Finding the Right Time to get Your Home Sold
“Are we going to miss the market? We’re afraid we are not going to get top-dollar for our home.” Those were the remarks from a concerned client about listing her home toward the end of summer, rather than the beginning of summer, or even worse… fall. You see, this homeowner had heard the old rhetoric that listing your home in early summer results in a higher sales price and gets your home sold faster than any other time.
Seems like a valid point. Traditionally, more people are shopping for homes in the summer. The kids are out of school, the weather is better, the days are longer; it seems to be the perfect storm. Some reports say that listing your home in May, therefore selling it in June or July, can result in sales prices 1% to 2% higher. Combine that with a report that says homes can sell 15% faster this time of year, it seems like a no-brainer to list in May.
Well, hang on a second.
Getting “Top-dollar” may be Expensive
There are many factors to consider when the best time to sell your home may be. Let’s took a look at few and discover why sometimes May, may not be the best time to list your home.
Let’s say it’s December, supposedly one of the worst months to list your home. You are thinking about holding off putting your home on the market and listing your home in May to get top dollar. Meanwhile, you continue to pay on your mortgage, making monthly payments. Let’s pretend that each month you are paying, on average, $750 in interest on your home each month. December, January, February, March, April, May. 6 months. 6 X $750 = $4,500.
Now, let’s say that you can sell your home at $275,000 dollars in December. 1% higher in May puts it at $277,550.
You would have spent $4500 to make $2750. In other words, you lost $1750 by waiting for that magic month of May.
Now, every scenario is different, and of course my example above is generic.
More Math (Because we all Love Math)
Let’s just say you own your home outright. No mortgage. Great! You wait until May to list your home to realize that $2750 gain. Shoot, let’s even pretend in your market that home prices experienced a bit of a surge, and you can even list for $3500 more in May vs. December. Awesome!
But once you get ready to list your home, chances are, you are looking for another home to buy. And let’s just say you are looking for something a little newer, a little bigger, and a little more expensive than your current home. In real estate, we often refer to this as “buying up.”
As you look for newer homes, you discover that your price is going to be somewhere around $350,000. Well, guess what? That home (or similar home) is going to get top dollar in summer too. Go figure. It can sell for $350,000 now, but possibly 1% higher in June or July. So that adds $3500 to the sales price. Factor in a surging market, maybe the newer home can go for even above asking price bringing the sales price to $355,000. Now you are paying more for your new home than you would have several months prior, so you aren’t gaining much by waiting in this case either.
Conclusion: Depending on your situation, May could be the best time to list your home, but it might not be.
Here are some other things to consider when deciding the right time to list your home.
The condition of the home: An immaculate home in December might sell quicker than a fixer-upper in May.
The timing for you: Job transfer? Growing family? A major life event such as a divorce, death in the family, marriage, job promotion – the list can go on and on.
Climate and geography: Listing in the winter in St. Paul in 2 feet of snow may have it’s challenges. Listing in the winter in San Diego might not have as much. In central Washington sometimes the weather slows us down, other times it’s not much of an issue.
Seller’s market/Buyer’s market: Obviously, a seller’s market is ideal. When inventory is low and home prices are up, it makes sense to sell. However, in a seller’s market, you may be buying a home in that same market. You can get top-dollar for your home, but you may be paying top dollar for your next home.
So, when should you list your home?
Clearly, the best time to list your home is September. Just kidding. The truth is, each situation is different. The time to list your home is when the time is right for you. There are many things to consider. It takes a little more than doing a Google search for “the best time to sell a house” and then coming to the conclusion that summer is the best time.
Remember, the examples I presented above (along with the math) are generic. If you are looking to sell your home, contact your Realtor to weigh ALL things in your situation.
Don’t have a Realtor? Call me. – Glen
P.S. The clients I was talking about in the first paragraph? We anticipated listing their home in June or July. We hit a couple of snags and ended up having to wait until September to list it. Due to our market conditions at the time, we ended up actually increasing the price when it was listed. It sold in less than a week.