Owning your own home is the dream of many Americans, but it doesn’t always work out perfectly. People rarely live in the same home their entire life, as there are many factors that could cause you to move. Perhaps you have just taken a new job in a new location, or maybe your family has outgrown your current home. Regardless of the reason, you’ll likely come across a time where you’ll need to sell your home. However, selling a house can be expensive and has some costs associated with it. So how can you tell if you can bear the costs of selling a house?
What’s the Market Like?
One of the first things you should be concerned about when selling a home is the state of the market. In order to answer this, you’re going to have to do some research on the surrounding area. What’s the local economy like? Is the unemployment rate low and do people have a lot of disposable income? If the answer to both of those questions is yes, then your house has an increased likelihood that it will sell quickly and for a lot of money. You also need to look at similar houses in the local area. How much do they sell for? You can use these similar houses as a basis for how much your home will demand, keying you in on whether you can afford your home or not. The type of market you’re selling your home in has a major effect on whether you can afford to sell your house.
How Much Do You Owe?
Another important part of determining if you can afford to sell your home or not is how much you still owe on it. The general rule of thumb is that you should never sell your property if you owe more on it than the property is actually valued at. There is even more truth to this when you’re in a rough financial situation and don’t have that much extra money. As a result, the less you still owe on your home, the more likely that you’ll be able to afford to sell it.
Can You Renovate?
An important question you need to ask yourself when selling your home is whether you’ll be able to afford renovations. Homes can rarely be sold in the state that they are in, and if they are then their value will greatly tank. As a result, you will likely need to put some money down in order to spruce up your home and make it more attractive to buyers. Renovation costs can vary, but they usually cost a few thousand dollars. If you currently don’t have that type of disposable income to spend on renovations, then you’re going to either have to wait to sell your home or sell it at a lower value.
Are You Struggling?
If you’re someone who’s currently struggling to make ends meet, then it may be time to sell your home and downsize a little. If you spend a large chunk of your income paying off your mortgage and other home expenses, then you should probably sell your home. Living in a nice home but struggling with money is known as being house poor, an undesirable state of financial existence. If this sounds like you, then you should attempt to see what you can get for your home on the open market. By doing this, you can use the money from your sale to cover costs and can purchase a cheaper home that won’t cause you to drown in mortgage payments and other fees.