With most experts predicting additional declines in home values for the remainder of 2011, selling now may make the most sense. Here is a quick analysis of some things to consider if you are contemplating whether to sell in this market:
1. If you put your home on the market for 10% less than the other comparable homes in your neighborhood, you will likely sell in a few days rather than the typical 8 to 10 months that it has been taking in this market to sell. For illustration purposes, lets say the homes you are competing against are all listed at $500,000. If you list your home for $450,000, and sell it right away, you will have saved the expenses of carrying the property for the next 8-10 months.
2. If the market does in fact continue to decline , you will not be losing the additional equity in your home during this period. Remember, by being in the grouping of homes that are not selling (the $500,000 group), your home will sit and as those sellers in that group start to reduce their price, you will have no option but to follow suit.
3. The pool of qualified buyers for your home is very high right now. With mortgage rates at historically low levels, more buyers are able to qualify for mortgages. However, as the economy pulls out of the recession, the mortgage rates are sure to rise which will put further pressure on sellers to reduce prices to buyers.
The purpose of this analysis is to give you some “food for thought” as you decide on the proper move to take to accomplish your goal to sell your home. I do understand the anguish that this causes many of my clients who are faced with this decision. However, for those that have decided to take this approach, they have now moved on to the next stage of their lives in their new home (at a lower purchase price as well) and have gotten the benefit of the low mortgage rates on their new purchase.
So consider putting the “spotlight” on your home in this market. Doing so may prove to be your best strategy in this tough market.