Selling a house has the potential to generate the single largest amount of cash you may ever see at one time in your entire life. With that kind of money up for grabs, most people are extremely interested in doing everything they can to maximize their profits. This naturally leads to the question: “When is the best time to sell a house?”
Peak Sales Season
From a calendar perspective, most experts recommend putting your house up for sale in spring. The experts at real-estate website Zillow state that a spring listing can result in a quicker sale and a higher price. The people at Realestate.com agree and note that those long sunny days bring out the buyers.
The Washington Post refines the timing even further, agreeing that listing your house in the April-to-June period results in faster sale at a higher price. It also notes that home sales tend to peak in May and June, reflecting sales of homes that were actually placed on the market in the middle of winter.
Time magazine recommends that sellers put their homes on the market on a Thursday. The logic being that a Thursday listing makes the home available for weekend shoppers. Others argue for a specific calendar date. The Huffington Post, for example, analyzed sales data in Canada to make a case that May 1 is the ideal day to sell.
Factoring in the Economy
Calendar dates are not the only factor that home sellers can consider. For those who have the luxury of time and want to study sales patterns, there are some additional data to be considered, including rent prices, housing supplies and interest rates. When rent prices are climbing, homeownership becomes more attractive because a monthly mortgage payment may cost less than rent. Housing supply is another consideration, as a tight inventory situation can enable sellers to hold out for higher prices. Of course, low interest rates may be the most important of these factors.
Interest rates have a direct effect on a buyer’s monthly mortgage payment. Lower rates result in lower payments. So, lower interest rates enable buyers to spend more money on their home purchases. Consider, for example, that Investopedia’s Monthly Mortgage Payments calculator shows that a 30-year mortgage (360 months) on a $100,000 loan results in a payment of $477.42 if interest rates are 4%. If interest rates rise to 6%, that same loan will require a payment of $599.55. So, in an ideal scenario, sellers seeking to generate the highest possible profit and the quickest sale will put their homes on the market in the spring during a period in which rents are on the rise, the supply of available homes is low and interest rates are down.
Other Aspects of Timing
While the amount of money you can make on the sale is clearly important, you may have reasons for overriding the "best" timing when deciding when to put your home on the market. Even if you probably won't make the largest possible profit on the sale of your home, that doesn’t mean you shouldn't sell it if you have other reasons to do so.
Lifestyle benefits. Selling so you can move to a smaller single-family property, an apartment, or a condominium can significantly reduce the amount of time you spend on home and lawn maintenance. All of your new-found free time can be spent doing other things, such as playing golf, spending time with your family and friends or engaging in other activities that you enjoy. On the other hand, your family might be growing and need more room – or perhaps you can now afford the large garden, media room or pool you've always wanted. You may not want to wait for the next peak selling season to make your move.
Physical issues. You may want to sell now because it's time to eliminate the physical demands of owning your current home, including climbing stairs and performing maintenance tasks on a large home or yard. These issues can be become critical as you get older and once-routine tasks become more difficult and tiring.
Personal necessity. If you must move to a new city to be closer to family to help care for a sick relative or a new baby, the timing of the sale may not be driven by economic considerations at all. Similarly, if you have kids in school or you are starting a new job on specific date, you may need to bypass the spring selling season and wait until the kids are out of school to put your home up for sale – or list it immediately in the dead of winter so that you can start your new job on time.
Or perhaps it's just time to downsize and significantly reduce your yearly expenses. Changing to a smaller home or a less pricey neighborhood can shrink property taxes, utility bills and ongoing maintenance costs. And if, for example, your children are grown up, you may not need to live in a district with the highest school taxes. For a more detailed look at the potential savings, see Downsize Your Home To Downsize Expenses and Downsizing A Home: Knowing Whether It's Worth It. If the concept appeals to you, read Avoid The Downside