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Should I Sell My House Now Or Wait? A Guide | Bankrate

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Key takeaways

Late spring and early summer are generally considered the best times to sell a house.

Traditionally, low mortgage rates and short supply make it a good time to sell.

While today’s rates are relatively high, low inventory is still keeping sellers in the driver’s seat in most markets.

If you’re considering selling your home, it’s critical to understand the current real estate market dynamics. The volatility that dominated the market amid pandemic-related pressures may have eased, but there are still serious challenges.

For one thing, mortgage interest rates shot up recently, reaching highs not seen in more than 20 years. While they have backed down from the 8 percent threshold seen in October 2023, Bankrate’s weekly survey of large national lenders shows that, as of late May, the average 30-year fixed mortgage rate was 7.17 percent. That still-high reality makes mortgage payments more expensive and is driving more than a few potential buyers to the sidelines — certainly not ideal if you’re on the selling side of the equation.

Complicating things further, home prices are very high as well. April 2024’s nationwide median sale price was $407,600, a record high for the month of April and very close to the National Association of Realtors’ highest-ever monthly median of $413,800, recorded in June 2022. While high prices are typically good news for sellers, they obviously require buyers who can afford the purchase, and the high interest rates are making that harder. Regardless of pricing trends, though, with housing inventory still at a low 3.5-month supply, the nation overall is still solidly a seller’s market.

However, if you were wary of a home sale last year, that may have been wise. ATTOM Data Solutions’ 2023 U.S. Home Sales Report shows that, while prices did rise throughout last year, they did so at the slowest pace in more than a decade.

So, amid all these mixed signals, is now a good time to sell your house? Here are some insights to help you sort through the question.

Should I sell my house now?

There are numerous important questions to consider, both financial and lifestyle-based, before putting your home on the market. If popular opinion is any guide, now may still be a good time to sell despite the evolving market. According to Fannie Mae’s April 2024 Home Purchase Sentiment Index, about two-thirds of respondents — 67 percent — feel it is a good time to sell.

Local market dynamics also play a large part in whether it’s a good or bad time to sell, says Katie Severance, a Realtor with Douglas Elliman in Palm Beach, Florida, and author of “The Brilliant Home Buyer.” Some markets may be riding high, while others remain sluggish. “In some areas, selling now is the right thing to do because prices are still climbing,” Severance says. “In other markets, it might be best to wait to sell until interest rates come down and stay down, which will spur sales once again.”

When is a good time to sell a house?

Historically, spring and summer are usually the best times of year to sell a house. But beyond seasonality, there are many factors that might make selling your home a wise decision. Often the reasons are based on financial calculations, cost of living expenses and other considerations, but there may also be other factors that make selling your home the right choice. These include:

If rates are low
This is not the case currently, but low interest rates entice more prospective buyers to enter the market, which is advantageous for sellers. An increased number of buyers shopping for homes often leads to bidding wars and drives up home prices, meaning you can likely sell your home for a solid profit.

If supply is short
A shortage of housing inventory — which is the case currently — also drives up demand and prices for available homes. What’s more, when housing supply is low, homes on the market tend to sell faster.

If you’re ready to downsize
Downsizing may be a more budget-friendly choice than continuing to maintain a larger, costlier home. For older homeowners, downsizing may even be a necessity: “If you can’t handle the stairs anymore, or if there are more repairs than you can manage, it may be a good time to sell,” says Rick Albert, a broker and director of business development for Lamerica Real Estate in Los Angeles.

If you need to relocate
If you’re relocating to a new state for a job or want to enjoy your retirement in a new area, and you need the profits from the sale to put toward your next place, selling may be unavoidable. “The time to sell is when you need to sell,” says Severance. “It’s a no-brainer to sell if you have somewhere to go.”

When is a good time to wait?

Here are some common factors that might make prospective sellers hold off on listing their home for sale:

If rates are rising
Rising mortgage interest rates often mean a smaller pool of buyers who can afford the price you want. Selling a home isn’t free, so if you can’t maximize your price, you might want to wait.

If you’ve recently refinanced
If you recently refinanced your mortgage, it may not make financial sense to sell just yet. You may actually lose money by doing so, when considering the closing costs and other fees typically paid as part of the refinancing process.

If you’re upsizing
The cost to purchase a new, bigger home may be unaffordable, particularly in a hot market. Don’t get in over your head — take the time to be sure your finances can accommodate the type of home you want. Bankrate’s home-affordability calculator can help you crunch the numbers.

If your home is in poor condition
Got a long list of repairs waiting to be completed around your home? You may want to postpone selling until some of the work can be done. It’s important to show your home in its best light in order to land the most favorable offer possible. If the home is in disrepair or there’s unfinished work, you are less likely to get a good price.

If you have no game plan
If you’re simply trying to time the market to make a profit and have no plan for after your home is sold, it may be best to wait. “It doesn’t make sense to sell if you don’t know what your next play is,” says Albert. “Where are you going? Where is that money going to be spent? If you don’t have a plan, then you shouldn’t sell.”

What about the NAR lawsuit?

There are also upcoming commission changes to consider when deciding whether to sell now or wait. New rules are set to take effect at the end of the summer as a result of a federal lawsuit settlement involving the National Association of Realtors and several large brokerages.

Longstanding tradition has held that a home seller paid the commission fees for both real estate agents in the transaction, their own and their buyer’s. But under the new rules, a buyer might be responsible for paying their own agent, which could save the seller money. However, these changes have not yet received final court approval, and waiting for them to take effect could be risky — and would mean missing out on prime selling season.

