Because the housing recovery depends on the economy’s consistent adding of jobs, it remains unlikely that home prices will increase within the next several years. That said, what is a seller to do?
Generally, there are two reasons why a seller sells his/her home:
1. The seller is under duress due to financial or personal hardship.
2. The seller’s needs change and the low cost of re-buying makes good money sense in such a market.
Sellers who stay informed of the current market conditions are more likely to make the best decisions for themselves and their families. There are as many options available to homeowners as there are circumstances. Here are some thoughts to consider while contemplating the possible sale of your home:
1. You have lived in your home for many years. It no longer meets your needs. You have a good deal of equity in the home and if you sell, you will be buying another home that does meet your needs.
If you find yourself in this category, you are very lucky in deed. No matter what the market price is for your home, as long as you make a purchase in the same market, the “hit” will be across the board. Folks refer to this transaction as a “wash”.
2. Your home no longer meets your needs and although you can afford the mortgage you have little to no equity in the home. Contact a professional Realtor and a qualified lender for advice on how to move forward.
3. You can not afford to pay the mortgage and the bank is at the door. You may be eligible for a loan modification. (Be very careful with this one. Scams are widespread and one “red flag” to avoid according to Fox News Contributor Attorney Bob Massi is when any “promise” is made to reduce the principle. It is not done.). You may also be eligible for a short sale wherein the bank agrees to accept less than what is owed on the mortgage because the home is no longer worth the full amount. Contact a professional Realtor who is experienced in short sales.
4. Your home no longer meets your needs and you are considering putting it on the rental market rather than selling it in a buyer’s market. The key question with renting vs selling is “what is your motivation?” If you wish to rent it out now and sell it “when the market comes back”, the unknown is “when”. You will have to do the numbers that involve the carrying costs of the property through the years of uncertainty against the amount of rent that you would be able to receive to offset your debt. You may also wish to ask as many landlords as you can find about their experiences.
5.Your home no longer meets your needs but you think you should just tough it out until the market “comes back”. Once again, the key is “when” you can sell your home for an amount of money that is acceptable to you. Real Trends publisher Steve Murray, a well known economic authority on real estate trends reports that a home purchased in 2005 (the height of the market) will not be worth that purchase price again until approximately 2018. These figures are based on the long road back through joblessness and historic national debt that is increasing by the moment.
There are some truths that remain clear to those who practice in the Real Estate industry. Every home sells at the right price and time. Everybody needs a place to live. The buyers are buying and the banks are lending. The July/2010 report that showed homes sales at their lowest number in 15 years had more to do with the fact that the April tax credit deadline prompted buyers to act more quickly thus lowering their numbers for July.
What is a seller to do? Keep informed and do not be afraid of this market. It is the lack of understanding that may cost you dearly. Your professional Realtor is your best defense against jeopardizing your assets in a market that does not reward gamblers or lightweights. Good Luck!