While emotional ties and the children’s stability are important factors, financial considerations let you know the most practical perspective on selling or keeping a home.
When deciding, weigh the following factors:
- Affordability. Determine whether you can afford mortgage payments, property taxes, insurance, utility bills, yard upkeep, and major maintenance (new roof).
- Sales price and costs. Find out the house’s market value, projected time to sell in today’s market, and real estate broker fees.
- Financing the home. Find out whether you can take over financing or would have to refinance the home, and if so at what mortgage rate.
- Equity in the home. Find out what your equity is in the home.
- Relocation costs. Determine moving costs, along with down payment if downsizing to a smaller home or renting.
- Children’s education. Consider whether your children should attend the same school or whether moving would offer a better school opportunity.
- Tax consequences. Determine the tax consequences of selling the home vs. keeping the home—advantages and disadvantages of each.
When considering property taxes, gain a better understanding of how property taxes work under Proposition 13. Two households living next door in similar houses may pay radically different tax amounts.
Today, with underwater housing, couples who sell their homes may actually owe a deficiency to the mortgage company. Underwater means the market value of the home is less than the mortgaged value, so inadequate sale proceeds would leave you with a debt to the mortgage company. Keeping the home may be more practical. Some couples wait until the children grow up and then sell the home and split the proceeds. In today’s market, couples may decide to wait until the housing market recovers before selling the home.