What if there’s a recession?

According to Bankrate’s most recent Economic Indicator Survey, the U.S. economy has a 33 percent chance of entering a recession by early 2025. While that is very far from a sure thing, it’s worth asking: Should you sell your house during a recession? Or even just before one?

The answer really depends on your personal circumstances. “If you’re concerned a recession is coming, it’s generally better to sell now instead of waiting,” says Jade Lee-Duffy, a San Diego–based broker. However, “selling during a recession might be beneficial if you’re looking to downsize or rent. This could cut your overall costs, and you could put the proceeds into a retirement account, go on vacation or invest.”

Remember, recessions typically bring with them job losses and general belt tightening, which can severely limit the number of house-hunters looking to buy. More buyers will be able to afford a home, and qualify for a mortgage, before a recession than after.

Tips to sell your home

If your answer to “should I sell my house now?” is yes, here are some steps you can take to get the best deal possible.

Find a good local agent: Advice and guidance from a professional real estate agent can be invaluable, particularly amid a hot or unpredictable housing market. Take the time to interview several candidates in your area, and ask friends or family members to recommend agents they’ve had a good experience with. “A Realtor can help you create a game plan to get your home organized and in shape to present it in the most favorable light,” says Jen Horner, a Realtor with Masters Utah Real Estate.

Make repairs if needed: To land the best offer for your home, know what needs fixing first. “Sellers need to understand that they only have one chance to make a first impression,” Horner says. “Your Realtor can walk the property with you and make suggestions for preparing your home to hit the market.”

Declutter and stage the interior: You should also make an effort to tidy your home, allowing prospective buyers to see the spaces clearly. “Less is always more,” she says. “The fewer items in a room, the larger it will feel. Remove any personal items and unnecessary furniture.” If tidying is not enough, consider hiring a home stager. “Staging can help show the buyer how to optimize the space.”

Add curb appeal outside: Your home’s exterior is another part of making a good first impression, and it’s worth freshening up the curb appeal before buyers see it. That can include upgrading landscaping and walkways, or even something as simple as a fresh coat of paint on the front door.

Alternative ways to sell

If you need to sell your home quickly and don’t have time for the often-lengthy process of a traditional sale, iBuyers and cash homebuying companies may be worth considering.

An iBuyer — Opendoor and Offerpad are two of the biggest — typically makes an offer on homes within 24 to 48 hours. If you accept it, the entire process can often be completed within a few weeks or less. Cash homebuyers also allow you to sell a home remarkably fast, sometimes in as little as one week, and they usually buy as-is, meaning there’s no need to make repairs at all.

Before proceeding with either method, though, it’s important to understand one major downside: While you gain speed and convenience when you sell to these companies, you sacrifice profit. They usually offer much less money for your home than you could get through a traditional sale. And iBuyers may charge steep fees as well, so be sure to read the fine print before signing anything.

Bottom line

Deciding to sell your home, whether now or later, is a major decision that requires careful consideration. Your future plans and goals should be a significant part of the equation, as well as your financial needs and the realities of the local market in your area. If you decide to proceed with listing your home, working with an experienced real estate agent who knows your community well can increase your chances of a smooth (and lucrative) sale.

FAQs

Is it a good time to sell a house?

Deciding whether to sell your house depends on your personal circumstances and the specific dynamics of the market in your area. “It depends on where you are selling,” says Katie Severance, a Florida Realtor. “Interest rates are up, causing prices in some markets to go down, and yet in other areas, prices are still climbing. It’s all geographically driven.” If you need to sell now, whether it’s a good time or not, an experienced local agent can guide you through the process.

What are the hardest months to sell a house?

Typically, spring and summer are considered the best times to sell, when there’s the most activity from buyers and the most listings entering the market. The worst times to sell are typically the dead of winter, when bad weather keeps people off the roads and holiday planning occupies their minds. December, January and February are probably the hardest months for home sellers — but activity picks up again in the spring.

Should I sell my house now, before there’s a recession?

Recessions mean belt tightening and potential layoffs. If your area is hard-hit by job losses, the number of qualified buyers will be severely limited — if you’re concerned, it might be best to sell before that (potentially) happens. However Bankrate’s most recent Economic Indicator Survey shows only a 33 percent chance of a recession.

Do I pay taxes when I sell my house?

If you make a very substantial amount of money on the sale of your home, you may be subject to capital gains taxes. The exact tax rate you’ll pay is impacted by various factors, including how much of a profit you make, how long you’ve owned the home, your marital status and more. You’ll also have to pay any outstanding property taxes still owed at the time of sale, and many states have a real estate transfer tax that may be owed as well.



This article was originally published by a www.bankrate.com . Read the Original article here. .

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10 Tips To Sell Your Home For More Money | Bankrate

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Even in a seller’s market, where inventory is scarce and bidding wars are common, it still pays to invest some time and energy in positioning your home to sell for top dollar. This can involve a variety of steps, from working with a real estate agent who truly understands your local market to spending some money to make sure your home looks its best for buyers. Here are 10 tips for selling your home that Realtors say will separate you from the competition — and help you bring in a higher price.

1. Find a real estate agent

Working with a skilled local real estate agent who knows your area inside and out can help you sell your home more quickly, and often, for more money. In fact, data from the National Association of Realtors shows that between July 2022 and June 2023, homes listed without the assistance of a Realtor sold for a median price of $310,000, while those sold with one fetched a median of $405,000. Interview several candidates before you commit to one agent — the better you get along, the smoother the process is likely to be.

