When people ask me this question, it’s usually not about time: it’s about money! What home seller doesn’t want to stack the odds in their favor to achieve the highest possible sale price? But there are many non-monetary issues that influence when is the best time for you to sell your home. Could you put a price tag on having your children settled before the school year starts? Do you need to coincide dates of a home purchase and sale together? Is there a baby on the way or an impending wedding date? Consider your situation carefully. The best timing and the best real estate market might be two different things.
If you’re planning to sell your home, it’s important to evaluate the total financial picture. Just because the market is “hot” may not equal the best financial decision. For example, if you are selling an inexpensive studio apartment to move up to a large, costly family home, you may want to wait until prices have fallen. The comparatively small loss in the sale price of selling your apartment will be more than offset by the large price reduction you can enjoy when buying into a higher price range.
Another consideration: does your financial institution have a hefty mortgage prepayment policy? In our uncertain economic times it’s becoming common for lenders to charge excessive penalties to owners who sell their homes before the term of the mortgage is up. It pays (literally) to do your homework on the actual costs of selling in advance.
A Typical Real Estate Market Cycle
Historically our market cycles every year. Spring is unquestionably the busiest time for home sales, and many sellers wait to list their homes until spring in hopes the busiest market will bring the highest sale price. In turn many buyers wait to start shopping for homes until spring as they anticipate the best selections of homes will be available. There will often be a small influx of listings after the holiday season in January with the spring market kicking off around mid-February, and the busiest part of the market running mid-March through mid-June.
On the other hand, winter is notoriously the slowest market of the year. Very few people choose to list their homes after mid-November, and many home sellers will remove their properties from the market in December to enjoy their holiday season uninterrupted. With thinning inventory, few new listings and few house hunters willing to brave the holiday rush (and slush), prices tend to wane as everyone buckles down for the winter and looks forward to spring.
Whatever your motivation and goals are for selling your home, remember to weigh up all your options carefully. Selling a home is one of the biggest financial decision most people make in their lives!