Related topics
As Forrest Gump would've said if he'd been a real estate agent, 'House selling is like a box of chocolates . . . you never know what you're gonna get.' You never know how much your house is really worth until you reach an agreement with a prospective buyer. And even after you decide to accept an offer, you never know what surprise costs may crop up before your deal actually closes.
We don't mean to introduce uncertainty here. Although it's an inexact science, there's no reason you can't reasonably estimate your expected proceeds of sale. This chapter can show you how.
If money isn't a constraint for you and you can comfortably make the move that you're proposing, feel free to skip this chapter. Spend the free time reflecting on how fortunate you are!
You may need to get a certain amount of money from the sale of your house, or at least know before you can close on a deal how much you'll receive. Take the time to understand the particular probable proceeds of sale under the following scenarios:
- You're strapped for cash because you want to buy a more expensive home. You need to know before you sell if you'll have enough money to complete your next purchase. If you don't know this amount, the worst-case scenario is that the sale of your current house doesn't leave you enough money to buy your next one. Although you probably won't end up homeless, you may end up renting for a while and having to make an extra move, or having to scrounge around at the last minute for money.
- You're trading down because you need more money for retirement. Perhaps you want to receive a certain amount of money from your house sale to afford a particular retirement standard of living. If you're not realistic about how much cash you'll net from the sale, you may end up wasting a great deal of time and money on a house sale that yields less cash than you need or expect.
- You're relocating, in part, because of finances. If you have a choice about taking a job in some other part of the country, you may be tempted to relocate if you think that you'll be more comfortable financially. However, if you're simply assuming or guessing that you'll be better off in the new area, you may be wrong. You need to gather and review some facts before you move.
Note: Throughout this discussion of estimating house sale proceeds, we assume that you don't have an employer who's willing to pay for some of your house selling and moving costs. If you're relocating because of a new job, by all means negotiate to have your new employer pay for some or even all the expenses related to your house sale. You'll have that much more money to plow into your next home.