2. Invest in value-adding improvements

Determining which home improvements to invest in can be daunting, and the costs can add up quickly. The key is to spend your money on projects that will provide the most return on your investment.

Minor kitchen upgrades are typically a wise choice, says San Diego–area Realtor Jade Lee-Duffy. “The heart of the home is the kitchen, and many buyers will judge a property by its kitchen,” she says. Just don’t go overboard: “While a complete overhaul of this space can run into the tens of thousands, a minor update is where you can gain the greatest return,” she says. “Think about resurfacing cabinets, replacing countertops, a fresh coat of paint or updating the fixtures and hardware.”

Updating a bathroom is another smart investment, says Katie Severance, a Realtor with Douglas Elliman in Palm Beach, Florida, and author of “The Brilliant Home Buyer.” “Renovated kitchens and baths are the ‘money rooms’ — those that add the most value to a home,” she says.

3. Up your curb appeal

As the saying goes, you don’t get a second chance to make a first impression. “Make sure your front yard is free of debris, the bushes are pruned and the grass has been cut,” says Lee-Duffy. “Also, add some bright potted plants by the front door to make buyers feel welcome.”

Some other easy updates that can improve curb appeal include:

Touching up exterior paint
Adding window flower boxes
Installing a new mailbox
Adding new mulch around shrubs and trees

4. Get a pre-listing inspection

Investing in a home inspection before putting your property on the market is another step to consider. “You don’t want any unexpected surprises,” says Lee-Duffy. “It’s best to find out beforehand if there are any issues that you can fix, before buyers find out on their own.” That would give them negotiating power for a lower price or, worst case scenario, a reason to back out of the deal. So it may be worth a few hundred dollars for the peace of mind.

There is, however, a downside to a pre-listing inspection: “Beware, because once a seller becomes aware of an existing defect and does not correct it prior to listing, they are obligated to disclose it to a buyer,” says Severance. “Defects that a buyer learns were known but not disclosed, prior to accepting an offer, can kill the deal.”

5. Highlight the positive with professional photos

Spending a bit of money on high-quality photography can go a long way toward helping your home sell for a higher price. “The majority of people search for properties online,” says Lee-Duffy. “If the photos pop, it can translate into a higher sale price — and sell faster, too.”

It’s OK to leave some things to the imagination when it comes to your home’s online listing, though. “I advise against photographing every square foot of the home,” says Severance. “The goal of photographs is not to give all the goodies away online; it’s to make a buyer want to see more — to whet their whistle enough to entice them to see it in person. If they don’t come see the house, they probably aren’t making an offer.”

6. Stage your home

When it comes to home staging, says Severance, there are two rules of thumb: less is more and keep it neutral. “It’s very important to capture buyers’ interest from the front door,” she says. “Pay extra attention to the entry: Repaint; place flowers; buy a new area rug, an impressive mirror or a dramatic piece of art.”

Remove objects and clutter that visually shrink a room, such as large ottomans or too many plants, and remove everything from the kitchen counters except for one or two new-looking appliances. “And don’t forget to stage the deck or patio, because that is an extension of the house that can make a small home feel much larger than it is,” Severance adds.

You can do the staging work on your own or up the ante by hiring a professional stager.  A pro will average around $1,800, according to HomeAdvisor.

7. Set the right asking price

Identifying the best price for your home can be critical to your success. “Setting the price too high can be detrimental and prevent buyers from walking through your front door,” says Lee-Duffy.

How do you find that sweet spot of pricing for profit but not overpricing? The expertise of your agent can be truly valuable here. A knowledgeable agent will understand fair market value in your area, how much your house is worth and how much you might reasonably expect to get for it in the current market.

“Good pricing requires the expertise to thread the needle,” says Severance. “List at a number that is lower than comparable properties, in order to draw attention to it, but not so low that you will be disappointed if you only get one offer right at list price.” If enough buyers are enticed, you might even set the stage for a bidding war.

8. Remove personal items

“The goal of any showing is for the buyer to envision their own belongings in the space,” says Severance. So, while family photos and other knickknacks might seem like they have no bearing on how much money your home commands, they really do matter — especially if you are still living in the home while you’re trying to sell it.

If buyers are distracted by personal items, then chances are they won’t be able to see themselves in the space, and will not end up making an offer. “Buyers are thinking of their own furniture, where it will go and how it will fit. It’s the house they came to see, not the items inside of it,” she says.

9. Be ready to move fast

Once your property is listed on the market, things can happen quickly. It’s important to be well prepared ahead of time so that you can be as responsive as possible to potential offers. “Fill out all the necessary documents, such as any seller disclosures, and have paperwork for recent repair work, home renovation costs and utility bills on-hand for any buyer requests that come in,” says Lee-Duffy.

Sellers who are slow in reaction time or unresponsive can lose buyers, adds Severance. “If the buyer feels that they are not being dealt with fairly, they are very likely to walk away,” she says.

10. Use your head, not your heart

Finally, try to remove emotion from the equation and see the process as a simple transaction — your home is no longer “home” but a product for sale. It’s not unusual for prospective buyers to request credits or repairs, and it’s easy as a seller to take offense, so try to have a clear understanding of what issues and items you may be willing to make concessions on.

“It’s important to take emotion out of it and remember that the buyer usually doesn’t expect to get everything they ask for,” says Severance. “Take a closer look at which requests are valid and fair, and offer something. The cost to you is not in giving the concession — it’s the expense of losing the buyer, putting the property back on the market, starting all over again and getting a potentially lower offer.”

