Barbara Corcoran: 1 Question To Ask Yourself Before Selling Your Home
Written by
Crystal Mayer
Edited by
Zuri Anderson
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Shark Tank star and investor Barbara Corcoran is famed for giving solid real estate advice to people across the nation.
Not only does the multimillionaire own multiple properties, she also sold her own real estate company, The Corcoran Group, for a reported $66 million in 2001.
With the potential of lower mortgage rates before the end of the year, many homeowners are wondering whether now is the right time to enter the market.
Corcoran told Entrepreneur you need to ask yourself this question before selling your home.
“Do I See Myself Here for the Rest of My Life?”
One of the biggest obstacles to today’s housing market is low supply. Many homeowners have incredibly low interest rates.
“Sixty percent of the sellers who own homes in America have rates under 3%,” Corcoran told Entrepreneur.
With current rates sitting at around 6.5% at the time of reporting, few homeowners are willing to make the move only to pay significantly more for a home.
However, waiting for lower rates may end up costing you more. A drop in rates, as is anticipated over the course of the next year, may drive more buyers to the market, driving up prices.
Therefore, Corcoran suggested homeowners holding on to their homes ask themselves whether they see themselves living there for the rest of their lives. If not, then it might be the motivating factor to help you decide whether to put the house on the market.
Why Sell Your Home If You Have To Buy at a Higher Rate?
Corcoran noted that rates are likely to drop over the coming year — even going into the “5% range.” But for homeowners who bought during record-low rates, they are likely sitting at 3%, or even less in some cases.
So why consider selling your home if you would have to buy at a higher rate?
Undoubtedly, purchasing a property at a higher rate is not ideal. A mortgage calculator can help you determine you’ll pay an additional $100,000 on a home that costs $300,000, if your rate on a 30-year fixed loan increases from 3% to 5%, and you put $60,000 down.
However, if you plan on downsizing, buying a home at a higher interest rate may not be as detrimental, mainly if you can purchase it before prices increase. As indicated above, a rate decrease could bring more buyers to the market, potentially raising home prices.
How To Decide Whether To Sell Your Home
Ultimately, the decision to sell your home is personal and may depend on a number of factors.
Foremost, you should consider whether you see yourself living in your current home for the rest of your life. If not, you will want to weigh the pros and cons of purchasing property at a higher rate if you were lucky enough to buy or refinance during a period of historic lows. The good news is that if rates do drop significantly, you can still refinance at a later date.
Next, you will want to think about whether you are hoping to downsize. If you are planning on buying a more expensive home, then you need to understand that the higher rate could add a substantial amount to your monthly mortgage payment and the total interest you end up paying.
Waiting to sell until the right time may end up costing you more than you think. The right time for you may also be the right time for a flood of buyers, meaning the purchase price of your new home may jump up. Worse yet, the increase in demand could cause bidding wars, making it nearly impossible for buyers to snag the home they want at an affordable price.
More From GOBankingRates
