We’ve all heard the adage before and in many things timing does make a big difference. My daughter just sold some stock and a week later the share price had dropped by almost half. Her timing was excellent. Coming back from London last year, my grandson and I were delayed coming back from a day trip in Paris and missed our flight home. That unfortunate timing cost me over $750.
Is It The Right Time?
So it’s not surprising that a common question I get asked is when is the right time to sell my home? Should I sell it now or wait until next year? Should I sell now or wait until the market reaches it peak so I can get the most from my sale?
Now not everybody has the option of waiting to sell their home but if you do – don’t wait!
Why not? What would be the impact if I waited until the spring or next year? There could be several.
Rising Interest Rates
One, interest rates could rise. How does that affect you, if you are selling your home? It reduces the number of buyers who can afford your house. Every increase in interest rates reduces the amount borrower’s can borrow. Most buyer’s are limited by the debt-to-income ratio and can only spend a set amount of money per month on a home payment. A one percent increase in interest rates reduces the amount they can spend on a house by at least $35k.
Prices in Nashville are going up by an average of 8 to 10% a year. So again by waiting the number of buyers who can afford your home is reduced every month that you wait. A bigger pool of buyers results in a faster sale at a higher price, so don’t limit that number by waiting.
Now Is A Good Time
So many people are moving to Nashville that there are ready buyers any time of year so it no longer pays to wait until until a certain time of year. In fact, because many people still hold to that old belief of waiting until spring, the market will become much more competitive if you do wait.
Hoping For A Peak
I’m not waiting until spring, I’m waiting for the market to hit its peak so I can take advantage of the peak. Well if you’re going to move into assisted living or to a different city that might be a great idea, that is if you can wait for another 6 or 7 years. But if you plan on buying another house, right sizing in some way, that may not be a good idea.
Don’t Limit Your Choices
Again for several reasons, first as interest rates rise, your buying power will decrease. So you may need to buy less house than you hoped or move to another neighborhood or zip code to afford the house you want. Prices on other houses will also increase, possibly limiting your choices. You will be buying at the peak, instead of buying now and enjoying the appreciation of the market on your new home. It’s impossible to sell at the peak and get a steal on a new home in the same market.
If you’re considering selling your home some time in the near future, consider sooner than later; you will be able to take advantage of the current low interest rates and current prices to attract the biggest pool of buyers. Sell now to avoid the competition in the spring and sell now to benefit when you buy. Take advantage of the current low interest rates, current pricing and getting the most appreciation on your new home while the market is still growing.
Call me if you or someone you know is thinking of selling their home. I am glad to put these concepts down on paper so you can see the real impact of your decision to sell now. Timing is everything.