FAQs

How can I maximize my net proceeds from selling my home?

To maximize how much you earn from the sale, it’s important to put in some work to get your property market-ready. This includes improving your home’s curb appeal, investing in professional listing photos and staging your home before opening it up to buyers. Your real estate agent can provide home-selling tips based on your specific situation.

Do I need a real estate agent to sell my home?

No, you don’t necessarily need a real estate agent to sell your house. Selling without one is called a “for sale by owner” transaction, and they are not unusual. However, partnering with an agent can make the process much easier for you — agents help with important tasks like determining the right asking price, creating a listing that will attract buyers and hosting showings and open houses. Later in the process, they’ll negotiate with buyers and guide you through the closing, ensuring your interests are protected.

How can I sell my house fast?

If you’re in a hurry to move, consider selling to a cash homebuying company or iBuyer. These businesses buy properties for cash, often in as-is condition, and they can close deals far faster than a traditional market sale — often in just a couple of weeks or less. The downside is that you’ll likely earn less money selling this way than you would with a traditional home listing.



This article was originally published by a www.bankrate.com . Read the Original article here. .

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Selling A House In Massachusetts | Bankrate

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In a hurry to sell your Bay State home? The odds of selling relatively quickly are in your favor: Homes here spend much less time on the market than in most parts of the country, according to Redfin data.

But everything is relative, and if you need to relocate for work right away, for example, or need the proceeds from the sale ASAP, you may be hoping to speed the process along. There are a variety of ways to do just that, including working with one of the many cash-homebuying firms in the area. Here’s what you need to know to sell your house fast in Massachusetts.

How fast can you sell your home in Massachusetts?

The Massachusetts housing market is quite robust. Home prices here are high and getting higher: February Redfin data shows that the state’s median home price was $576,000, a nearly 10 percent jump from February 2023. And homes typically spent a median of 28 days on the market before going to contract — five days less than last year and a much quicker timeline than the national median of 48 days on market.

Your Massachusetts home won’t necessarily sell in this exact amount of time, though. A variety of factors can impact how fast a home sells: The time of year, your home’s size and condition and your exact location in the state all factor into the equation.

Need to move faster?

If you want to sell your home even faster, here are some options to consider that can expedite a sale:

Cash homebuyers: For maximum speed, your best bet is forgoing the traditional listing process and selling directly to a cash homebuying company, whether it’s a nationally known name like We Buy Houses or a smaller, local firm. These operations can often close a sale in just a couple weeks, or sometimes even faster. However, you will likely make less of a profit than you would on the open market.

iBuyers: Online homebuying firms known as iBuyers operate in a similar manner and with similar speed. Opendoor, one of the biggest, buys homes in the Boston area.

Listing as-is: Selling your home in as-is condition makes the process move faster because you don’t waste time on back-and-forth negotiations over repairs — the buyer knows upfront that what they get is what they see.

Flexibility: You can still sell relatively fast by listing your Massachusetts home in the traditional way. Be direct with your real estate agent about your need for speed, so that they can market it accordingly. This may require a bit of flexibility on your part, like being willing to price the home slightly lower to attract buyer attention or offering seller concessions to sweeten the deal. Your agent will know what is likely to work best in your specific market.

Selling your home fast for fair market value

If you want to ensure your home sale brings in the highest price possible, but you’d still like to move relatively fast, work with a local real estate agent. Look for someone who has experience in your specific area — and ideally, in your specific neighborhood — so you’ll have the best possible idea of your home’s market value. And discuss these topics before you list:

How should you price your listing?

Your agent will be instrumental in developing your pricing strategy. While you can take steps on your own to estimate what your house is worth, a pro agent will walk you through detailed local comps to understand what area buyers have recently paid for properties similar to yours.

Is it worth upgrading before you sell?

If you’re thinking about investing in a big renovation project, keep in mind that it could cost a pile of money, which you aren’t likely to fully make back — and take a long time, which you are trying to avoid. Rather than delay your sale with a major undertaking, consider quick and inexpensive upgrades, like a fresh coat of paint or upping your curb appeal.

What should you repair before selling?

As you think about what to repair versus what not to bother with, take a simple approach: Are there any glaring issues that would turn you off as a buyer? Put those at the top of your priority list. They will likely be worth the investment. If you’re anxious about potential problems, you might even want to consider a pre-listing inspection. Essentially, you’ll hire a home inspector to identify any issues, which gives you the option to address them before a potential buyer finds them.

Should you pay to stage your home?

First impressions are crucial in real estate. If you have the interior-designer touch, your home might already look open-house-ready. But if not, or if you’ve already moved out and the place is totally empty, it might be worth hiring professional stagers to help it shine. This can really make a home come to life and impress potential buyers, which in turn can help you sell faster, and maybe even for more money. Ask your agent whether your home could benefit from staging.

What do you need to disclose to the buyer?

Unlike in many states, which require home sellers to fill out lengthy property disclosures, Massachusetts law requires that you share just two pieces of information: whether the home has lead paint in it and whether it uses a septic system. If the buyer asks you a specific question, though, you must be honest. For example, if you know there have been problems with the plumbing in the bathroom and the buyer asks about it, you must tell the truth.

If you live in a property that belongs to a homeowners association, you will also need to hand over documents detailing the association’s financial health and the bylaws that a buyer will need to follow.

