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Home Selling Step 1: Deciding Whether to Sell Your Home (and Whether It Makes Sense)
Most home-selling guides start with pricing, staging, or marketing. That assumes the sale itself is already the right move.
This series starts earlier.
If you’re deciding to sell your home, this first step is designed to help you determine whether selling actually makes financial sense before you move forward.
Deciding to sell your home makes sense only after you understand whether selling actually improves your financial position.
If you already own a home, buying and selling aren’t separate processes. They’re tied together. Selling isn’t just “getting out.” It’s a reset of your finances, your risk, and your future flexibility.
The Three Most Common Reasons People Sell
- You’ve outgrown your home or you’re thinking of downsizing
- You’re relocating
- You’re making an aspirational move
The first two often sound practical. The third usually feels practical. All three deserve a hard look before you ever touch pricing.
Outgrowing vs. Downsizing: Two Sides of the Same Coin
People talk about upsizing and downsizing like they’re opposites. Financially, they’re the same decision viewed from different life stages: you’re trading what you have for a different housing solution, and paying friction to do it.
If You’ve Outgrown the House
- The layout no longer works (privacy, office space, storage)
- Family or work needs changed
- The home can’t be adapted without major compromise
Before you sell, ask: Is the problem the house—or the layout? If a remodel, reconfiguration, or modest addition solves the problem, it may be cheaper than selling and buying again (especially in a higher-rate environment).
If You’re Thinking About Downsizing
- Maintenance feels heavier than it used to
- Space is underused
- Priorities shifted (travel, hobbies, simplified living)
Downsizing only “wins” if the net monthly reality improves. Smaller square footage doesn’t automatically mean lower total cost—especially after you factor in taxes, insurance, HOA dues, and the price-per-square-foot premium of many “downsizing” homes.
Aspirational Moving: When Comparison Drives the Sale
This is the most financially dangerous reason people sell.
A friend upgrades. A coworker moves into the Wylie or Jim Ned ISDs. Someone you know posts the new-keys photo. Suddenly, a perfectly workable house feels like a mistake.
Aspirational moving is lifestyle inflation dressed up as a “housing decision.” It often produces the opposite of what people expect: the house improves, but life gets tighter.
- Vacations disappear
- Hobbies shrink
- Emergency savings thins out
- Stress replaces flexibility
If you aren’t relocating and you’re trying to justify a move as “the next step,” that’s an aspirational sale no matter how you phrase it. That doesn’t automatically make it wrong—but it does mean fundamentals are non-negotiable.
If You Own a Home Already, Credit and Cash Flow Still Come First
This is where selling and buying connect directly to the foundation of the Home Buying Series. If you already own, you don’t get to skip the basics. You’re not “starting over”—you’re stacking decisions on top of your existing financial reality.
1) Credit Reality Check
If your credit isn’t strong, or your utilization is high and climbing, a house change usually makes no sense. You’re voluntarily increasing risk while borrowing at worse terms.
Start here if you need a refresher: Step 1: Know Your Credit
2) Cash Flow Truth
If you don’t budget, it’s time to sit down and push the pencil around. A more expensive home doesn’t just change your mortgage payment—it changes your margin for error.
Start here: Step 2: Build a Sustainable Budget
If your credit and cash flow look good, then yes—talking to your banker in general terms about rates and payment ranges may be a reasonable next step. But if those fundamentals aren’t solid, selling and rebuying is often just a more complicated way to create financial pressure.
Relocation: Automatic Sale or Strategic Pause?
Relocation is often treated as an automatic reason to sell. It shouldn’t be.
- Is the move temporary or permanent?
- Have you ever lived in the area?
- Is it for a raise (after cost of living), or a lateral move?
- Do you need to move the entire household immediately—or can you learn the area first?
In many cases, the smartest play is for the relocating spouse to rent modestly at first—an inexpensive apartment, or even a room—learn the area, confirm the job fit, and preserve the existing home as a safety net. Selling too early turns uncertainty into permanence.
