Blog, For Sellers, Guides
Deciding to Sell: What should I consider? What are my options?
Posted 1 year ago by Mark Cheng · Leave a Comment
I would like to move because…
Most of the time a decision to sell or move is a result of a significant life event or a changing need like having a new baby, getting married, needing a yard, downsizing after the kids leave home, or just downsizing to reduce expenses. In these situations, it’s not only important to review financial implications of selling but to also consider the intrinsic value of selling and moving on to the next phase of your life.
Many of my personal clients who waited years to move tell me afterwards that they wish they had moved sooner, especially if the move is to be closer to family, to enjoy their retirement, or even just to downsize to help pay for traveling adventures.
When to Sell and When to Lease:
If you’ve decided that now is the time to move, should you lease your home to a renter or should you sell it? The easiest ways to maximize your real estate investment is proper planning.
Why you should sell:
One of the biggest factors to consider for owners who have seen their values go up is tax-free gains. If you’ve lived in your home 2 out of the past 5 years, you can claim $250,000.00 as an individual or $500,000.00 as a couple in gains absolutely tax-free. Of course, always consult with your CPA as every situation is different. If you move out of your home and lease the home out for more than 3 years you lose the homeowner’s tax exemption gains mentioned above. If you have some gains or you’ve reached the limit, it may be a good idea to sell and re-invest the money into another property where you can hopefully do that again in a few years.
Other factors to consider include the ability to afford multiple mortgages or homes, a backup plan for setbacks such as loss of income, your desire to become a landlord, and needing the money to purchase the next home.
When it makes sense to convert your home into a rental:
If you can afford to purchase the next home without selling and you’re planning on keeping your current home as a rental, interest rates are so good these days that you might be able to refinance to a great rate, rent out the home, have someone pay your mortgage for you, and if you’re lucky or have owned the home for awhile, you may even have a little cash coming in each month.
If you’re still confused about what you’d like to do, feel free to contact me or your local Realtor and one of us will be happy to walk you through your options. Otherwise, if everything you’ve thought about still points to selling, the next step is to find out if makes sense to sell in today’s market.
Next: Listing Your Home: How do I get started? What are the costs involved?
Table of Contents: Mark’s Selling Guide
I am an experienced Southern California real estate professional helping clients purchase and sell San Gabriel Valley homes. I specialize in the cities of Arcadia, Temple City, San Marino, San Gabriel, South Pasadena, Pasadena, and the surrounding area.