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February 12, 2007

When is the Right Time to List My Home?

I am building a house, which is scheduled to be completed June 1. When is the right time to list my existing house? I would like to make the transition from my old house to my new one as smooth and painless as possible.

 
    What you’re asking for isn’t unreasonable but it may not be very practical. You’re trying to paint a “perfect world” picture that means you’ll either get to control the outcome of both deals or be incredibly lucky. For one thing, the completion date of the home you’re building will be determined by your builder (and may be delayed by weather, sub-contractor availability, material deliveries, and other factors beyond his and your control); meanwhile, the closing and possession dates of the home you’re selling will be initially driven by your buyer’s timetable, market conditions and competition, which are all factors that will influence your home’s sale but that you cannot control.

    In my opinion, the first thing you need to work through is your “worst case” scenario, which may be that a buyer will want to close and take possession of the home you are selling before your new home is completed. Are you willing to put your possessions in storage and go into temporary housing? If you are, list your home now to take advantage of our market’s traditionally strong spring selling market. If you’re not, find out if your lender will let you close on the home you’re building and move in before you’re free and clear of the mortgage on the home you’re selling. Of course, the downside of that strategy is you could find yourself owning two homes simultaneously and be strapped with two mortgage payments.

    Consider the sale of your current home as a doorway you have to walk through in order to get to the next phase of your life. It’s kind of like having a temporary ailment that’s curable, but generally not without a little pain and a lot of anxiety. My advice is to focus on controlling what you can, which is not the completion and occupancy dates of the home you’re building, but rather the marketing and sale of the home you’re selling. If the timing isn’t perfect, be prepared to trade the short-term inconvenience of temporary housing for the long-term gain of knowing it all worked out in the end. Every seller wants to believe their home will sell quickly but in 2006, the average home that sold – and, remember, not every home that’s listed sells -- was on the market about 10 weeks. That means that if your home sells in the average time and you want it to close by June 1, you really need to have it on the market by the beginning of March. As Spring and Summer are traditionally the best times to sell a home, if you wait too long to list yours, you could miss out on a crucial part of the prime selling season.

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