Homeowners faced with financial or personal problems sometimes sell their homes for the wrong reasons. The Truth is; the homeowner might have been better off, had they thought more about their situation and considered some alternatives.
That’s why before putting your house on the market it would pay to: think about why you are selling your home, consider the alternatives and carefully weigh-upthe pros and cons of selling. These 6 common reasons for selling a home will help you do just that:
REASONS FOR SELLING A HOME #1:
Expensive monthly mortgage interest loan payments on your home.
Alternative Solution: Refinance your current home loan.
Pros: If you have owned a home for several years and have not refinanced, you may be able to refinance the mortgage at lower interest rates and significantly reduce your monthly loan and/or interest payments.
Cons: Refinancing essentially resets the clock on your home loan. This may cost you money over a period of time, however it is worth doing some calculations.
REASONS FOR SELLING A HOME #2:
No money available to upgrade your existing home.
Alternative Solution: Refinance or consider applying for a home renovation loan.
Pros: Renovating and improving your home can increase the market value of your home. Renovating could prove to be a good investment for when you do decide to sell.
Cons: Increasing the value of your home may also increase the amount of property taxes you pay (depending on the laws in your country).
REASONS FOR SELLING A HOME #3:
Need more space than is available in your current home.
Alternative Solution: Consider remodeling your existing home rather than buying a new property. A more open-plan style may provide more living space. Consider enlarging, or adding a bedroom or bathroom to your existing home.
Pros: Remodeling should improve the resale value of your home. It will also save you real estate agent’s fees and other costs associated with moving house. You may need to use your home equity to finance the project.
Cons: Remodeling your home may mean an increase in the property taxes you pay. There is also the danger of over-improving your property. Some people fail to recoup their investment when they come to sell their home. So think carefully about what remodeling will (and will not) add to the value (or resale potential) of your home.
REASONS FOR SELLING A HOME #4:
Need less space than is in your current home.
Alternative Solution: Renting out part of your home could be an option. Alternatively you could rent out the entire house and buy a smaller house to live in.
Pros: If local property values are on the rise it might pay to not sell your home right now. By renting your home out you might gain some tax benefits and be able to claim rental expenses.
Cons: Becoming a landlord takes some work and can have its problems. You will need to find good tenants and keep the property in good renting order. You may need to consult a tax advisor, carry liability insurance and you will be required to keep good financial records for the property.
REASONS FOR SELLING A HOME #5:
Escalating costs of keeping your current home.
Alternative Solution: Again renting out part of your home could be an option. You could buy another house in a less expensive area.
Pros: If the property market is on the way up, your home might be worth holding on to as a longer-term investment. This is especially so if you are considering buying in a lower-priced neighborhood. By not selling you’ll also save on real estate costs.
Cons: You will need to be in a position to carry another home loan as well as your current mortgage. Also, by waiting to sell, you may be disadvantaged when the real estate market and prices level off.
REASONS FOR SELLING A HOME #6:
Change in your circumstances.
Alternative Solution: If you are experiencing major life changes you could consider selling your home at a later date.
Pros: Sudden illness, a family bereavement, or marriage breakup is stressful and can trigger a rethink in your position. Rather than be rushed into selling your home, it may be make more sense financially to hold-off selling right now. This is especially true if the real estate market is depressed. A marriage breakup could require you to refinance to pay off your partner’s share of the equity in the property.
Cons: If the real estate market is buoyant and near its peak, a delay may cost you dearly especially if there is a sudden downturn.
When selling a property, being in a state of indecision can be very frustrating and can cause needless stress. Not making a decision, or making the wrong decision, also has its downside. Think carefully about your reason for selling your home – think about the alternatives – then consider the pros and cons before you rush in and put your house on the market. And remember; regardless of your reason for wanting to sell your home, it usually pays to talk your ideas through with a financial advisor.
If, after these considerations, you’ve decided to sell your home and move to a new place, visit Busy Beez Movers for an easier and stress-free moving process.