When you first buy your home, you might not be thinking about selling it in the future. However, as changes occur in your life, you might need or want to sell your home. Whether you’re looking to turn a profit on a home you’ve bought or simply want to sell it so you can purchase a different one, you might ask yourself and your mortgage lender, when is the best time to sell your home?
You might also ask yourself, how long should I live in my home before I sell it? Our team of Dallas mortgage lenders has put together this list of reasons you might want to sell your home and tips on the best time to sell it.
Reasons to Sell Your Dallas, Texas, Home
Reasons you might want to sell your Dallas-area home include:
You Need a Bigger or Smaller Home
As your family grows, you might need to consider a bigger home to accommodate everyone. When the kids leave for college or get married on the other hand, you might want to downsize. Finding the best mortgage lenders in Dallas can help your new homebuying process go smoothly.
Moving Across Town
Sometimes you want to move to a different part of the Dallas area, maybe to a new neighborhood or out to the country to get away from the hustle and bustle of the city. Before making your move, ensure you understand the current housing market trends, and speak to a local mortgage lender to see if the time is right to sell your home and buy a new one.
It’s a Seller’s Market
When the market is hot and buyers are looking in your area, consider selling your home to get top dollar for it. This is a good reason to sell, especially if your home has appreciated and are interested in moving into a smaller home or a different area.
How To Know if It’s a Good Time To Sell Your Dallas Home
There’s no definitive answer regarding the best time to sell your home. However, the following reasons are good indicators that you might want to put your home on the market.
When You Have Equity in Your Home
Equity is the monetary difference between the home’s market value and what you still owe your mortgage lender. Some lenders believe it takes about five years for the home to appreciate enough and for you to build equity in it to offset the financial costs of selling and buying a new home. Historically, most homes have appreciated 3% to 5% annually.
Comparable Houses Are Selling at High Prices
If you can wait to sell your home until the market conditions are in your favor, you’ll gain financially. You can do your own research to find the comparable values of your neighborhood or save time and effort by working with a local real estate agent or mortgage lender who can pull the list for you.
Houses in Your Area Are in High Demand
A good sign it’s the best time to sell your home is that housing sales have increased in your Dallas neighborhood and buyers are eager to look at your home. With the right market conditions, a fair price, and curbside appeal, you have the opportunity to sell your home quickly and at market price.
Financial Considerations Before Selling Your Home
While the thought of selling your home and buying a new one might be exciting, you’ll want to consider other associated costs, such as:
Repairs
Most homes will need some type of repair or renovation to get them ready for market. As you plan your budget for selling your old home and buying a new one, set aside funds for repairs such as fixing leaking faucets, replacing the roof, painting the walls or cabinets, having the carpets cleaned, and sprucing up the landscaping.
Closing Costs
When you buy a new home, you pay closing costs. These are fees you must pay to process your mortgage loan. While these fees can vary, put aside about 2% to 6% of your new loan amount to cover closing costs.
Capital Gains Tax
The Internal Revenue Service (IRS) imposes a capital gains tax on anything you sell that garners a profit, including the sale of your home. If you sell your home for more than you bought it for, expect to pay capital gains tax. However, if you have made the home your primary residence for more than two years, you might be able to avoid paying capital gains taxes. The IRS has certain exemptions for paying capital gains taxes, so talk with your mortgage lender to see if you qualify for these exemptions.
Down Payment for the New Home
Set aside enough money for a down payment on your new home. Some lenders will allow for a small down payment of 3%. However, you must put down 20% of the asking price to avoid paying private mortgage insurance.
Understand Your Mortgage Options and Plan Accordingly
To make the selling and buying process go smoothly, find the best Dallas, Texas, mortgage lenders who can help you find the loan that works best for your situation. Ask your mortgage lender how to get the best interest rates, if you’ll face prepayment penalties, and whether you can get discount points. You’ll want to work with a mortgage lender who is open and communicative about any fees associated with selling your old home and costs incurred when buying your new home.
If you’d like to learn more about the best time to sell your home, contact our professional Dallas, Texas, mortgage lenders at the Tuttle Group. When you’re ready to move into a new home, we can help you find the perfect conventional loan to fit your budget and needs. Contact us today to get started on your loan and new homebuying process.
