The Four Worst Reasons to Sell Your Home
Considering how much work goes into buying a home, it’s surprising how many people view it as a temporary situation. The concept of the “real estate ladder”—buying a small, affordable “starter” home only to build up equity and trade it down for a larger home, then doing it again until you’re living in a mansion of some kind—leads people to think of their homes as investments in their future rather than a place to live their lives.
It’s true that buying a home can be a difficult decision , and buyer’s remorse is a real situation that almost anyone can face, and sometimes selling your home is the best decision you can make. But there are many bad reasons to sell, especially if you feel comfortable and happy in the property or have put a lot of work and money into making it yours. If you’re itching to call the realtors and list your home for sale, ask yourself if you’re doing it for one of these reasons, and then maybe don’t call.
You’re exhausted
You’ve bought a house and learned the dark secret of home ownership: you have to maintain it. Maintaining a home can be a lot of work—in fact, about 28% of people who report buyer’s remorse for their home cite the time and cost of home maintenance as the main reason.
Anyone who owns a home knows that the problems seem never-ending. Fix the roof and the water heater will work. You replace your water heater and your air conditioner dies. Selling your home can feel like a weight has been lifted off your shoulders. However, it’s important to keep in mind that any property you buy after you sell that home will also require maintenance—you’ll either do the maintenance yourself or pay someone to do it through your HOA or condo fees. Selling your current home will not eliminate the need for maintenance and repairs. Even moving from an old home to a new one doesn’t guarantee that you won’t have to do a lot of maintenance work: according to a survey by insurance company Hippo , 60% of new-build homeowners spent more on maintenance than they expected.
If you’re happy with your current home except for the maintenance work, space allocation and planning can help make it more manageable. And paying for a home warranty service (or simply hiring a professional ) can at least give you a break from the constant hassle.
Market timing
When you buy a home, you expect its value to increase over time, while you increase the equity you have in it. This is usually a long-term situation, but sometimes the real estate market in your area heats up quickly and you hatch a plan: sell at a high price, rent out for a year, and then buy the house again when the market drops. This is called “timing the market,” and it’s usually a bad reason to sell a home you otherwise like.
“I worked with a couple who bought a very nice home in a quiet area just outside of town,” says real estate expert and owner of Fast Home Buyer California Y.K. Kuliev. “They spent years waiting for exactly what they wanted – a custom kitchen, a landscaped yard and all that. They saw headline after headline about record sales prices and thought to themselves, ‘Let’s cash out now while prices are at their peak.’ They did that and made really good money, but they didn’t have a new home ready. They decided they’d rent it out for a year, wait for the market to cool, and then buy again later. 18 months and they will be kicked out of the very neighborhoods they used to call home.
Not only does timing the market jeopardize the home you feel comfortable living in, but the gains are often illusory because you end up paying rent—and often more and for a longer period than expected. “They think they’re going to cash out at the perfect time,” said Jessica Robinson, co-owner of Family Nest North Central Florida . “But forget that they will still have to live somewhere after the sale.”
the one that got away
One of the most frustrating aspects of buying a home is the competition: other buyers swooping in with all-cash offers or offering prices well above the list price. Bidding wars can quickly put your dream home out of financial reach. And sometimes you see a home you’d like to buy, but it’s not on the market when you’re ready to invest in it.
But if the dream home you’ve been denied suddenly becomes available, selling your current home to jump into it could be a huge mistake for a number of reasons:
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Sweat of justice. If you’ve invested time, effort and money into renovating your current home, you may not be getting a return on that investment.
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Financial losses. Unless you’ve lived in your current home for at least two years, be prepared to pay steep capital gains taxes. Your mortgage lender may receive a penalty for paying off your loan too early. And you’ll pay all the fees and closing costs, negating any small gain you might have made on the home’s equity.
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Disappointment. Dream homes don’t always work out the way you expect. A home that appears perfect at first glance may have hidden problems, or you may not use the amenities as often as you think, or at all.
If the only reason you want to sell your home is a form of FOMO, it will probably be a mistake.
Are you bored
Buying and moving into a new home is an exciting experience. There’s the excitement of finding the right home, the joy of starting a new chapter in your life, and then the buzz of activity as you decorate , renovate, and get to know your neighborhood.
But eventually you calm down, complete projects and settle into a routine. For some people, this leads to feelings of boredom in the home and a regrettable decision to sell just because the excitement has died down.
Robinson saw it with his own eyes. “I’ll never forget a couple I worked with who sold their home because they were “just incredibly bored” in their home,” she says. “It was a beautiful house, a great neighborhood, but after a few years they just didn’t feel right.”
This was a predictably terrible idea. “They rushed to list without a clear plan and ended up with a smaller, more expensive home that needed a lot of renovation,” she explains. “After six months they admitted that they missed the old place and regretted it all.”
Kuliev also recalls one client who simply wanted a “change of scenery.” “She thought moving to a more fashionable area would be ‘fun,’” he recalls. “She put her condo on the market, sold it quickly, and bought a loft in a new apartment complex. Six months later, her commute was longer, the community was more impersonal, and her HOA fees were much higher. She admitted that she missed the comfort and character of her old home. That boredom cost tens of thousands in closing costs, fees, and an emotional toll no one expected.”