The Part Most Sellers Don’t Want to Hear: Early “Equity” Is Often Not Real
Here’s the stronger, real-world version:
In the first 0–5 years, most homeowners do not have usable equity. When you factor in selling costs, repairs, concessions, and moving expenses, it is common for any early principal paydown—and often much of the appreciation—to be erased. Unless you get substantially more than you paid, selling on a short horizon frequently produces far less cash than people expect.
To make that concrete, here’s a simple amortization reality check. This is not a prediction—just math showing why “I’ve been paying for years so I’ve built a lot of equity” is often false.
Deciding to Sell Your Home Requires a Longer Time Horizon
Sample Amortization Snapshot (30-year fixed, 5.00% interest)
Approximate monthly principal & interest (P&I):
- $100,000 loan: ~$537 / month
- $250,000 loan: ~$1,342 / month
- $350,000 loan: ~$1,879 / month
| Year | Balance (100k) | Principal Paid (100k) | Balance (250k) | Principal Paid (250k) | Balance (350k) | Principal Paid (350k) |
|---|---|---|---|---|---|---|
| 1 | $98,525 | $1,475 | $246,312 | $3,688 | $344,836 | $5,164 |
| 3 | $95,344 | $4,656 | $238,359 | $11,641 | $333,703 | $16,297 |
| 5 | $91,829 | $8,171 | $229,572 | $20,428 | $321,401 | $28,599 |
Two critical takeaways matter here:
- Principal paydown does scale with loan size—but it is still small relative to selling costs. A $350,000 loan does pay down roughly 3.5× the principal of a $100,000 loan over the same period. That doesn’t save you. It simply means you’re carrying a larger number into a transaction where costs also scale up.
- Early principal paydown is not usable equity. The moment you sell, real-world costs arrive all at once: commissions, repairs, concessions, moving expenses, and escrow true-ups. That ~$8,000 of principal paid on a $100,000 loan by year five—and ~$28,000 on a $350,000 loan—can disappear entirely at closing unless you sell for substantially more than you paid.
-
This is why short-horizon selling is so dangerous. The equity you think you’ve built exists on paper, but the transaction converts it into friction—transaction costs. Unless appreciation meaningfully exceeds those costs, the math often nets to far less cash than sellers expect.
In the next step, we’ll look at what that equity actually turns into after real-world transaction costs are applied.
And “substantially more” is not a guarantee on a five-year horizon. Housing markets do not move in one direction forever. The 2000s housing bubble peaked in the mid-2000s and then declined for years.
In plain terms: the first several years of homeownership are about paying interest and buying optionality, not building spendable wealth. Selling during that window frequently resets your finances rather than advancing them.
That is why this step exists: to prevent a knee-jerk sell-and-rebuy cycle that erases equity and replaces flexibility with obligation.
What This Step Is Designed to Prevent
- Pricing emotionally instead of strategically
- Moving because of comparison rather than math
- Resetting your finances on a short horizon and being surprised by the net result
If you are still deciding to sell your home, the next step is understanding what you would actually walk away with after costs.
What Comes Next
If—after examining the “why,” your credit, your cash flow, and your time horizon—selling still makes sense, we move forward.
In Home Selling Step 2, we’ll calculate your true net proceeds: not online estimates, not neighbor stories, but what you actually walk away with—and what it buys you next.
About Me — Doug Berry, MBA, REALTOR®
The Bow Tie Agent
I’m a REALTOR® with Better Homes & Gardens Senter, REALTORS® who focuses on helping buyers understand the real-world side of homeownership — from lending and budgeting to navigating underwriting without surprises. With an MBA and experience as a lender with USDA Rural Development’s mortgage programs, I approach the process the same way I do with clients: clearly, calmly, and without sales pressure.
If you have questions, need help figuring out where you are in the process, or want a second set of eyes before making a move, feel free to reach out:
📧 Doug@senterrealtors.com
📞 325-338-9734
🌐 www.dougberry.realtor
