Today I’d like to share two questions that can help you determine whether now is the right time to sell your home.
It might sound counterintuitive, but something I love about my job as a Realtor is helping people figure out when it’s best to not sell.
The first question to ask relates to your closing costs and capital gains. Do you know what they will be? To illustrate this, let me give you an example.
Recently I met with a woman who had a home on the smaller side and was looking for something larger to better accommodate her children.
The challenge that arose in this case was that since buying her home in 1994 at $250,000, the property’s value rose to $900,000.
Though this isn’t really what you would call a problem in and of itself, we did determine that she would have about $90,000 worth of capital gains tax.
This means she wouldn’t be able to take all of that money into her next property because of closing costs and capital gains, which will total to approximately $150,000.
In other words, that’s $150,000 worth of equity she would lose if she made the move from her current home to a larger one.
The next question to consider is whether you can build more square footage.
To start, let’s estimate an approximate $250 per square foot on an addition. Keep in mind, though, that we can also estimate a value of $500 per square foot.
In this case the money you are putting in is actually being doubled. But you’ve got to be careful that you aren’t overbuilding for the neighborhood.Determining if this is the case is something I’d be happy to help with.
If you have any other questions or want more information, feel free to give me a call or send me an email. I look forward to hearing from you.