Should I Sell My House Now?

As the housing market appears to be peaking, at least for now, a number of people are pondering whether or not to sell their home. But, answering should I sell my house is not a simple question.

Is Now the Right Time to Sell My House?

Let’s start from the beginning.

Assuming you only own one home, the one you live in, the question about whether or not to sell your house now is mostly moot.

You need your house to live in. You need it to be in a certain location so that you can go to work, your kids can go to good schools, or so that you are near all the things you love to see and do. Reading too much financial news and information is no different than spending all day consuming “news.” Either way, you develop a warped sense of the world around you. You start seeing your life as a series of financial transactions. I used to see this as a financial planner with people who were doing just fine but were giving themselves ulcers by constantly evaluating their lives through their bank accounts.

Your life is not a spreadsheet. Selling the place you live in is not about dollars and cents. Stop worrying about your balance sheet and increasing your net worth.

Should I Sell My House Now? 1

Selling Your Home

There is a funny quirk to selling your home that people sometimes don’t see. If you are selling your home in order to buy one in the same area, you can’t really win the home selling game.

In most areas, if home prices are high in your area where you want to sell, then prices are high nearby where you will buy as well. Likewise, falling prices in your area, likely means finding cheaper homes where you are moving as well. In this case, asking whether or not to sell your home is moot.

This doesn’t follow if you are moving to a new area, however, in this case, you would choose the right time to move to another place based upon your life, not based on the price of your house.

How To Profit Selling Your House Now

There is a way to sell your primary residence and come out ahead. You could sell your house now and move into a rental. Then, if you are right and housing prices fall, you would have your current home’s equity in cash. When prices are right, you can buy a lower priced home and make money.

Here is the catch. In most circumstances, house prices do not free fall. Most folks are just like you, living in the house they own. This limits the amount of inventory for sale, so prices falling takes time. You might have to live in the rental for two or three years. The big question becomes, “To what end?”

People make money selling their houses all the time. The house I bought for $345,000 almost 20 years ago recently sold for just over $1 million. That is a profit of over $600,000. Amazing, right?

Here’s the catch. We moved from the city to the suburbs. In those 20 years, the houses in our current neighborhood went from $200,000 to around $750,000. Notice anything?

In order to buy a house offering the lifestyle we wanted for our family, we made a fortune on our home sale, but then we had to spend a fortune to get our new house.

Did we make money? You bet we did, but that isn’t the question.

If we sold our house something like 3 years earlier, we probably could have sold it for around $700,000. That’s way less. But we could have bought our current house for around $500,000.

You see, we made money but not from timing our sale at a certain point. We made money by owning our house for a certain length of time. Unless you’re willing to exit the housing market with your sale, by renting or otherwise not buying another house, you will likely experience the same.

Determine why you want to sell your house and when it is best for your life, not when there is a peak market.

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