Despite what real estate reality shows and HGTV might lead you to believe, the decision to sell your home isn’t simple — and it isn’t a decision that you can reach in 30 minutes. This is true even if you never really loved your property in the first place, or it’s become a daily cause of stress. Maybe the commute is awful, your neighbors live to find new ways to annoy you, or the “fixer upper” kitchen is still an avocado-colored nightmare.
That’s because parting with a home falls into the “major life change” category. Cue the second-guessing, polling all friends and family for opinions, obsessive list-making and mentally running through all scenarios as soon as your head hits the pillow. If you feel like this describes your situation, then it’s time to take a deep breath and consider the signs life has been sending your way. Here’s how you'll know if it’s time to sell, refinance, or stay put.
The Scenario:
You're Paying PMI
It’s A Sign … Refinance or Do Nothing
If your down payment was less than 20%, your loan likely came with private mortgage insurance that has added a little extra to your monthly mortgage payment. If you now have at least 20% equity in your home, you may be able to refinance your loan to remove the PMI. If you don’t have at least 20% equity yet, it might be worth waiting a little bit longer.
The Scenario:
You’ve Suddenly Noticed 100 Things You Dislike About Your Home
It’s A Sign … Stay Put and Update
After the honeymoon phase with your home is over, you may grow to dislike certain features about it that you once loved. However, who is to say that the pattern won’t repeat with a different property? If you’ve only just settled in a short while ago, you haven’t yet learned to live with the home you have. Fight that FOMO (fear of missing out) by making improvements like upgrading the kitchen or bath, fixing up the exterior for a little curb appeal, or even just trying simple fixes like repainting the rooms or adding new furniture.
The Scenario:
You’ve Just Made A Big Investment
It’s A Sign … Stay Put
Whether you’ve put a lot of money into your home through renovations or upgrades, or you made another significant investment in your life (starting new a business, going back to school, bought a boat, etc.), you could be stretched a little too thin to sell your home right now. While wise renovations often add value, they don’t guarantee a higher sales price and shouldn’t be the sole motivation for selling. This is especially true if you made highly personal choices in your improvements, like going for fire engine red kitchen cabinetry. Instead, enjoy the new scenery.
The Scenario:
You’ve Got Debt (But Also Equity)
It’s A Sign … Refinance
Sure, you might profit from the sale of your home, which could help you pay off lingering loans, credit card balances and other types of debt. But that’s not a guarantee. Plus, to get the highest offers, you could end up having to invest in making repairs and upgrades. If you’ve built equity, you can refinance to a lower interest rate and a lower monthly payment, thus freeing up more money in your budget. Another option to consider is a cash-out refinance to consolidate your debt. This option will pay off your balances up front and allow you to have fixed payments on the refinanced loan.
The Scenario:
You Really Can’t Stand Your Neighborhood Anymore
It’s A Sign ... Sell
What was once a quiet suburban road became a popular cut-through for speeding traffic. Your neighbors leaned into urban farming, and now you can’t even enjoy your backyard without constant noise and smells. There isn’t any parking, ever, so you have to walk a mile to get to your front door. While there are many things you can do to improve your home’s interior and exterior, you can’t change the location. If the idea of heading home makes you miserable, it’s time to find new surroundings. Here’s an extra tip: Make sure to visit potential neighborhoods on weekdays during rush hour and weekend nights to get a real sense of the lifestyle.
The Scenario:
You’ve Run Out Of Space
It’s A Sign ... Sell
Maybe your family has expanded since you bought your one-bedroom, or you decluttered repeatedly, but you’d need to become a minimalist to make your space work. Instead of drastically changing your lifestyle, change your home. If budget is a concern, prioritize space over other items on your real estate wish list like a specific neighborhood, high-end amenities, new construction or a newly-updated home.
