Whether you just moved in or have lived in your home for 50 years, it’s common to wonder how long you should stay in your home before you sell it. According to the National Association of Realtors®, ten years is the average amount of time that a homeowner will stay in their home before deciding to sell it.
If you’re under ten years and itching to sell, many experts say you should follow the “five-year rule” and stay in the same home for at least five years before selling.
This may sound like a long time and you may think you are ready to sell now, but before you make any rash decisions, we put together a few of the most important factors that you should be aware of.
1. Your Mortgage
One of the first and foremost factors you must consider when you decide to sell your home is your mortgage payment. If you want to make money when you sell your home, then your sale price must be greater than what’s left of your mortgage. When you first buy your home and begin to pay your mortgage, the first few years will go towards interest rather than the principal amount. This typically means that it’s more difficult to make money off your sale under 5 years. However, if you put a larger downpayment on your house, then your interest rate and mortgage will probably be smaller, making it possible to make money in a shorter amount of time.
Building home equity is important. You’ll want to have a lot of equity built up when you decide to sell. The amount of home equity you’ve obtained depends on any remodeling or renovations you’ve made, as well as your mortgage. If the home you bought was already in tip-top shape, then it may be difficult to build equity. If you’ve remodeled the kitchen, bathroom, redone the flooring, or made other renovations around the house, then you have most likely gained home equity. You can also increase your home equity by paying off more of the principal on your mortgage.
3. Market Conditions
One of the more common reasons you’re eager to sell your home is to make money on your property. There are a few things to look out for when deciding if it’s a seller’s market and whether or not it’s time to make your move. If you notice the price per square foot in your area is increasing, chances are that homes stay on the market for a shorter time. You should also take note of homes near you that are selling. It might seem time-consuming, but don’t worry! We always keep track of recent home sales in the area and can send you over an up-to-date market report.