Closing day

Once you start preparing for closing, the deal is almost done — but it’s important to understand how much it’ll cost you to get to the finish line. Here are some common closing costs for sellers in Massachusetts:

Realtor commissions: The way real estate commissions work will change in July 2024, thanks to a major lawsuit that was recently settled. Until then, at least, the seller typically pays commission fees for both their own agent and their buyer’s. This expense usually comes to around 5 or 6 percent of the home’s sale price — for a median-priced $576,000 Massachusetts home, 5 percent is $28,800.

Title insurance: There is no law or set standard for who covers this cost in Massachusetts, but it’s customary for sellers to pay for title insurance in many states. The cost varies depending on the home.

Transfer taxes: The seller also usually covers the cost of real estate transfer taxes in Massachusetts. The rate depends on several factors but is typically $2.28 for every $500 of value. On a $576,000 sale, that adds up to around $2,626.

Escrow and wire-transfer fees: You may be charged nominal fees to cover the cost of the money being held in escrow and any money that needs to be wired in payment (for example, if you are paying off your mortgage with part of the sale proceeds).

Attorney fees: A lawyer must be present at real estate closings by Massachusetts law. This is often the lawyer representing the buyer’s lender, though — you as the seller are not required to hire your own lawyer. However, it’s smart to do so anyway when dealing with legal contracts and large amounts of money. Attorney fees will vary for each transaction.

Find a real estate agent

Massachusetts real estate can be complex. Selling to a cash homebuyer makes it simple, and fast. But if selling for top dollar is more important to you than sheer speed, working with a knowledgeable local real estate agent is your best path. To find the right agent, interview multiple candidates. Look for an agent who not only has experience, but has a working style that makes you feel comfortable.

FAQs

What’s the fastest way to sell my house in Massachusetts?


The fastest route to a sale is to work with a cash-homebuyer or an iBuyer. These companies can make offers within 24 hours, or sometimes even more immediately, and most can close the entire deal within a couple weeks. Keep in mind, though, that in exchange for this speed, you will likely make less money from the sale.

Can I sell my house without a Realtor in Massachusetts?


Yes you can. Selling your home without a professional agent is called a for sale by owner or FSBO transaction, and while it saves you from having to pay a listing agent’s commission, it is also quite a lot of work. Any tasks that would normally be done by a Realtor, including creating and marketing the listing, coordinating showings and negotiating with buyers, fall on your shoulders as a FSBO seller.



This article was originally published by a www.bankrate.com . Read the Original article here. .

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The Best and Worst Time To Sell A House | Bankrate

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Key takeaways

Broadly speaking, spring is generally the best time of year to sell your home.

Many families need to be in their new home by the start of the school year, and house-hunting is easier when days are warmer and longer.

Fall and winter typically see the lowest amount of homebuying activity.

During the height of the pandemic, normal seasonal patterns all but disappeared from the housing market. There was so much demand for homes that any time was a good time to sell. But now that the market has settled back into a more normal cadence, timing is once again becoming an important consideration for home sellers.

Some patterns and trends usually do hold true throughout the year, and one is that late spring and early summer are the best times to sell. Sellers can net thousands of dollars more if they sell during the peak months of May, June and April compared to the three slowest months of the year, October, November and December, according to a 2023 report by ATTOM Data Solutions.

Best month to sell a house

Spring — specifically, the month of May — is the best time to sell a house. Homes sold in May net a 12.8 percent seller premium (the amount above the home’s market value), based on ATTOM’s analysis of single-family home and condo sales over the past 10 years.

Best and worst times to sell a house, by month

To determine the premium or discount sellers realized on a given day, ATTOM compared the median sale price for homes with a purchase closing on that day with the median automated valuation model (AVM) for those same properties at the time of sale. Here’s how each month of the year ranked for the best time to sell a house.

May
$220,000
$195,000
12.8%

June
$228,000
$206,000
10.7%

April
$215,000
$195,000
10.3%

March
$210,000
$191,357
9.7%

July
$227,500
$207,537
9.6%

February
$200,000
$184,000
8.7%

August
$225,000
$208,000
8.2%

September
$223,504
$207,000
8.0%

January
$200,000
$186,000
7.5%

October
$220,000
$206,000
6.8%

December
$220,000
$206,000
6.8%

November
$220,000
$207,000
6.3%

The highest-earning months are, in ranking order, May, June, April and March. Just over 18 million purchase transactions took place during this period, according to ATTOM.

June edges out April for second place, with a 10.7 percent seller premium compared to May’s 12.8 percent. March and April usher in prime homebuying season with premiums of 9.7 percent and 10.3 percent, respectively. By October, seller premiums have tapered off, falling to 6.8 percent.

These stats underscore the conventional wisdom about selling a home: Spring and summer attract the most buyer attention. Conversely, that can be a challenging time to buy, owing to high prices and more demand.

Seasonality is important

While all regions experience seasonality, it is more or less pronounced depending on where you are in the country.

For example, in the South and West — where temperatures are largely more moderate — there’s less discrepancy between the peak and slow seasons, according to the National Association of Realtors. However, there’s more disparity between summer and winter in the Midwest and Northeast.

These seasonal patterns can help give sellers an indication of what to expect throughout the year.

Spring and summer are the best seasons to sell

Typically, sellers list their homes in the spring and summer because the weather is good, especially for people in colder climates. In addition, families want to buy their next home before school starts, says Realtor Liede DeValdivielso, one half of the DeValdivielso Team with the Keyes Company in Coral Gables, Florida.

Daylight savings time might also play a part in why the warmer months stimulate buying activity. “One of the reasons buyers are more eager to view properties during spring and summer may be due to the longer days,” says Marilyn Blume, a real estate agent with Sotheby’s International Realty in New York City. “By getting more exposure for your listing through more traffic, you increase the chances to receive more offers.”

