10 signs it’s time to sell your home

black and blue backpack on brown wooden table

Here’s how to know you’re ready to sell your home and buy a new one.

Have you been daydreaming about your next house or browsing online listings lately? It might be time for you to move. But before you put your home on the market, make sure you’re ready to sell.

There are several important factors to consider, including market conditions, your housing needs, and your financial situation. In this article, you’ll learn 10 clear signs it’s time to sell your home.

Points to remember

  • Consider your needs 

You might need more or less space or less upkeep. Perhaps living expenses in your area are too high now—or a new job has opened up better opportunities for you somewhere else.

  • Consider the market 

Housing prices and mortgage interest rates are fluid and may indicate it’s time to move on. It’s best to sell when the market is in your favor.

  • Think about your financial situation 

You want to have enough equity in your current house to cover expenses. Check your debt-to-income ratio, too.

How do you know it’s time to sell your home?

As stressful as moving is, it’s a necessary process for many people. Every year, 31 million Americans move, according to U.S. Census data. Many people sell their homes and move due to a new job, a new marriage, having a baby, or health challenges.

So how do you know if you’re ready to take the plunge? Here are 10 signs it’s time to sell your home.

white window curtain on window
Depending on your needs, a remodel might save you money in the long run instead of selling, but do the math and compare costs first

Your current house is too small or too big for you

If you find yourself needing a bigger house, you’re not alone. A Neighbor survey revealed that as many as 1 in 4 Americans outgrow their homes within two years. It’s common for new couples to move into a small home only to realize two kids later that they need more space.

Or maybe you need to downsize. If all your kids have moved out, you probably don’t need as much room anymore. A smaller home allows empty nesters to spend less time on cleaning and maintenance as well as save money on living expenses.

The market is in your favor

Homes tend to sell more quickly and at higher prices in a seller’s market. Most areas have been a seller’s market since 2020, and it seems that trend will continue for a while.

Don’t rely on nationwide data alone, though. Make sure your local market is doing well, too. Look at recent sale prices for houses in your area. Are those sales higher than in previous years?

Next, call a local real estate agent and ask them to do a free home evaluation for you. They’ll help you determine a realistic list price and come up with a strong selling strategy.

Mortgage interest rates are low. 

If you sell and don’t plan on renting, you’ll need to buy another home. The best time to buy is when interest rates are low.

Lower interest rates can save you a lot of money over time. Even 1% can make a big difference. For example, if you take out a 30-year loan of $300,000 with a 3% interest rate, you’ll end up paying $155,332.36 in interest over the life of your loan. But if that rate is 4%, your overall interest payments will be much higher: $215,608.52.

Thankfully, in 2020 and 2021, 30-year mortgage fixed interest rates in the U.S. hit all-time lows, according to FRED Economic Data. As we move into 2022, rates appear to be increasing—but only slightly. They’re still low compared to pre-pandemic years. That means now is still a great time to put your home up for sale and buy a new one.

You have equity in your home

You don’t want to pay seller costs out of pocket, so make sure you have enough equity in your home to cover expenses.

Equity is what your home is worth minus the debt you owe on it. For example, if your home is worth $450,000 and your mortgage balance is $340,000, you have $110,000 of equity. As housing prices go up, a homeowner’s equity goes up, too.

The rule of thumb is to wait five years before you sell. But as long as you have enough to cover closing costs and your next down payment, that’s a good indicator that it’s time to sell your home.

Your home doesn’t need too many repairs

Do you take good care of your home? Houses in great condition sell better than those in disrepair. If you’ve been keeping up with maintenance, your home is probably in good condition.

To get your home ready for sale, you should only have to do minor touch-ups like painting, fixing nicked doors or cabinets, cleaning carpet stains, and maybe some landscaping. But if your home has major damage—like a leaky roof, faulty plumbing, or a cracked foundation—then you should fix those problems before putting your home on the market.

Don’t rush this process or list your home before it’s ready. You might manage to get an offer, but if a home inspection uncovers major problems, the buyer can easily back out of the deal. This wastes your time and the buyer’s.

You have to relocate

What if you love your home but still have to move? That’s a common situation, too. There are many reasons you might have to relocate:

  • You got a new job in a different area
  • Your health requires you to move to an area with a different climate
  • You need to take care of aging parents
  • Your kids are nearing school age and there are no good schools nearby
  • Living expenses have become too high in your area

In these cases, it’s important to prepare emotionally for the selling process, especially if you’ve grown fond of your current home.

