Should I Stay or Should I Sell? The Critical Choice in Today’s Sarasota Real Estate Market

This week I’m helping a family buy a home on Longboat Key, FL. In today’s Sarasota real estate market they’re going to pay a full 10 percent less than the current homeowner paid just one year ago. This illustrates one of the major challenges for the seller in this environment, and creates a critical choice for most: Whether they should stay or sell?

Typically, sellers usually sell when there is a major life change: adding to their family, a death, a job change. And historically, it has mostly been easy to sell and move on to the next property. However, due to the re-pricing we’ve seen over the last five years, and the tremendous economic volatility for the last two, a lot of homeowners have felt stuck.

Primarily because their homes are worth less than they paid, if the purchase has been during the last 5-7 years. Faced with these hard facts and uncertain market data, many are paralyzed in the face of the decision should they stay or sell?

My Three Ws for Sarasota Real Estate Decision Making

I’m asked all the time by clients what the solution is to this choice. I’ve come up with three questions homeowners need to know the answers to, and feel comfortable with, in order to be ready to become a seller in today’s Sarasota real estate market.

1. Why do they want to sell? Is it one of the life changes I mentioned above, or simply because of a desire for a different lifestyle?
2. Where would they like to go? Are they going to stay in the same community, or move to a new neighborhood or city altogether, with a total change of geography?
3. What are they going to do with proceeds? Is there enough equity in the property that they’re going to be able to take some of that money off the table by downsizing? Or alternatively, will they be moving up the Sarasota real estate ladder?

Or, is there going to be a loss? In which case they’re going to have to make up the shortfall themselves, ask friends and family, or go to the lender to ask them to forgive the difference between what’s owed on the loan and the proceeds from the sale.

With answers to these three questions, homeowners should be equipped to determine whether or not they want to be a seller. Once they get comfortable with the answers, they should be able to decide to sell or stay put according to their own personal situation.

Making the Change and Cutting Losses Today? Or Hanging on For Tomorrow?

The other question people want to know the answer to is whether it’s better to make the change today or wait for some unknown point in the future when the equity will have increased, or the amount of loss will have decreased.

While it appears that some price stabilization may be occurring in 2011, price appreciation appears to be still further off. But in this current market, and after the tough couple of years we’ve had, many people are choosing to just get on with living, as I discussed in my newsletter last month.

For those looking to become a seller, my three Ws should help them analyze whether they’re ready to answer today’s market’s critical question: “should I stay or should I sell?”