6 Things to Consider When Selling Your Home
6 Things to Consider When Selling Your Home
Your home is many things: your comfort zone, where you crash after a hard day, a space for friends and family to come together, and much more. However, from the financial side, your home is a valuable investment. It’s an asset that can dramatically affect your finances and also a stepping stone toward your long-term goals. Your home carries a great deal of weight, financially and otherwise, so it’s essential to approach the selling process carefully.
How and when you sell your house can make all the difference in the financial outcome. With the right foundation, you can sell your home with the confidence of knowing you’re doing what you can to make the process smooth and beneficial.
While you will undoubtedly receive hoards of advice from friends, family, and strangers, we recommend looking to unbiased professionals for guidance. To that end, we’ve put together six factors to consider when selling your home. These financially-based ideas won’t tell you how to stage your living room for prospective buyers. Instead, we’re focused on protecting your financial future.
Consider these six factors before putting the “For Sale” sign on your lawn:
1. Try to remain emotionally uninvolved. You’re human. And thanks to human emotions, we become attached to our homes. After all, they’re where we live our lives—where we laugh, where we love, and where we spend the majority of our time. With this in mind, it’s best to stay away from the attached feeling you get when you think of home. Instead of “home,” try to think of this as a “house” or an “asset.” In all financial decisions, it’s best to take your emotions out of the equation so that you can view the transaction objectively.
2. Know what insurance you need to carry. Whether or not you’re still living in the home, keep your homeowner’s insurance (which your lender may require). Also, discuss with your insurance agent which plans will cover you best if a prospective buyer injures themselves on your property.
3. Consult with multiple agents before hiring. Like financial advisors, and any professional you trust with your assets, you’ll want to choose a real estate agent who fits your needs. Choose someone you feel comfortable with and someone with a proven track record. Before hiring an agent, take consultation calls with multiple professionals and read their online reviews. The real estate agent you choose will be advocating for you throughout the process, so you want to be sure they have your best interests in mind.
4. Research the current tax implications for selling your home. Because selling your home qualifies as a taxable event, there are additional variables to think about. Luckily, if you’ve been living in your house as a primary residence for two of the past five years, you’ll receive a tax break. Discuss with your financial advisor if you qualify for tax breaks and what you should know about other available tax benefits.
5. Weigh your profit and loss margins. Consider how much you will spend throughout the process before you determine an appropriate asking price. It’s crucial to ensure that you receive enough to cover your expenses and still make a profit. Your real estate agent can help you decide on an asking price, but it’s up to you to know how much you’ve spent on the house over time. Note that it will be helpful to save all of your receipts in one place when you spend money updating your home so that you can refer back in times like these.
6. Consider the improvements that will make the most financial impact. Another factor that your real estate agent can consult on is which improvements will make the most impact. Rather than focusing on what you think will make the house look better, ask your agent to identify the areas that will have the best return on investment. You don’t want to spend money in areas that will not increase the property’s value. This consideration also factors into the previous point: understanding how much you’ve spent over time and how much your house will bring.
Once you decide to sell your home—especially if that sale will be the beginning of other changes like moving cities, changing jobs, and buying a new home—reach out to your financial advisor for guidance. An advisor looks at your finances holistically to understand how this piece of the puzzle works toward your financial goals.
While Internet research is a great start, it’s vital to have someone to answer the tough questions. Moreover, you need someone who will answer those questions while factoring in your financial history.
Southwestern Investment Group approaches every new milestone with a comprehensive attitude. We take time to understand where you’ve been and, more importantly, where you’re going. We guide you through the process, teaching you along the way. We empower you to make financial decisions with the certainty of an expert.
Whether this is the first house you’ve sold or your fifth, our advisors have the expertise to maximize your financial benefits. Contact us today to begin designing the financial plan that achieves your goals.
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