Is It Time to Sell? Five Things to Consider
Is it time to sell? Whether you have been in your home for months or years, timing the sale with market trends is key!
1.EQUITY
If maximizing your profit is the goal, your home’s equity is the most important factor before selling. Simply put, equity is the difference between market value and what you actually owe on your current mortgage. The greater the principal payment, the greater the equity…you may have more equity in your home than you think! Recently I helped a couple in St. Louis Park capture $75,000 in equity they didn’t know they had.
2: CAPITAL GAINS TAX
Capital gains are a tax on the sale of a real estate asset. Short-term and long-term capital gains taxes and short-term capital gains refer to holding the home for less than one year. Fun fact: the individual capital gains tax exclusion for 2021 is $250,000 on actual real estate gain or $500,000 for a married couple. Tax rates are fluid and seemingly ever-changing, so make sure to consult your CPA or tax attorney before making any final sale decisions.
3: MARKET CONDITIONS
Another thing to consider is the current market conditions, which will make a significant difference if you’re looking to make a profit on your home. If you are considering selling in a seller’s market, things may be in your favor. Multiple offers are the new norm in our current market!
4: CURRENT FINANCIAL SITUATION
There are many costs and numbers to consider when deciding to sell your home - closing costs, moving costs, taxes, interest rates, and other fees. Sometimes you have to spend money to make money :) Whether you’re remodeling a bathroom, updating a kitchen, or painting bedroom walls, keeping these costs at a minimum is an important piece to improving your financial situation. Afterall, we’re trying to make you the most money from your biggest investment = home, sweet home.
5: WHERE TO BUY NEXT?
Downsizing!? Upsizing!? Rightsizing!? As great as it is to be a seller in this market, most sellers become buyers… Remember your “ii’s” = Interest Rates and Real Estate Inventory. Both are at historic lows, and the competition is fierce. Stay tuned to next month’s topic: 5 Things to (re)consider when buying a home.
Frankly, there hasn’t been a time like our current market to sell (at top dollar) and turn around and capture historically low-interest rates on the buy-side in over 20 years! If you are considering selling, it’s truly a great time! Fill out my seller’s profile here; I’d love to give you a free market analysis of the value of your home.
