Over the past year or so I've had
several friends and clients ask me when they should sell. Let me be frank,
there is absolutely no way to perfectly time the market on either the buy or
the sell side. There are so many outside factors that could and should affect
your decision.
When You SHOULD Sell
The main factors that determine when
you absolutely should sell are personal in nature and are typically things out
of your own control and financial in nature.
· Death or Divorce:
Let's face it, these things happen. If there is a separation between you and
your spouse, either through death or divorce and it would be financially
unreasonable for you to continue making payments on your home, you should sell.
· Job Loss: Over the
past 4-5 years this has been a huge reason why people have had to sell their
home. When you know that paying your mortgage might come after trying to feed
your family, it's best to sell your home and get into a more affordable
situation.
· House Poor:
Times were great in the mid-2000's. You could get approved for anything. Maybe
you wanted that dream life with the huge dream home, and the bank said you
could afford it. Fast forward to the present. You have a monstrous house
payment that has kept you from funding retirement for yourself or funding your
children's education. You can barely scrape by after paying your mortgage
payment. It's not that you're poor, you just have too much house, and you're
house poor. Once again, it's best to sell and get into a better situation, and save
some sanity.
When You CAN Sell
There are plenty of reasons out
there that won't force you to sell your home as well. These factors aren't
dire, but will generally improve your quality of life after sale.
· Moving Up:
Got five kids and a 2 bedroom/1 bathroom home? Maybe you're looking to get out
of an unsafe neighborhood. If you're moving up, it's always a good time to
sell, simply because even if it's a buyer’s market, you can make up any losses
from the sale of your home, on the buy side. It's safe to move up when you can
afford a reasonable payment and when you're doing it for the right reasons.
· Moving Down:
Often moving down can be attributed to empty nesters and retirees. They want to
downsize because they just don't need the space anymore, and they want less
housework and yard work. This can dramatically improve quality of life and is a
perfect reason to sell.
· When Prices Are High:
If you've got a lot of equity and you're looking to make a move, obviously the
best time to make a move is when prices are high. When you sell, you can apply
some or all of that equity towards a new home and a better situation for you.
The best time of year to sell your
home (in Northern Colorado) is during the warm months from March through
September. Typically, the number of homes sold in July are twice that of
January. People are eager to take advantage of warm weather and the summer
break so they can easily change school districts for their children.
Like I said before, there is no great way to time the
market. If it feels right and your finances are in order, there's never a bad
time to increase your quality of life.
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