Homebuyers on a deadline — for example, those who want to acquire a house before the school year begins — should make sure they’re in top financial shape before spring. That means checking your credit score and debt-to-income ratio to ensure you’re in a strong position to get a mortgage preapproval. Otherwise, your efforts might be delayed.

“April is plenty of time to get a house before school starts, as long as your financing is in order,” DeValdivielso says. “The best thing to do is shop around for a loan before you start looking for a house. This will give you a good idea of what you can qualify for.”

Fall and winter are the worst seasons to sell

The decline in seller premiums typically begins in September, when the average premium drops to 8 percent — significantly less than the peak in May. By then, many buyers with school-aged kids have likely found a home, so the sharp drop is no surprise.

Combine the new school year with the start of the busy holiday season, and homebuying goes on the back burner during the latter part of the year. Just like in the warmer months, the weather plays a factor in the winter months, too. As the days get dark earlier and temperatures drop, people tend to stay closer to home. This means less foot traffic for sellers.

November is the worst month to sell

The worst month of the year to sell a house is November, with a 6.3 percent seller premium, according to ATTOM. And those premiums stay pretty low in ensuing months. Homebuying activity typically comes to a near-standstill in December, when people tend to travel and are busy with holiday celebrations.

Of course, if you’re a buyer, the opposite holds true: The cooler months can actually be a hot time to house-hunt. There’s less competition from other buyers, and antsy sellers might be more willing to negotiate on price or offer other concessions.

The best day of the week to list your home

Want to get even more specific? If you really want to maximize your profits and sell quickly, list your home on a Thursday. Data from Zillow suggests that Thursday is the sweet spot for new listings to appear on the market, as both house-hunters and real estate agents tend to plan their weekend showings toward the end of the week. Friday is a good bet as well, per Redfin data. Avoid listing at the beginning of the week, as that raises the likelihood that the listing will sit for a few days before most buyers are ready to look — newly added listings look fresher to buyers.

What if there’s a recession?

As happened during the pandemic, the possibility of a recession might see established housing-market trends fly out the window. Recessions can be a dicey time to sell — or buy — a home. When the economy contracts, unemployment rises and potential buyers may experience a decline in income, making it more difficult for them to be approved for a mortgage.

In addition, selling a home requires paying real estate commissions and closing costs that will likely total tens of thousands of dollars. So it’s only worth doing if you really need to. If you’re worried about a recession and can afford to hold off until the economy stabilizes a bit, that could be the smarter financial option.

More tips for sellers

Here are a few more suggestions for homeowners hoping to maximize their selling success:

Real estate is very localized, so speak with an experienced real estate agent in your market who understands local sales trends. Agents can give you neighborhood-specific information to help you make the most strategic decision about when to list your home.
Keep prep time in mind. Sellers should consider making key repairs and updates to their homes to maximize their return, but this can be a lengthy process. Even simple decluttering can be time-consuming, so plan accordingly and finish these projects before putting your home on the market.
Make sure you get expert, professional-quality listing photos taken. All homebuyers search for homes online these days — a full 100 percent, according to National Association of Realtors data — so it’s important to put your home’s best foot forward right from the beginning.



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Capital Gains Tax On Real Estate And Selling Your Home | Bankrate

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Key takeaways

Capital gains tax is a levy imposed by the IRS on the profits made from selling an investment or asset, including real estate.

Primary residences have different capital gains guidelines than rental and investment properties do.

It’s possible to lower the capital gains tax you owe by taking advantage of available deductions, exemptions and exclusions.

Naturally, you want to make a nice profit on your home when you sell it. But beware a bite in your earnings when tax day rolls around: the capital gains tax. If your home has substantially increased in value, you could be liable for a substantial sum when you pay your annual income tax.

Fortunately, there are ways to avoid or reduce the capital gains tax on a home sale to keep as much profit in your pocket as possible. Here’s everything you need to know.

What is the capital gains tax on real estate?

Key terms

Capital gains tax
A levy imposed by the IRS on profits made from the sale of an asset, such as stocks or real estate — that profit is considered taxable income.

Long-term capital gains
A tax on assets held for more than one year.

Property value
The amount a buyer is likely to pay for a real estate asset (i.e., property).

Broadly speaking, capital gains tax is the tax owed on the profit (aka, the capital gain) you make when you sell an investment or asset. It is calculated by subtracting the asset’s original cost or purchase price (the “tax basis”), plus any expenses incurred, from the final sale price.

Special rates apply for long-term capital gains on assets owned for over a year. The long-term capital gains tax rates are 15 percent, 20 percent and 28 percent (for certain special asset types, like small business stock collectibles), depending on your income.

Real estate, including residential real estate, counts as a taxable asset. Therefore, any financial gains from a home sale must be reported to the IRS: You calculate and pay any money due when filing your tax return for the year you sold the property.

While its rates are typically lower than ordinary income tax rates, the capital gains tax can still add up, especially on profits for big-ticket items like a home — the largest single asset many people will ever own. The capital gains tax on real estate directly ties into your property’s value and any increases in its value. If your home substantially appreciated after you bought it, and you realized that appreciation when you sold it, you could have a sizable, taxable gain.

How much is capital gains tax on a primary residence?

