The decision to put your home on the market shouldn't be made in haste, but it also can't be dragged out. Economic uncertainty and rising mortgage rates are causing potential home sellers to flip flop in their decision making. And being non-committal to the process will hurt the selling price.
"It has become more commonplace for homeowners to put their homes on the market, but choose not to make the updates or repairs likely needed to more easily sell the home," says Rob Pajon, vice president of product and marketing at real estate company USRES/RES.NET. "In some cases, people are still unsure of whether selling is the right decision and might be emotionally attached to the home, which makes investing in major changes difficult."
There's no set formula to decide if you are ready to hang the "for sale" sign, but experts identify four signs that hint it's time:
You Have a Game Plan: Serious sellers typically have an idea of where their next home is going to be located. "Having a game plan, at least generally, as to where your replacement home will be, greatly helps determine the future," says Leslie Piper, consumer housing specialist for Realtor.com. A game plan "is a motivating factor to some sellers."
What's more, having a general idea of the next neighborhood hinges on having an estimated listing price of how much home you can afford. You don't want to find yourself in a situation where you sell your house and can't afford the new one, or you can't secure a mortgage because you don't have a large enough down payment.
You're No Longer Emotionally Attached to Home: "If you have any emotions about the home, you are really not ready to sell," says Brendon DeSimone, Zillow's real estate expert. "If you are still connected to it, you are not going to listen to your Realtor and you are not going to do what it takes to sell."
Sellers have to view their home as a product, no longer their home, he says.
You are Financially Ready to Make the Leap: Sellers ready to hit the market have usually perused real estate listing websites, checked out mortgage calculators and, in some cases, been pre-approved for a new mortgage.
"The first sign that homeowners are ready to sell is that they are financially ready," says Pajon. "The next sign is that they evaluate and determine they are financially prepared for the costs associated with purchasing a new home: taking into account the down payment, closing costs and moving expenses."
You are Ready to Make Changes: Sellers who are still emotionally attached to a home will likely resist major changes or upgrades, whether it's a new paint color or kitchen upgrades, which could compromise asking price and a quick sale.
"Nowadays, sellers have to invest the time and energy to do a little renovating," says DeSimone. "If you are not investing the time or energy to get it done then you really aren't ready."
MOST POPULAR HOME RENOVATIONS:
10 Most Popular Renovations Buyers Will Pay More For
You Know You're Ready to Sell Your Home When ...
Pct. of home buyers willing to pay more: 40% Amount willing to pay extra: $1,400
Some 40% of homebuyers without a fireplace said they would spend additional money for at least one and cough up an extra $1,400. The fireplace, while always popular, was less necessary when several TVs were going in the house all at once, Samuelson said. But he speculated that having a home with fireplaces may become more popular in the future as people spend less time watching TV and more time on tablets and e-readers. These people may find the fireplace a good place to cozy up and use their devices, he said.
Pct. of home buyers willing to pay more: 40% Amount willing to pay extra: $1,770
The people who are most interested in an eat-in kitchen tend to be in the 35 to 54 age range, with 30% of those prospective home buyers indicating this is “very important” in a house. Meanwhile, just 21% of those under 35 years of age and 20% over 55 feel the same way. More people, especially those who are raising families, want kitchens that look into family entertainment rooms. Some have even made it a family hangout by placing big-screen TVs and other electronics in the kitchen. “Buyers who are in families want to be in one space and do it all,” DeSimone said.
Pct. of home buyers willing to pay more: 41% Amount willing to pay extra: $1,850
Like most features, stainless steel appliances are most important to people between the ages of 35 to 54, with 23% considering them to be a “very important” investment, compared with just 16% of those under the age of 35 and a mere 11% of those over the age of 55. From a cost perspective, stainless steel appliances are not necessarily the best investment. Samuelson noted that stainless steel wears out far easier than most other common materials. Also, the children in the house can also get their fingerprints on the appliances, requiring more cleaning. However, Samuelson said people are primarily driven to buy stainless steel appliances because they look more attractive.
