We can see that values and prices of real estate is up in Lake County and across the state. Prices are at a level that we haven’t seen since the decline nearly a decade ago. Inventory, or the lack of it, is now driving the market. The latest data from the National Association of Realtors shows that 46 percent of recently sold properties spent less than a month on the market.
Of course, the decision of when to sell your home isn’t entirely based on the market conditions, you have to take your personal situation into account.
Start by taking a hard look at your finances. If you’ve paid off all your nonmortgage debt and have three to six months of expenses in your emergency fund, that’s a good sign you’re financially mature enough to purchase a home again.
Even if you bought a home just before the bubble bust in 2006 most homes have a positive equity. To make sure of this I recommend that you ask your Realtor to run a free comparative market analysis (CMA) to determine an approximate value for your home. It is worth selling you home if you can provide at least 20 percent equity for your next purchase. Why 20 percent? If you put 20 percent down, you won’t have to pay private mortgage insurance (PMI) which will save you hundreds of dollars a year.
Another reason to buy or sell is that you home will no longer meet your everyday needs. Perhaps you need an extra bedroom or two for your growing family or maybe your kids have moved out and you are ready to downsize. Empty nesters can really take advantage of this, selling a large home and paying cash for a smaller one and investing the rest in your retirement.
When you’re sizing up or down, make sure your mortgage fits your budget. It is recommended that you keep your monthly payment less than 25 percent of your take-home pay on a 15 year fixed-rate mortgage.
There’s no single formula for determining when to sell your home. Team up with a Realtor you can trust to provide honest advice so you can do what’s best for you and your budget. A good agent puts service before sales and knows how to get things done when it’s time to sell.
Ray Perry is the Realtor of the Year for 2013 and works for CPS Country Air Properties. He can be reached at (707) 277-8000.
