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Make it a Money Decision
Your home is an investment and part of your financial portfolio. If you are selling your home to buy a more expensive house with a better view, consider whether the view is worth the cost of selling and moving, and the percentage of equity you'll lose going from your current home to the new house. If the market is appreciating, you may easily absorb the costs of selling and moving, and it could turn out to be an excellent investment. If it is the house of your dreams, money may just not matter. As with any investment, consider it carefully.
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Selling With a Second Mortgage
If you've taken out a home equity loan or second mortgage on your home, you may have to bring money to the closing in order to satisfy both loan obligations. Unless you have lots of extra cash on hand, this is not the ideal situation in which to sell. If you can afford to wait, consult your accountant or real estate attorney to determine a better time to sell. Otherwise, do all you can to boost your home's value without spending a lot of money. |
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No homeowner wants to be forced into a sale, but it does happen: People get transferred, relocate to a work for another company, or lose their jobs entirely. Couples split up and sell the house as part of the settlement. Growing families often dictate new housing choices, such as moving from a two-bedroom condominium in the city to a single-family home in the suburbs.
Deciding to sell your home can be an emotionally wrenching experience-and if you're not careful, a financially devastating one. If you have a choice in the decision, examine all your options before you jump into the market. |
Reasons to Sell
Some common reasons to sell your home include: |
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A job change
If you take a job in a new city, you may have to sell in order to purchase another home. If your new job is in another part of the same city, moving might save commute time, gas, and wear and tear on your car. |
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Space requirements
If the size of your household is changing, your need for space also will change. When you need less space, selling is a practical option. But if you need more space, consider building an addition. If remodeling is impractical or too expensive, selling may be your best option. |
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A change in marital status
If you are getting divorced or were recently widowed, you may need to sell your home as part of a settlement. Consult a lawyer or accountant and examine your options. |
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Equity
If you have substantial equity, selling your home may be a way of cashing in on your investment, especially if you are moving to a less expensive area. |
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Great timing
If the housing market is hot and you plan to move to a less expensive area, you may make money on your sale even if you've lived in your home only a short time. |
Reasons to Stay
Some examples of reasons to stay in your current home are: |
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Tight finances
If you're barely able to make your current mortgage payment, you may be overwhelmed by relocation and commission costs (plus the possible increase in your monthly loan payment), even if you make a profit on your current home. Consider refinancing your current home instead of selling. |
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An unsure destination
If you don't know where you want to move, think about staying put for the time being. You'll build equity by continuing to pay your current mortgage. You'll also avoid the cost of moving twice-once when you have to vacate your current home and again when you decide where you want to live. |
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The remodeling option
The neighborhood is homey, the schools good, but you just don't like your house? Consider making it more appealing: If you have owned the home for several years, you may have enough equity to do some serious remodeling. |
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Bad timing
If the housing market is weak, you may lose a large percentage of what you've paid into your home. The real estate market is cyclical, and it could be better to wait until conditions are in your favor. |
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The Seller's Frame of Mind
Once you decide to sell, your first step is to emotionally detach yourself from the house and treat it as a commodity. This means facing the pricing issue head-on. Get a comparative market analysis and examine your home's assets compared to othe |
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