The Top Reasons to Sell in 2011

Usually it is either a good time to buy or a good time to sell, but not both. If prices are moving up, that is the time to buy. If prices have peaked and will be moving down, that is the time to sell. But this market is one of the few times it will be a good time to do both. I have already covered "The Top 10 Reasons to Buy in 2011", so here is my list for sellers:

1) Plenty of excited buyers
As my previous blog noted, buyers are in the market and looking to buy. Almost 1/2 of the buyers in the marketplace are first time buyers, (the first time of anything is generally exciting, but sometimes awkward). Buyers feel prices are way off the peak, rates are low (see #2), and there are a lot of homes to choose from. If your home is priced right, shows well, and is marketed properly, you will have buyers interested in purchasing it.

2) Rates are at all time lows.
What does that matter to a seller? Well, low rates mean lower payments, and allow a buyer to pay more money for your home. More importantly, what comes down inevitably goes back up, and when that happens, prices may move in the opposite direction. A few years ago 7% didn't look that bad, but after buyers have acclimated to 4%, an interest rate of 6% will look downright outrageous.

3) It won't get much better in 2012.
Sorry, but there simply won't be a quick bounce back in the market. Since all loans are underwritten (indirectly) and purchased (directly) by the government, there won't be a stampede of unqualified buyers in the marketplace like 2001. Rates may rise, government cuts are on the horizon (as of this writing, the federal government had a 1 trillion deficit and California had a 25 billion shortage) and it may be years to go through the mortgage defaults. Few analysts feel the housing market in 2012 will be materially better than 2011, and we are always one catastrophe (e.g., major earthquake) from a hiccup in the market.

4) Banks are encouraging short sales
18 months ago I advised any and all buyers to avoid pursuing short sales because they were anything but short. Less than 25% of short sales actually came to terms and closed escrow, even after months of negotiating torture. Banks have finally staffed up, trained that staff, and have the systems in place to process, approve and close short sales. If you are a seller who owes more on your home than it it worth, there is real hope for a solution via a short sale.

5) It may be time to move UP.
Your home may be worth now than when you bought it, or it is certainly worth less than it was in the Summer of 2006. So what? So is the home you may want to purchase. You can add on to your home, but the cost to do that hasn't move to much lower than at the peak. You may over-improve your property, or if you do add on, it just won't "flow" properly. This may be the time to sell your home at a market price and buy your dream home at a severe discount. People dump stock all the time to buy one that will perform better. If your family has grown, or your needs have changed, and you can qualify for the financing, this may be the time to lock in your home of the future.

Stay tuned for reasons 6-10.