Relocation can seem scary because so much is unknown. Get in touch with a local real estate agent in the area where you plan to live. They’ll help you understand the housing market there and give you an idea of what the community is like.

woman in gray shirt sitting on brown wooden floor
Make sure that, when you sell, it’s a seller’s market and that you’re sure you can absorb the costs of a new home

Your finances are healthy

Can you afford to move? Don’t rely on equity alone. Make sure you have enough liquid cash to cover repairs to your current home, moving expenses, and two mortgages if you decide to buy before you sell.

Do you need to pay off any debt before selling? Check your debt-to-income ratio, which is your monthly debt payments divided by your monthly income. The lower that number is, the better chance you have of getting a loan at a low interest rate. Ideally, mortgage lenders look for a debt-to-income ratio of 36% or less, and only about 28% should be your mortgage.

Check your credit score, too. In general, you’ll need a score of at least 620 to qualify for a conventional mortgage. If your score is 760 or higher, you’re more likely to get a low interest rate.

A renovation wouldn’t increase your home’s value

If you need more living space, it might be more financially feasible to renovate instead of sell. But  do your research. Calculate the cost and then see how much those renovations will increase your home’s value.

Here are some renovations that increase home value:

  • Adding an extra room (especially a bedroom or bathroom)
  • Upgrading the kitchen
  • Remodeling the bathroom
  • Adding stone veneer to the front of your home
  • Upgrading your garage door

Be careful not to go over budget. It’s fun to improve your home, but if you spend too much money, you won’t get the return you want.

You’re struggling to keep up with maintenance

The bigger or older your home, the harder it is to take care of it. And if you’re too busy to handle the maintenance yourself, you may need to hire someone. Unfortunately, outsourcing can get expensive quickly.

The average cost to maintain a home in the U.S. is around $16,000 per year, according to a survey by Porch. That includes expenses such as:

  • Regular lawn care (maintaining, aerating, and fertilizing)
  • Roof repairs or replacement
  • Pool cleaning
  • Power-washing the desk, driveway, fence, and house
  • Toilet repair
  • Plumbing checks and repairs
  • Sink or shower drain repair
  • Upkeep and repair of HVAC and other appliances
  • Water filter system replacement
  • Pest control

If maintenance and repairs are draining your energy or bank account, it’s probably time to sell your home.

You’re craving new scenery

Moving isn’t always driven by necessity. Maybe you hate bitter winters and dream of living in a state with a sunnier climate. Perhaps you’re sick of the loud, busy city. Or maybe you’re concerned about the crime rate in your area. Those are all valid reasons for moving. 

As many as 1 in 10 Americans move because of crime, weather, or even traffic, according to a Wakefield Research survey. It’s okay to sell your home and move simply because you want to.

Summing it up 

Moving can be a scary and stressful decision, especially if you’re not sure you’re ready to sell. But if your housing needs have changed, the market is in your favor, and your finances are stable, you may want to sell in the near future.

Before you put your home on the market, though, get in touch with an experienced real estate agent in your area. They’ll tell you how to prepare your home to sell and help you get top dollar for it. Flyhomes can even help you to buy your next home before you ever have to sell your current one. After all, the best way to avoid common mistakes when selling your house is by relying on real estate experts who know the market.

FAQ

Is 2022 a good year to sell my house?

So far in 2022, home prices are continuing to rise and mortgage interest rates are still low. This indicates it’s a great time to sell your house and buy a new one. Remember, research your local market and the area where you plan to buy before making a decision.

How much equity should I have before selling?

You want at least enough equity to pay off your selling costs. Ideally, you should have enough to cover your next down payment, moving expenses, and possibly two mortgages until your home sells.

How do you know if your house is ready to sell?

If you have positive equity in your home and it doesn’t need major repairs, your home is likely ready to sell. Before you list your home, hire a professional to do an inspection to check for any major issues that would cause a potential buyer to retract their offer.

About the author: Jenny Rose Spaudo is a content strategist and copywriter specializing in real estate, PropTech, and investing. She’s written for Business Insider, PropStream, Edward Jones, and more. Visit her website at jennyrosespaudo.com and connect with her on LinkedIn.

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