How to Assess Your Situation when Selling Your Home

Everything starts with assessing your current situation. You should first question yourself whether or not selling is the best option for you. If at the moment, home sales are really slow, you can wait for a better time. You can also choose to rent out your home for the time being. On the other hand, if you still want to live within your neighborhood, maybe you can choose to just upgrade your house and stay.


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    Determine if you really need to sell your house: When it comes to many things, including selling your home, you should determine whether you ‘want’ or ‘need’ to do it. A lot of people decide to sell their home because they want something new and not because they need to. Are you ready to spend money, energy, and time to sell your home, move, and buy a new house all over again?
    • Expect that you’ll have to spend up to 15% or higher of the current value of your home.
    • Consider the amount of money that you still have to pay on your mortgage. A big portion of your equity will be eaten up.
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    List your long-term goals: Since selling your current place is a huge decision, you should keep your priorities in check. Ask yourself where you want to be in life in the next 5 - 10 years. Also, know how your current house is relevant or not with your needs as well as goals in life.
    • You should list all your goals especially if you are looking forward to gaining financial stability. If this is the case, this might not be the best time to sell or remodel.
    • Know whether selling or remodeling is the best option For instance, if you want to sell your home simply because you are no longer happy with its size or features, you might want to consider cheaper home improvement solutions.
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    Learn if capital gains tax is applicable to you: When you get a huge profit out of selling your house, you have to pay capital gains tax. If you have been at your home for 2-5 years, then you might not have to pay capital gains tax. Otherwise, you might have to pay early mortgage payoff penalties as well as capital gains tax. It might be a foolish financial decision to sell your home if you consider these two huge bills. Always consult with a tax advisor about your tax situation.
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    Calculate the amount of money that you’ll have to spend for the repair and improvement of your home: If you want to get the most value out of your home, you’ll have to spend money to upgrade it. Use your money wisely by choosing certain home projects that will give the most appeal to your home. Make an estimate of the amount that you’ll have to pay for the contractors and supplies.
    • Don’t forget important fixes and necessary hardware updates. You will be able to attract more buyers if you apply green upgrades at your home. Don’t forget to use your tax breaks which will let you save some money while beautifying your home.
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    Calculate what you need to spend in selling and moving: Approximately 7-10% of a house’s sale price is spent in closing costs that include the following:
    • Commissions of real estate agents, home inspections done by professionals, prorated property taxes, and transfer taxes
    • Also consider expenses for staging and marketing, mortgage payoff penalties, capital gains tax, and moving expenses
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    Calculate purchasing expenses: When you calculate everything that you need to spend, you’ll also have to consider the money that you’ll have to use in buying a new home and moving all your stuff to it. Thoroughly research if you want to move out of your current location so you could go to a new neighborhood, job or city.
    • Research about prices of homes, cost of living, crime rate, and other important information about the place where you intend to transfer.

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Categories: Sales