Thursday, January 17 2013
The real estate climate forecast for the coming year is partly sunny -- and warming up! Yet, with no double-digit appreciation in sight, some who plan on selling a home inEvansville face the very practical question: is the winter of ’13 the right time to sell?
For those who stand to make a gain from selling, the decision boils down to convenience. Whether sale prices rise or fall, the cost of their next home will probably move in the same direction.
But what about those who suspect that the overhang from the financial crisis will probably result in some degree of net loss? How do they decide whether it makes more sense to sell and take the loss, or to rent -- and wait? Emotions aside, the financial impacts can be examined. If you are considering selling a home in the area and don’t stand to make a profit, asking yourself some questions can help reach a decision:
· Can I afford to take a loss? If you might need cash from your current property to purchase another, waiting is likely to be the safest course.
· If I have to take a loss, will there be a tax advantage to doing so in 2013? If you expect to sell a business or come into any other form of extra income during this tax year, check with your CPA to see if this year’s the right time.
· If I choose to rent my home, am I prepared to be a landlord? Are you up-to-date on applicable federal and local fair housing ordinances and tenants’ rights issues? If not, it’s practical to factor in the cost of a property management agency (usually 7 – 15%)
· Am I prepared to wait it out? If you decide to rent a local home and wait for the market to catch up to your profit goals, are you prepared to wait X years before selling? On-again off-again selling decisions can result in high tenant turnover -- which eats into your bottom line.
Selling a home vs. renting it out is a decision only you can make -- why starting with accurate information is so important. I will be happy to meet for a confidential consultation on the value of your local home in today’s market. It is a very good place to start.
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