Calculating capital gains tax in real estate can be complex. The tax rate depends on several factors:

Your income tax bracket
Your marital status
How long you’ve owned the house
Whether the house was your primary residence, a secondary residence or an investment property

Star Alt

Keep in mind: The tax is only assessed on the profit itself. If you purchased a house five years ago for $250,000 and sold it today for $500,000, your profit would be $250,000. (Though there are deductions you could take that would effectively reduce your net profit.) You would need to report the home sale and potentially pay a capital gains tax on the $250,000 profit.

For the 2023 tax year, you are not subject to capital gains taxes if your taxable income is $44,625 or less ($89,250 if married and filing jointly). If it’s between $44,626 and $492,300 as a single filer, or between $89,251 and $553,850 if married and filing jointly, you would pay 15 percent on the $250,000 profit. Above those top amounts, the capital gains rate would be 20 percent.

However, the IRS gives home sellers multiple ways to avoid or reduce their capital gains taxes, principally if their property is a primary residence. You can exempt a certain amount of the profit — up to $250,000 or $500,000, depending on your filing status — from the tax if you meet certain conditions.

An ill-timed sale could result in a significant tax bill that could have otherwise been avoided.
— Greg McBride, Bankrate Chief Financial Analyst

“Before selling your home, familiarize yourself with the capital gains tax exclusion rules and consult a tax advisor,” says Greg McBride, Bankrate’s chief financial analyst. “An ill-timed sale could result in a significant tax bill that could have otherwise been avoided. If the property has been your primary residence for less than 24 months, for example, you may decide to hold off until you’ve reached that threshold to avoid capital gains tax.”

If you sell a house or property in one year or less after owning it, the short-term capital gains is taxed as ordinary income, which could be as high as 37 percent. Long-term capital gains for properties you owned for over a year are taxed at 0 percent, 15 percent or 20 percent depending on your income tax bracket.

How much is capital gains tax on a rental property?

A rental property doesn’t have the same exclusions as a primary residence when it comes to capital gains taxes. You would have to pay a 25 percent depreciation recapture tax on the portion of your profit from previously claimed depreciation and 0, 15 or 20 percent in long-term capital gains taxes, depending on your income and filing status on the balance.

Suppose the property you bought for $250,000 and sold for $500,000 was a rental. If your profit included depreciation you claimed as a business expense, the IRS would levy a 25 percent depreciation recapture tax on that amount. Your profit balance would be taxed at a 0, 15 or 20 percent capital gains rate, depending on your income.

If you plan to sell a rental property you’ve owned for less than a year, try to stretch ownership out to at least 12 months, or your profit will be taxed as ordinary income. The IRS doesn’t have a ceiling for short-term capital gains taxes, and you may be hit with up to 37 percent tax.

How to avoid capital gains tax on a home sale

Capital gains taxes can greatly affect your bottom line. Fortunately, there are ways to reduce or avoid capital gains taxes on a home sale altogether. It depends on the property type and your filing status. The IRS offers a few scenarios to avoid capital gains taxes when selling your house.

Bankrate insight

When does capital gains tax not apply? If you have lived in a home as your primary residence for two out of the five years preceding the home’s sale, the IRS lets you exempt $250,000 in profit, or $500,000 if married and filing jointly, from capital gains taxes. The two years do not necessarily need to be consecutive. If you become disabled, receive a job offer in a new area or are forced to sell your home before you have lived there two years, you may qualify for an exception to the two-out-of-five rule.

Avoiding capital gains tax on your primary residence

You can sell your primary residence and avoid paying capital gains taxes on the first $250,000 of your profits if your tax-filing status is single, and up to $500,000 if married and filing jointly. The exemption is only available once every two years. But it can, in effect, render the capital gains tax moot.

Let’s say a single filer bought a home for $250,000, lived in it for three years, and then sold it for $400,000. Their profit is $150,000. But that’s exempt from any capital gains tax because it’s under the $250,000 threshold allowed for gains.

Of course, there are conditions. To qualify as your primary residence, the IRS requires that you prove the property was your main home where you lived most of the time. You’ll need to show that you owned the home for at least two years and lived in the property as your primary residence for at least two of the five years immediately preceding the sale.

However, there is wiggle room in how the rules are interpreted. You don’t have to show you lived in the home the entire time you owned it or even consecutively for two years. You could, for example, purchase the house, live in it for 12 months, rent it out for a few years and then move in to establish primary residency for another 12 months. As long as you lived in the property as your primary residence for 24 months within the five years before the home’s sale, you can qualify for the capital gains tax exemption. And if you’re married and filing jointly, only one spouse needs to meet this requirement.

Avoiding capital gains tax on a rental or additional property

If you own an additional property that you plan to sell, you will need to plan to lower your tax liability. There are several ways to mitigate any capital gains tax:

Establish the rental as primary residence

You might find that an investment property you rent out and plan to sell has spiked in value. Moving into the rental for at least two years to convert it into a primary residence to avoid capital gains may be a good idea. However, you won’t be able to exclude the portion you depreciated while renting the property. You’ll lose primary residency status on your main home, too, but that can be regained later by moving back in after the sale of the rental property. If you don’t plan to sell the main home for at least two years, you can re-establish primary residency and qualify for the capital gains exclusion later.

1031 exchange

You can also take advantage of a 1031 exchange. Known as a like-kind exchange, it only works if you sell the investment property and use the proceeds to buy another similar property. If you keep putting the sale proceeds into another investment property, you can put off capital gains tax indefinitely.

Opportunity zones

The 2017 Tax Cuts and Jobs Act created opportunity zones — areas around the country identified as economically disadvantaged. If you choose to invest in a designated low-income community, you’ll get a step up in tax basis (your original cost) after the first five years. And any gains after 10 years will be tax-free.

