Typically, when folks buy a home, they plan to stay put for a while. According to the National Association of Realtors (NAR), home buyers last year expected to stay in their new homes for an average of 12 years. But the twists and turns of life often force some homeowners to make the difficult choice to put their homes on the market before they expected to.
If you’re struggling with the decision to sell your home, you may relate to the stories below of homeowners who are weighing the benefits of selling with their emotional connection to the place they call home.
Large Family Home, but Short on Retirement Savings
Back when Becky and Charlie’s three kids and their friends used their home as a regular weekend hangout, it was tough to find much elbow room in their four-bedroom, two-bath home, much less any peace and quiet. Getting the yard work done was no problem, though, with all those young (if slightly unwilling) hands available to chip in. Now that their kids are grown and raising their own families, peace and quiet is all Becky and Charlie have—except when they’re mowing or raking or any of the hundreds of home maintenance projects that now fall only on them.
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A 2017 NAR profile shows that home buyers over age 52 tend to buy smaller homes—an idea Becky and Charlie found enticing for several reasons. First, a smaller home would mean less work to maintain. Second, retirement is just around the corner for Becky and Charlie, and downsizing would allow them to cut costs now and increase their retirement savings.
According to the Center for Retirement Research (CRR) at Boston College, if Becky and Charlie sell their paid-for $250,000 home and pay cash for a $150,000 home, they could boost their retirement income by $6,250 a year. Part of that increase comes from investing $75,000 (their profit minus the costs to sell and move). The CRR study estimates that Becky and Charlie could then withdraw an additional $3,000 a year from their retirement savings, with annual adjustments for inflation, for the rest of their lifetimes.
In addition, downsizing could free up income they would otherwise spend on taxes, insurance, upkeep and utility bills, totaling $3,250.
Home Is Holding Back a Budding CareerHow many times have you thought to yourself, If I’d known then what I know today, I’d have done things a lot differently? That’s how Sheila is beginning to feel about the home she bought four years ago.
Sheila purchased the 1,600-square-foot bungalow about six months after landing her first job out of college. She had high hopes that she would move quickly up the income ladder in her career, so even though her mortgage payment was high for her starting salary, she didn’t expect it to be a problem for long. But after changing jobs twice and spending several months in between without a job, Sheila wishes she’d been more conservative.
It’s not just the monthly mortgage payment though. The hassle of selling her home has held Sheila back from looking for jobs in other parts of the country.
Selling could be an extremely wise move for Sheila. Not only will it mean more options for her career, but selling her home could also net her a tidy profit. According to the NAR, home sellers last year sold their homes for a median of $43,100 more than they paid for them. They also sold their homes in about a month, so Sheila could get her fresh start sooner than she thinks.
Get All the Facts
While the circumstances in each of these cases are vastly different, they boil down to the same thing: These folks may have loved their homes at one time, but they’ve lost that sense of fulfillment that comes with owning their own home. Plus, there’s the clear potential for a financial benefit if they decide to put their homes on the market.
Your circumstances will be different as well. But you’ll know without a doubt if you no longer enjoy your home. The next question to answer is if there’s any financial payoff for selling your home. With the help of an experienced real estate agent who will prepare a comparative market analysis that will help you determine the market value of your home, you can know for sure whether selling is the right move.
Stop wondering if it’s time to put your home on the market. Consult a real estate agent who will help you weigh the pros and cons so you can have confidence in your choice whether you decide to sell or stay put.