Pct. of home buyers willing to pay more: 48% Amount willing to pay extra: $1,370
Kitchen islands are most important to people ages 35 to 54, with 24% of them indicating that it is a “very important” characteristic. Just 19% of people under 35 and 13% over 55 considered this feature important. DeSimone noted that kitchen islands often come in handy for those who are raising a family. It provides additional room to put out food for the family and allows the kitchen to become more organized. Although the desire for a kitchen island is high, those who do not have one but want one are only willing to shell out $1,370, less than most other features.
Pct. of home buyers willing to pay more: 49% Amount willing to pay extra: $2,030
Once again, the ensuite master bathroom tends to be more important to people ages 35 and older. “It kind of goes to the ‘home is my sanctuary’ mentality,” Samuelson said. This, along with a walk-in closet in the master bedroom, has become more important in the past 10 years or so. Many people are eager to make their bathroom more “homey” by doing things such as installing televisions on the wall. The fact that many master bathrooms have two sinks is also an appealing option for married couples, Samuelson added.
Pct. of home buyers willing to pay more: 54% Amount willing to pay extra: $2,080
Some 25% of buyers under the age of 35, and 28% of those between 35 and 54, considered hardwood floors “very important” when looking for a home. Only 17% of people ages 55 and up felt the same way. In previous generations, homes with carpets were considered better in order to conserve energy, DeSimone said. Even today, older people are more likely to feel more comfortable with carpeting because the insulation makes the home a little bit warmer. But for younger people looking to have many guests at the house and for people with children, hardwood floors are desirable because they are easier to clean than carpets.
Pct. of home buyers willing to pay more: 55% Amount willing to pay extra: $1,620
Among homeowners between the ages of 35 and 54, 24% viewed granite countertops as “very important,” compared to 18% of people under 35 and 18% of people over 55. Although just one in every five prospective home buyers said granite countertops were very important, 55% of those who bought a home without such a countertop said they would pay extra for it. Both DeSimone and Samuelson agreed that the granite countertop is more of a style issue than anything else. “There has been more emphasis on the beautiful kitchen these days, and granite countertops are a part of that,” Samuelson said.
Pct. of home buyers willing to pay more: 60% Amount willing to pay extra: $1,350
A whopping 60% of homeowners were willing to pay extra for a walk-in closet in the master bedroom, with 44% of people between the ages of 35-54 viewing this feature as “very important,” compared to just 35% under the age of 35 and 36% of people 55 and older. DeSimone said the walk-in closet is desired for two main reasons: space and status. The space is very desirable for people as they get older and acquire more clothes, allowing people to be more organized. Having a walk-in closet in the master bedroom is also a status symbol. When giving a house tour, DeSimone said, people want to say, “hey, check out my closet,” in the same way they say, “hey, have you seen my new kitchen?”
Pct. of home buyers willing to pay more: 69% Amount willing to pay extra: $1,840
About 69% of homeowners said they were willing to spend more money for new kitchen appliances. Unsurprisingly, people who are looking to buy a new home find this far more important than people who are eyeing previously owned homes. People who are the first to live in a specific house tend to want everything to be new in the house because they consider the house truly “their own,” DeSimone said. People also do not want to have to deal with the stress of broken appliances. “They don’t want to come home after a horrible stressful day at work and find the dishwasher isn’t working or the fridge is making noises.”
Pct. of home buyers willing to pay more: 69% Amount willing to pay extra: $2,520
Nearly seven in 10 homeowners said they would be willing to pay more on central air conditioning — the same as new kitchen appliances and more than any other feature. Central air conditioning was considered “very important” by more than 60% of people in all age groups. Samuelson noted that although people were willing to shell out approximately $2,500 for the feature, that is far less than what it would actually cost to install central air conditioning. “There is a difference in people’s preference and what they are willing to pay for,” Samuelson said. “They may want the steak but are on a macaroni budget."