator for HomeLight’s historical data in your market on when you can make the most money and which months are best to sell your house fast.
8. Is your home in shape to sell?
True, there are some renovations that increase your appraised value and potential offers, such as adding liveable square footage. But few buyers want to snap up a home that needs TLC: Only 6% of buyers last year wanted a fixer-upper. In fact, 36% of buyers chose a new home to avoid renovations or problems with plumbing and electricity.
You don’t have to revamp your whole home to get it into the best shape to sell, though. A survey of HomeLight’s top agents estimated the top resale value of these low-cost projects:
- Declutter cabinets and countertops: The average home has a mind boggling 300,000 items! Pare down your books, clothes, and collectibles, stash those everyday appliances, and show off all the space you have for a return on investment (ROI) of 432%.
- Deep clean inside and out: Clean the floors and windows, dust the baseboards and ceiling fans, and clear out the gutters. (HomeAdvisor has rates for several projects here.) Even spending about $200 to make your home sparkle has an ROI of 935%, our agents say.
- Put your best foot forward with curb appeal: Show off your landscaping to put more green in your pocket, our agents say. Curb appeal gives buyers the impression that you’ve maintained your home well, and buyers will pay 7% more for a house with good yard care. Just mowing the lawn, tidying shrubs, and spreading mulch can have an ROI of up to 238%.
- Stage rooms to show their best features: Just because you’ve arranged your furniture a certain way doesn’t mean you’re taking full advantage of its natural light and other features. Staging attracts buyers, helps them visualize themselves in a home, and can increase the sale price, 67% of top agents say.
Now it seems like there’s a movement to get out of these bigger homes. People just don’t want to deal with the work to take care of a home that size.
- Ti Smack
Real Estate Agent
Real Estate Agent at The Smack Group
Currently accepting new clients
- Years of Experience
- Average Price Point
- Single Family Homes
Is there something about your current home that just doesn’t fit anymore?
Consider this a bonus question. Sometimes selling your home comes down to other particulars, such as noticing little leftover cash in your monthly budget, needing to convert your home equity into income, or just wanting a lifestyle change.
Smack has noticed this among affluent buyers, who about a decade ago thought bigger was better, buying homes from 3,000 square feet well up to 8,000 square feet. “Now it seems like there’s a movement to get out of these bigger homes. People just don’t want to deal with the work to take care of a home that size,” he says.
Watch out for red flags
So, you’ve done the math and decided you’re ready to take advantage of a hot market and make some money — or sell before a recession. Press “Pause” on calling an agent long enough to consider your next move — and budget accordingly.
Ask yourself first: Where will you go next? “The hard part is, before we list your house, where are you moving to? If you’re going to move locally, we need to work on that a little bit,” Smack says.
Even though some homeowners in his area can sell for record prices, when they see what they could buy with that money, selling makes little sense. As some put it, “Why would I go from a 5,000-square-foot house to a 2,500-square-foot house and pay the same price for it? … I’d rather stay in the home I’m in,” Smack says.
Don’t let your fear of missing out drive you to a foolish decision. The housing market always moves in cycles. “In the future, there will be some real values out there to be had,” he says.
In short, ask yourself these 8 questions to figure out when to sell your house
- Is it a buyer’s or a seller’s market?
- Do you have a proven real estate agent?
- Does your home no longer fit your needs?
- Can you afford to move?
- What’s your selling timeline?
- Is your neighborhood changing?
- Is it a good time of year to move?
- Is your home in shape to sell?
If you need expert guidance weighing the pros and cons, an experienced real estate agent can help. Look to HomeLight’s free Agent Match service for a data-driven selection of agents in your area who can analyze local pricing trends and prices per square foot, provide expert home prepping and staging, market your home extensively, and negotiate to get you the best price.
Header Image Source: (Pxhere)