Deduct expenses

If you still have capital gains after taking advantage of exemptions and exclusions, focus on lowering the amount of the taxable profit or gains. Some qualifying deductions include:

The cost of repairs to a home or investment property
Improvements and upgrades, such as adding a bedroom or renovating a kitchen

Losses in investment property income due to tenants unable to pay rent
Cost of legal, professional and advertising fees to evict a tenant or find a new one

Closing costs from the property sale

Remember to keep organized records and documents, including receipts, bills, invoices and credit card statements, to support your expense claims in case you’re audited.

FAQs

How much is capital gains tax on real estate?


The capital gains tax rate on the sale of a primary residence can be as high as 20 percent of the profit on a home owned for more than a year, and as high as 37 percent on one owned for a year or less. If you own and live in the home for two out of the five years before the sale, you will likely be exempt from any capital gains taxes up to $250,000 in profit, or $500,000 if married and filing jointly.

Is there a way to avoid capital gains tax on the selling of a house?


You will avoid capital gains tax if your profit on the sale is less than $250,000 (for single filers) or $500,000 (if you’re married and filing jointly), provided it has been your primary residence for at least two of the past five years. For investment properties, capital gains taxes can be deferred with a Section 1031 like-kind exchange, in which you use the profit from the sale of one investment property to buy another of equal or greater value.



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Documents Needed to Sell Your Home | Bankrate

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AleksandarNakic/ Getty Images; Illustration by Austin Courregé/Bankrate

Key takeaways

Selling a home comes with a lot of documentation, most of which you’ll gather before listing the property on the market.

One important document is the seller net sheet, which will detail your all-in costs and potential profit.

Keep records of any major home improvements or repairs. This is not only helpful for the buyer, but also for your agent in pricing the home.

Selling a home is a complex process that requires a long list of documents from start to finish. From the initial listing agreement to mandatory disclosures, here are the key pieces of paperwork in the transaction.

Documents needed to sell a house

If you’re thinking of putting your home on the market, it can be helpful to understand the documents involved, some of which you can gather on your own and some of which will be provided by the professionals who facilitate the transaction. Here’s an overview of what you need to obtain, what you might see, and what you might need to sign during the transaction:

Pre-listing documents

Prior to listing your home for sale, track down the paperwork related to your ownership as well as any changes you made to the property while living there. This includes:

Documents related to your purchase of the home: This will include the closing documents and a copy of the deed.

Homeowners insurance policy documents: Keep a copy of your policy handy during the transaction, and be sure to maintain your coverage until the closing has taken place.

HOA documents: If your home is in a homeowners association, gather up any documents related to the HOA, such as CC&Rs or due schedules to disclose to the buyer. The title company involved in the transaction will order a review of these and information like the HOA’s financials, as well.

Major home improvement, maintenance and repair records: Aside from helping the buyer understand upkeep and any improvements to the home, these records can be used to more accurately price the home or dispute a low home appraisal.

Manuals and warranties: This isn’t a requirement to sell your home, but it’s customary for the seller to provide the buyer manuals for the home’s major appliances and systems, plus any warranty documentation if the seller has one.

Pre-listing inspection report: If you want to know what repairs a buyer might ask you to make, you can pay for a pre-listing home inspection. This report can help you prepare for these expenses, or even motivate you to make the repairs yourself before your home hits the market.

Listing agreement: If working with a real estate agent to sell your home, you’re required to sign a listing contract. Here’s more on exclusive right to sell agreements.

Comparative market analysis: “A licensed agent prepares a report of sold, pending and active listings in order to provide the seller with a sense of fair market value for their property,” says Tim Garrity, partner and broker of record at Copper Hill Real Estate in Philadelphia.

Seller net sheet: Sometimes referred to as the seller’s estimated costs, this document breaks down all of the costs associated with selling a home, as well as what the seller stands to profit when all is said and done. “It provides the seller with a sense of what they could potentially walk away with,” says Garrity.

Preliminary title check: Preliminary title searches help both the real estate agent and seller understand what’s owed on the property, as well as whether there are any issues impacting the title that could hold up the sale or reduce the home’s value. “Similar to CarFax for cars, a title search helps buyers and sellers understand more about a property before deciding to buy or sell,” says Garrity.

Seller’s disclosures: This mandatory disclosure form provides information to buyers about any significant issues or defects related to the home. The requirements surrounding such disclosures vary by state.

Mortgage payoff statement: The closing agent will request a mortgage payoff statement from your lender.

Listing documents

Once you list your home and receive offers, you’ll see the buyer’s proposed purchase agreement. This includes information regarding the method of payment (mortgage or cash), closing date and any contingencies, such as a financing or home inspection clause.

During this time, you’ll also receive the home appraisal report. If you had an appraisal done recently prior to listing, provide that documentation to the buyer, as well.

Closing documents

At the closing, you’ll work with the closing attorney or settlement agent to finalize the sale. You’ll see many documents, including an itemized closing statement of the closing costs and financials related to the deal, with any seller concessions you agreed to; the deed; and a proof of sale document.

FAQ

Do I need the original deed to sell my house?


Yes, you’ll need the deed to sell your home. But if you cannot locate this document, it’s possible to obtain a duplicate from your local recorder’s office.

What legal documents do I need to sell my house?


You’ll need a variety of documents in order to sell your home. Some of the most important include your mortgage loan documentation, mandatory disclosures and the deed.

What is a proof of sale document?


A proof of sale document is a record of the property’s transfer in ownership from the seller to the buyer.



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